Standalone OSS market to hit US$5.8bn

1 Jun 2007

Significant demand for standalone open source software (OSS) will see the market grow at a rate of 26pc a year to reach US$5.8bn by 2011, according to IDC.

IDC said that worldwide revenue from standalone open source software reached US$1.8bn in 2006.

Accelerated adoption of standalone OSS will be driven by the gradual removal of barriers to adoption, claimed the analyst firm.

However, IDC’s Matt Lawton warned that growth in revenue will lag behind the growth in distributed open source software products.

“We are in the early stages of the development and deployment of OSS,” said Lawton. “The market is still quite immature, especially now that we see active open source projects in all layers of the software stack.

“Although we see healthy growth in revenue from standalone open source software, we must keep in mind that revenue will substantially lag behind the distribution of open source software.

“Many distributions of standalone open source software are free, while paid distributions typically are based on pay-as-you-go subscriptions rather than pay-up-front license fees.”

IDC’s study showed that the drivers for OSS adoption, and in particular commercial adoption of OSS, include increased customer interest in OSS as customers realise that OSS provides them with more choice and leverage with proprietary software vendors.

In addition, more financial backing from venture capitalists, more comfort with subscription revenue as a business model and increased interest in OSS within larger enterprise organisations are helping to accelerate the OSS adoption rate.

By John Kennedy