Open source software has had a hit-and-miss relationship with channel partners. Major initiatives from Tech Data and Synnex, for instance, have done little to ignite reseller enthusiasm for open source email, ERP, CRM and other applications. So, how will open source march forward with resellers? The VAR Guy has some new insights to share.
First, let’s explore what went wrong. Synnex and Red Hat launched the Open Source Channel Alliance amid much fanfare in 2009. But the alliance was surprisingly silent in 2010, and completely silent so far in 2011. Similarly, Tech Data launched the Open Tech initiative in late 2009. That effort also has gone mostly silent.
Among the challenges facing open source in the IT channel:
- The market for open source business applications is too fragmented, with multiple small players competing in email, CRM, ERP and so on.
- Small open source companies lacked the time, financial resources and focus to build channel pipelines with distributors.
- The cloud came along, shifting a lot of attention from on-premise open source to cloud-based everything.
Signs of Hope
Still, open source has enjoyed anecdotal success in the channel.
- Red Hat, on track to become a $1 billion company this year, generates roughly 50 to 60 percent of its annual revenues through channel partners.
- Attachmate CEO Jeff Hawn assures The VAR Guy that Novell’s SUSE Linux business will remain channel-centric.
- Digium‘s success with Asterisk partners is well-documented.
- Open-Xchange, the open source email firm, has successfully partnered up with SaaS providers.
- SugarCRM partners are profiting in the cloud, according to CEO Larry Augustin.
- Jaspersoft has attracted new funding from Red Hat, SAP and Quest Software.
- And Pentaho now hosts annual partner summits.
So what’s next? How about open source companies plugging into distributors’ cloud strategies. That’s a real possibility, The VAR Guy believes. Earlier this week, Tech Data VP Stacy Nethercoat told The VAR Guy that open source companies will certainly have an opportunity to leverage TDCloud StreamOne Solutions Store — a fancy term for a cloud app store.
In theory, open source companies could have an easier time plugging into the new distributor cloud model rather than the old shrink-wrap model.
The VAR Guy will be watching to see if open source finally catches fire in the channel.
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VAR guy,
Your “Open Source” articles seem to indicate that open source never quite delivers on it’s promise, and continues to struggle to maintain posture in the IT world. It all sounds just so —dismal—. But maybe this is just the way you are looking at it…
The title of your article should not be “Open Source Earns…”. It should be:
Some Businesses that market themselves as “Open Source” Earn…
But look beyond these players trying to market the open-source persona and consider some other examples of business using, contributing, and re-selling, open source technology…
IBM delivers supercomputers that are based on Linux open-source software. Where is the credit, including their achievement with Watson running an open-source stack? I wonder what kind of revenue stream IBM gains from re-selling open-source technology in these expensive systems.
Look also at what IBM does with Eclipse in their extensive business software and service packaging with the UCM Clear Case and related products, Rational Software Modeling, etc. These are high end big-revenue software tools used by mainstream businesses throughout the world–built on open source frameworks.
Now move over to Google and see what they are doing with open-source and Android. Again these systems are built using an open-source foundation (linux, Davlik, and others). What kind of revenue streams are we talking about when we consider the Android hand set market with 135 million units, $6 per unit, and growing faster by the week?
Consider VMware, which has an entire product line based on open-source technology. How much success are they having these days with the big moves to the cloud and to virtualization in IT? They are re-selling open source technology and are very successful at it.
These are examples of products that are sold that contain significant open-source technology, yet you seem to focus only on the companies that market their solutions as open-source. Open source can be used, as it is, in many cases without ever mentioning that the end product relies on it. Consider the many kinds of embedded special purpose appliances, network switches, firewalls, NAS, Routers, network printers, etc. Aren’t these all examples of open-source value-added re-sale?
Besides that, in many case, the companies you mention market products as open-source, but then restrict you to their service plan or other side arrangements that provide anything but freedom to the consumer.
So please try not be so selective in what you report as “Open Source” success stories. Then also, try to keep a clear distinction between open source technology itself and the businesses that choose to market, use, and/or resell it. Open source itself does not succeed or fail–businesses succeed or fail.
Zman58: Thanks for taking the time to share your opinions. The VAR Guy values your time and readership.
Yes, you’re absolutely right: IBM and other vendors have been incredibly successful with open source. As have thousands of customers.
But The VAR Guy focuses mainly on channel partners — VARs, integrators, solutions providers, managed services providers. Those folks promote open source in selected ways. But many of the commercial open source companies have struggled to build their channel partner programs.
The VAR Guy will keep your final line in place: “Open source itself does not succeed or fail — businesses succeed or fail.” Absolutely correct. Thanks for sharing.
-TVG