It's obvious that open-source software is exploding everywhere and competing with vendor-provided software. It's obvious that software-as-a-service and cloud computing in general are tapping off what was once per-user hardware and software sales. White-box network devices and servers are emerging as leading hardware choices. Is all this combining to mean the end of vendors, and the beginning of a lot of new integration headaches for users?
The reason it's not farfetched to ask about the survivability of vendors is that shake-outs driven by open source have happened in the past. Of the big proprietary data center system vendors, only IBM has survived the open-source revolution; the rest were M&A targets or just died off. Open networking killed DECnet, SNA, and all the other proprietary models. Linux rules the world in server operating systems. Open architectures create competition and prevent lock-in, but they also limit vendor profits.
Users are accustomed to having a lot of technical support bundled in with their purchases. In the old days, computer vendors did project planning, integration, and operations support either for free or for an annual charge, and a lot of businesses used that support to reduce their need for having technical skills on staff. A new white-box-and-open-source paradigm might be cheaper, but it could threaten that professional services support and force IT organizations to staff up.
A new market
According to my most recent survey, only one out of seven small businesses can actually support their own IT needs, and only four of 10 mid-sized businesses say they can. For both these groups, the notion of a hosted SaaS-like service is the killer option. Almost 90% of both groups say they would buy a SaaS suite if it provided everything they needed, where the number of enterprises who'd go totally to a SaaS model is down in the statistical noise level.
In short, SaaS could open up a whole new market for IT. However, SaaS is more profitable to a provider if it's not based on third-party proprietary hardware and software for which providers have to pay. A transformation to SaaS hosting would probably increase the use of open hardware and software, not proprietary stuff. The SaaS windfall will inevitably accelerate the decline in traditional IT/network vendor influence.
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