Ronan Bradley's FinanceTech Directions

I have previously commented in my other blog about the emergence of OSS business models (and this is a topic well covered in the blog 451 CAOS Theory as well as ebizq's own OSS blog ). Specifically, OSS vendors have found it hard to get customers to pay support fees and now often resort to commercial licensing to yield revenue. The revenue problems will only getter worse during the cost clampdown among the user community. In the context of financial services, I think the issue is particularly important as many of the investment banks have not only been significant adopters of OSS, they have also been significant contributors to OSS both in financial terms and in terms of project sponsorship. In 2009, in a credit squeezed banking system, what will happen to OSS?

Unfortunately, I believe that the challenge that vendors already face in getting the users to pay for support will only get worse: This is the most discretionary payment most organisation will ever be asked to make and will inevitably be the first to go. It is simply too dependent on altruism and long term benefits.

However, I do not see this as the end for growth in OSS: the already established projects will inevitably be more widely adopted and supported by the major vendors. At the other end of the spectrum, the independent contributors who have made a living off consultancy related to their niche project will also continue to get work. However, I can see the small specialist vendors being further squeezed between reluctant customers and reluctant funders - both groups wondering where they will get money from to give to the vendor. This means I suspect that the volume of mature and advancing OSS projects may decline outside of the niche projects driven by the single expert and those under the protective wing of the major vendors (IBM, Red Hat et al).

Ronan