Archive for December 2008
Open Source BI uptake in UK Healthcare
The recent decision by National Health Service in Islington to use Pentaho for BI is getting lots of attention:
As Glynn Moody often points out the UK is a laggard in Europe in terms of open source adoption. Cases like this hopefully mark the turn of the tide.
Open source can keep a technology alive, less so a company
Cyan Worlds has decided to release the source code for Myst Online (Uru Live) to open source.
Dana Blankenhorn at ZDNet in his ‘Can open source save gaming companies?‘ post seems to think that Cyan is trying to save the company from dying. I read it differently, I think they are trying to save the software from dying.
Here is a quote from Cyan:
But we’ve poured so much into UruLive, and it has touched so many, that we could not just let it whither and die. We still have hopes that someday we will be able to provide new content for UruLive and/or work on the next UruLive.
They seem to be viewing open source as a way to keep Myst alive. This is probably from both personal reasons and also with the hope that at some point Cyan might be able to monetize it again.
I think Matthew Aslett at 451 Group reads it the way I do and points out that open source is not a panacea
Follow Up to ‘Open Source Business Intelligence In an Economic Down-Turn’
Michael Schiff over at Enterprise Systems Journal seems to agree with my last post
http://www.esj.com/business_intelligence/article.aspx?EditorialsID=9261
Prediction #3: Open Source Growth will Accelerate
Economic pressure will accelerate the growth of open source technology as well, especially as open source has now established itself in production deployments. Because many vendors are utilizing source technology in their applications in order to reduce costs or, as in the case of several data warehouse appliance vendors, partnering with open source business intelligence and data integration vendors to offer a more complete solution, the growth will be seen in both standalone and embedded environments.
Open Source Business Intelligence In an Economic Down-Turn
Could the current economic climate affect the balance of power between the entrenched proprietary vendors and the new open source competitors? It seems logical…
Business Intelligence is interesting in that it provides different value both boom-times and down-turns. In boom-times companies are looking to maximize sales and growth by analyzing the results of marketing campaigns, weblogs, and demographics etc. In economic down-turns companies are looking to analyze things such as costs, margins, and profitability of channels in order to maintain profitability while sales decline.
BI therefore has differing values during various economic scenarios. The BI tools and technologies remain the same in all these scenarios, but there are differences. During booms the budgets can be considerable-to-extrordinary. During down-turns the budgets become severly constrained.
In previous economic cycles budgets have not been major differentiating factor amongst the BI vendors because the vendors have had, generally, similar pricing and business models. That is to say the entrenched BI vendors have presented the same pricing in all economic scenarios despite the economic differences. However these old-school (or `historically-comfortable` if you want a politically correct term) business models are as prone, if not more so, to economic down-turns as the markets that they serve. This is because it costs more to sell BI tools than it does to produce the technology. You can look at the quarterly reports of Cognos and Business Objects just before they were consumed and see that income from new licences was 35-40% of all income, that sales and marketing expenses was 35-40% of expenditure, whereas investment in product development was 15-25% of expenditure. These figures show that almost all the money a customer spends on BI products is spent by the vendor on marketing to, and selling to, the next round of customers.
What is different about today’s economic situation is that for many segments of the software market (for BI and also for CRM, ERP etc.) this is the first economic down-turn where substantial and viable open source and commercial open source offerings have been available.
Will the current economic climate provide a boost to these new offerings? We only have to wait…
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