…has the advantage of having architected its product around standards, which is typical of open source software.
"We can snap into a standards-based, componentised, services-oriented architecture, where customers can use as much or little software as they want," Walter said. "Versus the proprietary vendors, who have big stacks where their stuff works well with their stuff."
The open source process, where code is typically released publicly on a regular basis, favours more rapid development, said Kim Polese, the chief executive of open source services company SpikeSource.
"Open source applications are becoming more feature-rich all the time... Users and VARs [value-added resellers] are adding extensions and making them more rich," Polese said, adding that smaller open source companies tend to be more nimble.
"With the proprietary software model, you have an entrenched model of having major releases every 12 to 18 months, where everything is bundled into that release," she said. "In contrast, open source puts control in with the customer and the VARs, because they can add those features easily. They don't have to wait for the vendors."
Competitive highs and lows
Existing closed-source software companies are not sitting idly by as the open source wave goes by. The largest infrastructure software vendors — IBM, Microsoft, Oracle, BEA Systems and Sun — have embraced open source products and development practices to varying degrees.
In terms of competition, open source is still mainly a concern at the low-end, said Robert Shimp, vice president of technology marketing at Oracle. Surveys taken by the database giant indicate that customers are most concerned about high-end features to do with performance, reliability and security, and price is less important, he said.
"Open source technology and community processes are complementary to commercial software. A lot of people, unfortunately, wrongly paint them as opposing forces," Shimp said.
Oracle has stepped up its involvement in open source projects in the past year. It also acquired Sleepycat, which sells support for the open source Berkeley embedded database.
"The open source community deserves a lot of credit for developing some innovative business models and some interesting technology," he said. "The notion of making a product free to use and contribute to and you pay for support is an interesting business model we're certainly looking at closely."
Zimbra's Dietzen said that Linux distributor Red Hat has demonstrated that an open source company selling support around freely available software can grow to a substantial size.
A significant difference with Red Hat and the round of open source companies formed in the last three or four years is that many incomers to the industry have developed their software from scratch, he noted.
"We're following in the footsteps of Red Hat, which has a nice growing business," Dietzen said. "The stunning part is that they don't own the IP (intellectual property). This next generation, like Zimbra, does own our IP, and that gives us an inherent advantage in capturing value in the market."
