Questioning the Gartner Report

Gartner’s SaaS-versus-OSS TCO finding triggered some of the most interesting responses to a lecture I delivered yesterday at Carleton University in Ottawa, Canada, on the state of Open Source Software. (Ottawa is the home of the Senators NHL hockey team, Renegades CFL football team, Lynx MLB baseball farm team, 67’s OHL hockey team, and the Wizards soccer club – if you didn’t know.)

The students, entrepreneurs, prof's and VC in the audience asked me great questions about the Gartner report:

• Does this mean that enterprises in 2012 simply want applications residing in front of the firewall as opposed to installed on servers or storage systems in the data center?
• Does this mean that virtualization vendors’ central value proposition will fade by 2012?
• Does this hearken the return of the mainframe with its centralization and value per/MIP (old) and green (new) value proposition?
• Does this mean cloud computing is a shoo-in?
• Won’t direct OSS costs diminish as the market matures?
• Or, does this mean that OSVs are expected to hike their prices in 2010 and 2011 and shift the cost curve to make SaaS more attractive?

In truth, it is almost always a combination of these factors that result in cost curve and associated adoption curve shifts. It is my experience that SaaS applications (SalesForce in particular, but also Constant Contact, Adesso Systems, and others) require customization, additional support beyond what is provisioned, and training is almost always needed. SaaS has many direct and hidden cost categories that are similar to OSS, but the IT value proposition is significantly clearer and more favorable. This value proposition is driving the adoption of cloud computing applications such as Google Apps.

OSS consists of an operating system, infrastructure, middleware, applications, utilities, and so on. Many of these are free as in beer or free as in freedom. But OSS has hidden costs, such as training, documentation, consulting, and other costs. Did the Gartner research take these into account?

One question asked by a bright Carleton student is especially interesting and worth putting out there to readers: What about open source SaaS?