Spending on open source support services in Canada to soar

Published: March 2nd, 2007

The market for open source support services is going to boom over the next five years, according to a recent Gartner survey.

The study of organizations in geographies around the world – including Canada and the U.S. – predict that spending in this country will likely see a compound annual growth rate of 16.1 per cent between 2006 and 2010. That’s marginally below the expectation in the U.S. and almost three per cent more than the global average.

“The good news for VARs is they’re going to see more and more business in this area,” said Bob Igou of Gartner and a co-author of the study.

The bad news, of course, is that spending on open source support services – which includes consulting and software support – is only a fraction of the spending on support services for all computer platforms.

In the U.S. alone last year that was expected to be $52 billion (all figures quoted here are in U.S. dollars, compared to $2.2 billion on open source support).

Still, Igou said open source partners should take comfort in the trend.

Open source technologies, such as Linux distributions, are usually compiled under the General Public Licence and cannot be sold. Instead companies that put together application stacks and their VAR partners, such as Red Hat, make their money by selling support packages.

Because this was a new forecast area, Gartner broke down its figures into “worst case,” “most likely” and “best case” scenarios.

The worst case spending scenario will see open source support spending in Canada over the five-year period ending in 2010 going from $125 million a year to $182 million.

Gartner felt it most likely will go from $128 million a year to $233 million. The most optimistic view sees it going from $130 million a year to $251 million.

The most likely compound annual growth rate in Canada of 16.1 per cent looks great, especially because it’s more than twice the growth rate of the software services spend by organizations around the world during the same period.

Igou said that’s because the open source is still an emerging market. Other platforms – Unix variants, Windows, mainframes – have been around for at least a decade.

But the survey, combined with his work watching the support services industry, has led him to conclude that “more and more organizations are making use of open source and they are purchasing commercial support.”

Open source – including Linux – has come out of the back room or pilot stage and into production in many companies, Igou said. These include full applications such as [www.sugarcrm.com] SugarCRM or business applications from [www.spikesource.com] SpikeSource.

Gartner found 16 to 20 per cent of North American respondents to a survey said open source applications are part of their IT portfolios.

Open source is attractive to some, Igou said, because developers around the world are able to have input on the underlying code before applications are released. That makes many applications as good as commercial programs because they get “a whole lot more scrutiny than some commercial code.”

Comment: cdnedit@itbusiness.ca