Three Open Source Opportunities for SaaS Businesses

The Future of Open Source Survey 2013 results were just recently released and the news is almost entirely good news for SaaS providers. In reviewing the results I see three new or improved opportunities for SaaS companies. As a backdrop to these opportunities it is important to keep in mind the tremendous growth of Open Source Software (OSS) over the past year. There are now over 1,000,000 open source projects an increase from 600,000 a year ago, it is an area of substantial investment by venture capitalists and others, and the sponsors of this survey make the case that open source has taken over as the major software business model going forward.

The opportunity to run your SaaS business using Open Source Software (OSS) as the core application has always been there, Aquia and SugarCRM are both good examples. This type of business model is sometimes referred to as Open SaaS. In the most recent survey results this type of business model has moved up from 5th in 2011, to 4th in 2012 to 2nd in 2013. Companies are increasingly using this model and it is now only behind providing support as the most preferred business model for OSS. My belief is that this has been driven in a substantial manner by the proven success of the companies using this model. So if you are looking for a way to start a SaaS company, product line or product this can be a great opportunity. Healthcare is a fast growing area of OSS projects so there are new opportunities to provide Open SaaS solutions opening up regularly in this area.

Security of OSS has been either a concern in the past or at least not one of the top reasons to use OSS. In my article “5 Tips for Using Open Source Software in a SaaS business” I indicate that one of the areas that is very important to research is the security of OSS projects and matching the project to your own security needs. The opportunity and good news here is that with improvement of security and the improved perception of OSS security you have a greater increased chance of find the OSS project that meets both your functional and security needs. In addition as the perception of OSS security improves the use of OSS can be part of your customer communication on security. All appearances are that security has gone from a OSS concern and risk to an OSS strength and you can use this to your advantage in your SaaS business.

Innovation continues to be an OSS strength. Some areas cited as areas of continued innovation with OSS include API growth and the increased acceptance of open APIs. APIs are in important part of SaaS offer strategies for integration with other applications and data management. OSS has leading solutions in operating systems, cloud infrastructure services, mobile and development tools all areas important to SaaS providers and there is every reason to believe that OSS will continue to lead in these areas. Databases and “Big Data” have substantial OSS projects and these projects have major impact on the future in these areas. Basing your SaaS application on key OSS projects positions you to be able to take advantage of substantial innovation and whether it is infrastructure or specialized areas such as reporting, analytics or community management is a great way to leverage your R&D budget.

These are three great ways to take advantage of OSS in your SaaS business. Unfortunately, the proliferation of OSS projects continues to make the OSS selection task more difficult but I believe that the advantages far outweigh the disadvantages and that there are ways to make good decisions when selecting OSS projects.


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