Pure-play open-source software providers are being squeezed out of the enterprise market by increasingly complete offerings from application and OS providers, according to a report from The 451 Group's just-launched “Commercial Adoption of Open Source” (CAOS) service. The report's findings may be applicable to embedded Linux stack providers, as well.

According to report's findings, enterprise application providers are increasingly bundling relatively complete operating systems with their products, while enterprise open-source OS vendors are including increasingly rich open-source application environments. And, customers say they are willing to look to both application and OS providers separately for support, rather than paying extra for the “single throat to choke” offered by a stack provider.

Raven Zachary, practice head for open source at The 451 Group, stated, “A minority of organizations [surveyed] expressed a significant level of interest in a single vendor for support.”

In the embedded market, meanwhile, semiconductor vendors, such as PMC-Sierra, are increasingly bundling Linux kernels and drivers, while application stack vendors, such as Devicescape, increasingly supply complete Linux implementations with their wares. Additionally, many board vendors, such as WinSystems, now supply BSPs or even complete Linux cross-development kits with their products.

All of the above factors arguably put pressure on pure-play Linux distributors such as MontaVista. Interestingly, embedded Linux distribution vendor TimeSys actually left the distribution business a year ago, in favor of a development services business model executed in close cooperation with semiconductor vendors. New MontaVista CEO Thomas Kelly also told LinuxDevices recently that he would consider new business models.

Zachary states, “With existing players continuing to refine their offerings, and new players entering the market, stack providers must change their business models in order to thrive in the long term. The most productive approach may be to refocus their businesses to serve other types of customers. Those that want to continue serving end users as a primary market will have to either focus on the support opportunity in a particular vertical niche or become general systems integrators, possibly via merger or acquisition.”

The 451 Group lists the following trends shaping the “entire” open-source stack provider market:

• Increased vendor competition — The number of vendors that are competing in the open-source stack provider market is growing.
• Federated support models — There are so many open-source projects that no single vendor can assemble the expertise to meet every customer need. Many open-source stack providers can only afford to support the most popular open-source components. Because of this, vendors partner to build a network of experts to meet their customers' needs.
• Supplier commodification — Where popular open-source components aren't backed by a single vendor, multiple vendors offer the same services and risk becoming commodified. Because of this, customers have regular opportunities to reevaluate the relationships with their suppliers and seek alternative suppliers.
• Talent acquisition — Vendors wanting to provide open-source services and enterprise users who are implementing open-source software are increasingly seeing value in acquiring expertise through the hiring of core developers.
• Customer ownership — The more comfortable an organization is with open source, the greater level of ownership it will take in the support process.

The findings are from The 451 Group's 75-page report, “Stack and Deliver: An analysis of open source stack providers, with recommendations for vendors and their customers.” A partial list of companies covered includes BitRock, Covalent, Hewlett-Packard, IBM, MySQL, Novell, OpenLogic, Optaros, Red Hat and JBoss, rPath, Simula Labs, SourceLabs, SpikeSource, Sun Microsystems, Unisys, Virtuas and Zend.

An associated “451 CAOS Theory” blog is also available, here.

 
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