The world's population is estimated at 6.6 billion, and approximately 1 billion people are connected to the network, with millions joining each week. Consequently, for many companies, the network is becoming a core resource for engaging customers and creating a competitive advantage. This adaptation of technology is also having a huge impact on the role of IT and the value that IT brings to running a business.
With these changes, the leadership challenge for the next decade will be the evolution of the CEO, CIO, and CTO roles and the awareness of the dynamics between them. These responsibilities will not only continue to mature individually but also with unity due to developing interdependencies. And the forward-looking, innovative companies that make this transition with speed, foresight, and clarity are the ones most likely to excel regardless of current size or longevity in the market.
Measuring Change in Years Rather than Decades
History is full of examples in which open standards prevailed because they grew markets, while proprietary systems failed because they didn't. Consider the escalating speed and rate of change in computing and communications during the last 25 years — from the mainframe era and Advanced Research Projects Agency Network (ARPANET) to the Internet and anywhere, anytime, anyplace computing on any device. Even when Time magazine named the computer "Person of the Year" in 1982, no one could have predicted how profoundly technology would change our personal lives and the way we do business.
Open source software is likely to have a far greater impact, and at an even faster rate of adoption. It is the single most important shift in the industry since the early 1980s. Why? Because it accelerates network computing adoption and fuels innovation in technology, customer services, and new business models.
From the CXO's perspective, open source offers three tremendous advantages:
- It gives businesses the greatest choice
- It lowers barriers to entry to low cost or no cost
- It provides the most flexible, cost-efficient exit strategy (i.e., a low barrier to exit)
Video interview with Don Grantham and Don McAskill, CEO of photo service SmugMug, on Sun technology and open source.
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Open Source Offers Greater Choice and Flexibility
With open source software and advancements in virtualized architectures, organizations gain the freedom to choose what applications and infrastructure software they want to evaluate (at no cost), which of these solutions they want to deploy, and how they want to pay for that deployment — on-site licenses, hosted solutions, or software as a service (SaaS).
Failing to explore new business models that leverage open source software, virtualization architectures, and a commodity infrastructure is the equivalent of companies that ran their operations in the early 1990s without considering the impact of the Internet. CXOs who failed to understand the power of the network are no longer in those jobs because their companies no longer exist.
The same is true of the potential impact of open source computing and its ability to fuel the datacenter of the future, which is more likely to be a utility service such as the telephone and electricity than today's massive, individualized hardware footprint.
Redshift, Blueshift: Fueling Innovation Everywhere
Today, regardless of industry or company size, businesses tend to view their investments in IT and the value it delivers in one of two ways: Redshift or Blueshift. CXOs that follow a Redshift philosophy use IT for competitive advantage in creating value for their customers. For example, automobile manufacturers incorporate software and computer chips that sync with satellites to provide services such as geo-mapping, help desks, music entertainment, telecommunications, and auto-locater censors.
“Whether Redshift or Blueshift, organizations can use open source and open standards technology to maximize their objectives.”
As a result, their business models have expanded to include revenue streams from customer service check-ups for software updates and relationships with new partners such as LoJack and OnStar. New content, new devices, and new services equal new demands on the network, increasing the demand for complex, high-performance, and integrated business applications.
The Blueshift ideology is all about consolidation and doing more for less. Blueshifting organizations want to maximize the use of their IT assets and increase return on investments while living within existing energy, space, and cooling constraints. Ultimately, these organizations want the most efficient access to large-scale, general purpose computing resources.
Either way, organizations can use open source and open standards technology to maximize their objectives. In a recent meeting with Don McAskill, CEO of online photo service SmugMug, I asked if an open source strategy played a part in his company's vendor selection process.
"It's huge for us," McAskill said. "Our entire business is built on open source. Every company we partner with or buy from ... we want them to participate in the open source community and let us help fix our own problems. If something is closed, we only have one avenue of support. When it's open source we have whomever made it and the huge community who can help us." Watch the video interview.
Once organizations have a clear understanding of their objectives — reducing costs, increasing flexibility, leveraging technical expertise — CXOs should consider piloting new infrastructures and relationships to address those needs.
Open Source Makes Good Economic Sense
The shift to open source applications and commodity infrastructures is as inevitable as the rising of the tide. Why? It makes good economic sense.
Never before have so many been able to access so much computing power as easily and as instantaneously. A recent IDC study shows worldwide revenue for open source software will balloon to $5.8 billion in 2011 from $1.8 billion 2006. That's a growth rate three times faster than the total software market, according to IDC, though open source constitutes a mere 1 percent of worldwide software sales.
The network has changed the way people develop software, how they acquire it, and what they do with it to create value. Open source is fueling a Participation Age that lets innovators, such as developers, stand on the shoulders of technology giants to fuel their own success.
The challenge for CXOs is to identify the opportunities, see them for what they are worth in the eyes of their customers and the market as a whole, and adapt their business models to those conditions.
In Sun's view, open source is the ideal business model for today's massively connected global Web economy.
Regards,
Don Grantham
Executive Vice President
Global Sales & Services
Sun Microsystems, Inc.
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