OpenITWorks CEO Michael Grove contends that it is a mistake to think of commercial open source as its own business model. Instead, open source is one of many possible means to an end of making a single software business model successful -- that of selling value to customers through software. Businesses should focus their strategic planning on how to best monetize their value propositions, through open source or something else.

For most of my formative years, I was primarily interested in building stuff as a personal hobby. Back then, when I first learned about Open Source, I was skeptical for one primary reason: financial (I need money ergo I need a job/gig). This reason is no longer a concern due to the brave souls that made open source software lucrative for businesses to build on.

Open-source software has hastened the evolution of Web applications as it drives out the inefficiencies and costs of proprietary software to enable companies like Google and Twitter to scale. But it's not just proprietary software that is feeling the squeeze...

As businesses look to become less dependent on software vendors to solve their integration issues there is a groundswell of support for open source solutions. For companies already using open source, a survey of IT decision makers by Forrester earlier this year found that 51% were using it in mission-critical applications.

So what happened to open source as a business? There was a wave of “commercial open source” companies that were going to change the world, including SugarCRM, Alfresco, Jasper, Pentaho, and ActiveGrid, a company I started in 2003 to bring open source software into businesses.

OPEN source software can reduce costs and improve security dramatically, yet many people are a bit apprehensive about getting their feet wet. Typical of this concern, reader John Cohon wrote in with a number of questions about shifting to open source. To the extent that my answers to him might help other companies or individuals make the shift, I’m running them here.

Open source software and widespread instrumentation have lowered the costs of producing IT management software. Open source systems management companies are using the free nature of an open source product, coupled with the cheap distribution the Web enables, to boot-strap their businesses.

Telephony continues to remain the dominant form of customer interaction for most businesses today, and is certainly a fundamental component of effective service.

The paper is particularly interesting because it focuses on how businesses integrate free software and open source components into software and services that they distribute to customers. This is an interesting contrast to most similar surveys that study FOSS adoption by businesses, because most surveys of this nature tend to focus on companies using FOSS as infrastructure.