Boosting innovation through Open Source Software

Boosting innovation through Open Source Software

It is common knowledge that a stalled aircraft falls like a stone. The same can be said about «stalled software», i.e. software where the developing entity has lost its ability to keep up with market needs.

We find «stalled software» in both enterprise legacy systems and in commercial industry specific solutions, particularly in industries characterised by shrinking and marginal markets.

One such marginal software market is the upstream oil and gas sector. This comes from the fact that there are a limited number of oil companies, and due to industrial consolidation the number is shrinking. Add then that most of these companies are very large and have a tradition for doing things in their own way.

The business model the software product industry has been built on new functionality was funded by the sales of todays offering to new customers and a share of the maintenance fee. The caveat that comes with a stalled market is that there are no new customers, with the effect that vendors must turn either to their existing customers for funding or to their shareholders.

Various models for joint development has been used, where the most used model is that the customer pays the vendor to develop something that is mutual beneficial, but where the vendor gets the ownership of the end product. This model is at its best weird.

A better model is to engage in collaborative development using an open source model. Parties contribute to build a shared platform that can work as a vehicle for innovation. Open Source provides the legal and technical framework for this.

The effect is that vendors, competitors and customers joins forces to boost innovation, collaborates on a common platform that enables them to innovate on areas where they want to be distinct for a fraction of the cost that comes with the current license model.