Worldwide Revenue from Standalone Open Source Software Will Grow 26% to Reach $5.8 Billion by 2011, IDC Research Indicates

FRAMINGHAM, MA. – MAY 31, 2007 – The market for standalone open source software (OSS) is in a significant growth stage, a new study from IDC reveals. Adoption of OSS will accelerate over the forecast period of 2007 through 2011 as barriers to adoption get knocked down. Growth in revenue, however, will lag behind the growth in distribution of open source software.

"We are in the early stages of the development and deployment of OSS," said Matt Lawton, program director of IDC's Open Source Software Business Models research program. "The market is still quite immature, especially now that we see active open source projects in all layers of the software stack. Although we see healthy growth in revenue from standalone open source software, we must keep in mind that revenue will substantially lag behind the distribution of open source software. Many distributions of standalone open source software are free, while paid distributions typically are based on pay-as-you-go subscriptions rather than pay-up-front license fees."

IDC's study shows that the drivers for OSS adoption, and in particular commercial adoption of OSS, include increased customer interest in OSS as customers realize that OSS provides them with more choice and leverage with proprietary software vendors. In addition, more financial backing from venture capitalists, more comfort with subscription revenue as a business model, and increased interest in OSS within larger enterprise organizations are helping to accelerate the OSS adoption rate.

Among the key results presented in IDC's study are the following:

— Worldwide revenue from standalone open source software reached $1.8 billion in 2006.

— This revenue will reach $5.8 billion in 2011, representing a compound annual growth rate (CAGR) of 26% from 2006 to 2011.

— Software vendors are advised to consider several factors when evaluating how best to leverage open source software as a business opportunity, including the most appropriate business model, the appropriate usage of partnerships and alliances, and the characteristics of the community supporting the open source software.

This IDC study, Worldwide Open Source Software Business Models 2007-2011 Forecast: A Preliminary View (IDC #206681) provides a top-down sizing of revenue from standalone open source software (OSS) in 2006 and a 2007-2011 forecast for this market. Historical and forecast revenue data is shown for total worldwide standalone OSS.

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