The stakes are high. As an Open Solutions Association (OSA) board member and executive VP of Centric CRM, my number-one fear is that the creativity and dynamism of the past decade could come to nothing if open source application vendors don't stand together and take a collective position. As isolated entities they run the risk of getting picked off, one-by-one, leaving an industry landscape dominated by multibillion-dollar giants like Microsoft and Oracle.

To avoid such a scenario, the major challenge facing open source vendors is to move beyond a community of enthusiasts and make open source applications a credible option at both the enterprise and SMB level.

There's no doubt that the initial success of open source software development and adoption - what me might call "Open Source 1.0" - has been one of the most important phenomena in the IT industry of the past decade. It has consisted of the emergence and widespread deployment of various open source software solutions, primarily at the operating system and middleware levels.

At the application level, however, the open source phenomenon is still in its early stages and the market is still very small and fragmented. There are many competing business models with little consensus as yet as to how best to commercialize open source software development.

Much of the energy and headline-grabbing buzz around open source applications has come from relatively loosely structured communities making use of technologies that in the view of many observers may not be appropriate for widespread adoption by enterprise-level businesses. The very earliest releases of applications based on such technologies have appeared in the marketplace in the past year or two. The impact they will make on the SMB market in particular is unclear to say the least.

Open Source 2.0: Reasons To Be Cheerful
One major source of optimism is the recent emergence of what we might call Open Source 2.0. These are open source applications that have been conceived and developed from the ground up as enterprise-class solutions. Such applications are architected with the security and scalability requirements of commercial enterprises in mind. In general they have been developed by serious companies for serious companies.

True, their business models and licenses vary considerably. However, there are also some striking similarities among this latest crop of solutions. Notably, many have been developed in Java and are primarily aimed at the larger end of the SMB market. All these companies share the common trait of providing serious enterprise-ready commercial open source solutions. This emergence of genuine commercial open source applications and vendors is the main driving force behind Open Source 2.0. Their ranks include Openbravo, Hyperic, JasperSoft, Centric CRM, Adaptive Planning, and Talend in fields covering ERP, network/resource monitoring, business intelligence, CRM, business performance management, and data integration. In addition, closely allied companies such as SpikeSource provide support and infrastructure management, while integrators such as Unisys and CorraTech help customers stitch these products together.

All of these companies, and others like them, have banded together in common cause in the Open Solutions Alliance. Furthermore, this list of vendors together represents horizontal solutions that could be logically grouped together to solve a broad array of business problems. There is also a nice international flavor to this list, with vendors from the U.S., Europe, and Australasia represented.

The Open Source Advantage
A key value proposition for open source solutions is the so-called ecosystem that can form to deliver compelling customer value. Unlike the closed model of, say, a Microsoft, not all solution components need be provided by the same vendor. The open nature of the products - in theory, at least - allows for a level of integration typically difficult to achieve with proprietary systems from competing vendors.

A major challenge for open source providers is to build an application that simultaneously embodies the spirit of open source while fulfilling all the requirements necessary to be seriously considered ready for the modern enterprise.

This means solving a number of potentially conflicting requirements. On the one hand, it must appeal to the open source community, be accessible, understandable, inexpensive or even free, and run entirely on an open source infrastructure. On the other hand, however, it must be built on an enterprise-class architecture, support large installations, and be capable of running on any application stack the customer specifies with little or no change.

From Religious Enthusiasts to Commercial Realists
To achieve products with this kind of balance requires a fundamental change in culture in the open source community, a change that is occurring as we speak. In the same way that open source product development moved from Open Source 1.0 to Open Source 2.0, so the open source community needs to grow up and transform itself from a loose agglomeration of well-meaning enthusiasts to a well-organized band of realists sharing similar economic objectives.

I believe the time is ripe for the emergence of a new type of open source community, something we might call Community 2.0. Such communities will seek to marry the advantages of open source development - large groups of developers improving the code, viral spread of solutions, and the essential appeal of open source products - with a commercial business model.

This new breed of community will be assembled and driven by vendors motivated by economic considerations. The vendors in such a community will likely share a common set of concerns, such as competing with Microsoft on a general level. In their own category they will compete with high-end proprietary vendors such as Oracle, Siebel, SAP, Cognos, and OpenView. In terms of lower-end offerings they will share rivals from other open source solutions such as Nagios, SugarCRM, Compiere, and standalone desktop applications such as ACT! And Goldmine.

Other shared concerns include preventing code forking, the need for effective distribution channels, and the ability to convince enterprise customers to accept open source licenses and technology. Delivering professional service and support, creating vibrant, growing communities, and the need to drive PR and marketing campaigns are of equal importance.

Perhaps most pressing of all will be developing and promoting effective interoperability solutions between various open solutions by rationalizing disparate data models, support offerings, and licensing schemes.

Given these shared set of concerns, and the fragmented nature of the enterprise open source marketplace, significant benefits will accrue to vendors that can come together to work on common objectives. The benefits of cooperation include the generation of "critical mass" for a variety of situations; the "heft" to compete against Microsoft; the stronger appeal for large OEM and distribution deals; and the greater allure for significant partnerships with large infrastructure providers. The benefits to customers of close cooperation are obvious: best-of-breed open solutions that deliver both the benefits of integrated product suites and of open source solutions.

Enter the Open Solutions Alliance
The Open Solutions Alliance was formed last November in a bid to achieve the benefits listed above. Fundamental to our working relationship is an understanding that participating vendors need to be fundamentally aligned in their business objectives and outlook. An evolutionary approach to assembling the alliance and tackling its common objectives is in place to reduce "implementation risk." The OSA has already achieved some impressive goals like recruiting leading ISVs, integrators, and even customers to its ranks. It has published several roadmaps outlining best practices and implementation approaches for integrated offerings. It has hosted several successful end-user events in a variety of settings. And at LinuxWorld, in August 2007, unveiled several working interoperability prototypes that include common customer view and single sign-on. This early success is in large part due to the establishment of high levels of trust and a sense of shared mission among members. In short, transparency and an "open ethos" prevail and help to ensure our success.

Next Steps
To make the initiative successful, each vendor will have to make some meaningful contributions. Contributions might ultimately include some or all of the following components: infrastructure (for example, Centric CRM contributed its community management tools for the Web site); financial support; staffing support (for committees or board); mutual engineering support for integration issues; lead sharing; collaboration on core business activities such as VAR recruitment; and making some number of seats/servers "free" for bundling and distribution deals.

United We Stand, Divided We Fall
Now is the time for a leading group of enterprise open source vendors representing a broad array of best-of-breed solutions to stand together for mutual benefit. With effective collective action dedicated to improving interoperability and awareness for enterprise-class open business solutions, I believe we have a good shot at keeping the multibillion software giants at bay.