Advertisment

Open source monetization — still a far cry?

author-image
CIOL Bureau
New Update

BANGALORE, INDIA: At a time when business houses reel under the pressure of shrinking money supply, the best way to make money is to sell to them a dream of doing business with the existing cash reserve. And to help them realize that dream.

Advertisment

Global IT consultancy ThoughtWorks, Inc., with a focus on agile software development, is one of the apostles who have been promoting lean methods of product development.

Dr. Rebecca Parsons, CTO ThoughtWorks, Inc, in an exclusive interaction with Saheer Karimbayil of CIOL, talks about the new trends in the industry, their possible impacts on the current ways of doing business and the scope of open source monetization.

Being an industry veteran, are you noticing some new trends that are going to have a great role in shaping up the future of the industry?

Advertisment

About 9 months ago, when I was wandering through an airport, I noticed two people arguing over what the recipe for a particular drink was. Quickly, one of them pulled out his Apple iPhone and Googled the recipe.

The new mobile devices are going to change the way people interact with computers and the way they think about using a device. Each product comes out with added innovative solutions. Apple's iPhone and iPad are the best examples. When you look at the data usage of iPhone users, compared to other smart phone users, the difference is astounding.

Talking about Apple, I remember it shipping Mac OS bundled with Ruby on Rails platform sometime back. Being an open source platform, how is Ruby going to find a business model today?

Advertisment

Finding a business model for open source is a tough thing. It’s analogous to the problem that online media industries are facing. How do you find a business model when everybody wants free content? It’s easier in the open source space, because people who use open source software still need things like support, training, installation services.

Open source companies can shape the future of the industry, just like those IT companies who have all kinds of products and at the same time strong services divisions. Open source firms could go to their customers and advise on how to use their products properly, apart from providing installation and support. All of that come in addition to what the client pays for the license.

About monetizing such software...?

Advertisment

If you have a software asset, that has value. For example, right now, we sell a license to people to use our software asset, and then we have all the services that wrap around it — like the support contracts, the installation services, the training etc.

So the question is what is the motivation for somebody to actually create that software asset.

As far as open source is concerned, people do not necessarily need a huge pile of money to create a software asset. Linus Torvalds never charged anything for Linux. He wrote it because he felt that to be an important thing to do. I think most of the people who do open source have a day job or have a company. They’re selling all of their services around open source. So something like open source can continue to just run without actually monetizing the software asset directly.

Advertisment

After all, software developers like to develop software and they like to solve problems.

As its adoption rate in India is very low, how long will it take for the country to reach a stage where there will be lots of service spaces around open source software?

As soon as you have people in India who are adopting open source at scale, you are going to have a critical mass of consumers who want to consume the services to support open source. And then such organizations will start to spring up in India. You certainly have sufficient talent, creativity, and a strong legacy of entrepreneurship.

Advertisment

Part of the issue that you are facing today is, with a major part of the Indian software industry still outsourcing-based, you do not have all the decision makers here yet. When the decision makers are sitting in the home country, that can tip the balance of decision making in favor of whichever technology you prefer. However, if a parent company insists that its captive should not use open source on its projects, that would lessen the demand for open source.

Being a global player, how do you see the country-wise adoption of open source?

We have presence in the US, Canada, China, Australia, India, the UK, Germany, Brazil, and an office in Sweden. However, open source adoption has more to do with the demographics of the customer than the country. Many of the larger organizations feel uncomfortable with open source unless they can buy a support contract. They want to know if there is somebody whom they can approach in case something goes wrong. Start-ups and the smaller organizations will use open source whenever they can put their hands on it, because their margins are so slim.

Advertisment

So, its adoption rate varies as per the variations in industry and customer types. Australia is getting into this bandwagon with more open source coming out of that country than you might have seen five years ago. We got some very active open source contributors in our China office as well.

{#PageBreak#}

Coming back to Ruby on Rails, how do you see Indian companies going for this framework?

I think the level of adoption in India is moving at the same pace as it is doing in other places.

Rails is an incredibly powerful development environment. When you think about product development or marketing messaging, lots of the efforts go into trying to figure out what is really going to work from an interaction perspective.

However, with Rails, you can very rapidly try different approaches through some computer user interactions until you settle on the one which works well for you and your client, reducing your work significantly.

India is an exploding economy, with all kinds of opportunities for new products, new services, new customer bases. So, I think, the strength of Rails is going to play very nicely into your economic growth.

ThoughtWorks has been a propagator of Agile methodology. Could you share a little bit about the concept?

Agile is all about breaking down barriers in communication. When we go to a client, we see some of them having partitions between all their desks. So, to talk to somebody, you have to move your chair around. So we help them take all the partitions down to make communication far easier.

Lowering the barriers in communication also helps you get more effective software production. As the agile based arrangement allows for lots of informal sharing, it makes the whole processes easier.

With this methodology, software development happens in iterative developments, where requirements and solutions evolve through collaboration between cross-functional teams. Thus, Agile methods promote a disciplined project management process that encourages frequent inspection and adaptation.

You have recently opened an office in Brazil. What are the trends seen in that market?

They are huge fans of open source. There is a very strong open source community in that country and that is partly the reason why we chose Brazil when we were looking for a Latin American country for time zone alignment. They have several technology centers in their various cities.

Since you have offices in Europe, are you seeing any kind of Euro impact on your business?

Not yet. What we are seeing is a difference in the way customers approach a problem. One of the advantages of being our size is that we need not scout for long-term, multi-billion dollar contracts. It is good especially when people are becoming more cautious about the long-term commitments. However, we had our most profitable year ever during last year.

Any numbers on that?

I can’t quote them offhand. We’re thriving in this economic climate. As we do not play at a huge scale, we need not look for huge deals. And I am sure people are going to be more hesitant to sign a multi-billion or multi-year contract of the sorts that some of the big outsourcers look for.

In our market, companies are financially well placed, look at downturns as an opportunity to get a leap over the competition. We tend to deal with organizations when they’re developing new things, or trying to position themselves for growth or expansion. My armchair economic rationale for why we are still doing well is that, that is the kind of market we operate in.

Do you have some expansion plans in India?

We recently opened an office in Gurgaon. Hiring process for that facility is on. We have set a target to recruit 150 people in the next 18 months.

tech-news