The 451 Group has found that while many vendors consider small and medium-sized businesses (SMBs) to be a 'hot market' for adopting open source software, the SMB market opportunity for open source software vendors is actually limited.

SMB customers are highly cost-conscious and generally lack the IT resources to effectively manage anything beyond the simplest open source software. Easy-to-use open source software can be difficult for software vendors to make money from, but more complex or component-based open source software is unpalatable to the majority of the SMB market, unlike the historical and continuing success of open source software in the enterprise market.

The findings are discussed in a new report by The 451 Group, a New York-based technology-industry analyst company focused on the business of enterprise IT innovation. The report is part of the 451 Commercial Adoption of Open Source (CAOS) Research Service, which investigates both user experiences and vendor strategies as enterprise customers begin to deploy open source software.

The 451 Group sees Microsoft's dominance in the SMB market as a significant barrier for many open source software vendors attempting to infiltrate this market, and that is unlikely to change anytime soon. The prevalence of Windows and Office, and the sheer number of IT experts with MCSE certification, mean that most SMBs will continue to use the technology they know, even if that means adjusting internal business processes to meet the technology available. Open source software that integrates with and supports Windows and other Microsoft products will have an advantage among SMBs.

"While Microsoft's market hold will be hard to chip away at in North America, many other markets in Asia, Europe, India, South America and elsewhere should experience rapid growth of Linux and open source software fueled by local government and commercial directives and preferences," said Jay Lyman, Analyst with The 451 Group and lead author of the report.