Gartner Blog Network

Will “Emerging Economies” Propel Open Source?

by Brian Prentice  |  February 12, 2010  |  7 Comments

I’m writing this blog post while 12,000 meters above the Bay of Bengal. I’m on my way home after having spent the last week visiting New Delhi, Bangalore and Mumbai.

As an IT analyst there are few places I consider more interesting to spend time than India. It is an amazing blend of high-calibre people and unique conditions resulting from the country’s sheer size and complexity. While this wasn’t my first trip to India what really hit me this time around was how inappropriate the term “emerging economy” is in describing India’s IT environment. The comparative capability in India is at least on par with rest of the developed world (which nowadays might be better described as “submerging economies”).

There is one glaring comparative difference though. That’s the comparative affordability of package software which, by and large, is priced for developed markets. Nearly every single organization I spoke to is grappling with this challenge. Relative business input costs are much lower in India so COTS software solutions are a disproportionately higher component of the total IT budget.

Which brings me to open source.

Reducing software acquisition costs continues to be one of the biggest reasons that enterprise IT organizations consider open source. While open source software has clearly had a positive effect, the easy savings are harder to find these days – as so many different TCO studies have shown. The parts of the software stack that seem particularly impervious to open source are those where there are very high exit costs. This dampens both the enthusiasm to consider open source in those areas, and by extension, for relevant open source projects to mature rapidly enough to become appealing.

But in countries like India, vendor pricing policies make open source a far more compelling proposition across a far broader range of the software stack. I can’t help but wonder whether even the exit costs associated with ERP systems might be considered acceptable if a viable project emerges.

This situation exists because the US and European vendor community has consistently refused to consider meaningful variable pricing models (converting US-denominated software prices every couple of months based on the current exchange rate does not qualify). Yes, I’ve heard all the reasons why this is theoretically impossible. But the problem here is not the way but the will. The reality is that there has been little motivation on the part of multinational software vendors to bother.

But that is resulting in a disproportionate motivation in countries like India to utilize open source in a far bigger way than we see in developed countries. And this brings me back to my initial observation. Countries like India are not technology backwaters. It’s a country brimming with software engineers and companies that have been highly successful in exploiting their ability to work for much lower wages than developed nations. If a local open source supply and demand equilibrium can emerge than I would think we’d see an explosion of comprehensively designed and supported solutions.

If such a scenario unfolds, the ramifications are significant. The unencumbered availability of open source coupled with the global capabilities of Indian service organizations would make these projects just as viable in developed countries. These so-called emerging economies, therefore, become both the development centers and test markets for a base of open source projects that can shift the balance of power in the US-dominated software market.


Brian Prentice
Research VP
9 years at Gartner
26 years IT industry

Brian Prentice is a research vice president and focuses on emerging technologies and trends with an emphasis on those that impact an organization's software and application strategy... Read Full Bio

Thoughts on Will “Emerging Economies” Propel Open Source?

  1. Social comments and analytics for this post…

    This post was mentioned on Twitter by SupplyChainMgt: Will “Emerging Economies” Propel Open Source?

  2. Korath V Mathew says:

    I think you have not analyzed the scenario correctly , by default or by design. The starting point is use of Linux and open office. ERP will come much later. Custom built solutions are not the correct approach for Enterprise architecture. But an organisation can save lots of money by going for Linux and Open office.

  3. Cristian says:

    Could you please name some big or popular open source projects for which a large number of contributors where from India? Or even better name some started by Indian companies.

  4. TK says:

    I have spent the last 3 weeks in India and a good of that time, talking to various Technology folks (not just IT, but end users as well). I believe that two places where open source can really take off are in IT and development. Sure, end user play is there as well, but you will battle against increasing popularity of APPL . If RH and Canonical can deliver here, and change the (wrong!) perceptions (yes, it still exists) about OSS, I see a *huge* opportunity.

  5. […] is that Linux can help to break open emerging markets such as India. As Gartner Vice President Brian Prentice suggests, entirely new open-source ecosystems have the potential to form in markets like India that are rich […]

  6. @Cristian Zoho and dimdim are two good open source projects by Indians.
    PHP has contributed a lot in the recent surge of open source movement.In India PHP and other open source technologies helped Entrepreneurship.
    There are lot of companies in India that are working in PHP.Even in Bangladesh lot of compnies working in PHP development.

  7. […] around the world as they look at a software industry largely dominated by US firms. Furthermore, as I’ve noted before, the failure of US software firms to craft variable global pricing models is an invitation to […]

Comments are closed

Comments or opinions expressed on this blog are those of the individual contributors only, and do not necessarily represent the views of Gartner, Inc. or its management. Readers may copy and redistribute blog postings on other blogs, or otherwise for private, non-commercial or journalistic purposes, with attribution to Gartner. This content may not be used for any other purposes in any other formats or media. The content on this blog is provided on an "as-is" basis. Gartner shall not be liable for any damages whatsoever arising out of the content or use of this blog.