Pipeline Publishing, Volume 5, Issue 9

	This Month's Issue:
	The Changing Landscape

Open to Change

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economic weight of proprietary systems that discourage risk-taking by demanding huge investments for the barest of incremental agility.

Open source software at large is estimated to have saved businesses more than $60 billion since the concept of collaborative software development began to gather serious momentum in the 1990s. In an open source deployment, source code is provided to users with no license fee – a concept that’s shocking to traditional software companies that are accustomed to collecting big payments for systems only they understand. Users then have an open invitation to add, test, and perfect additional features that produce increasingly valuable iterations of the software. In some models, customers can choose whether to openly publish their enhancements – contributing to a steady improvement in performance that others can leverage – or pay a fee to keep them for themselves.

Over time, the process has worked to produce some of the most stable, scalable, innovation-embracing applications driving enterprise-level operations worldwide. Linux is one well-known creation of the open source movement, and there are thousands of others across all sectors of the economy, including the popular suite of customer-relationship management applications from Salesforce.com, whose slogan – “Success, not software” – dramatizes the new approach to application development.

New Capabilities

Open source development environments empower a new breed of providers with a fundamentally different cost model than the model adopted by legacy software developers. That translates to enormous reductions in the cost of back-office environments. But open source approaches also provide a faster roadmap to innovative new business models that involve a complex series of relationships between customers, third-party providers, advertisers, and e-commerce participants.

That’s where the disconnection with current platforms occurs. Legacy systems presume a simple, one-to-one relationship of provider to customer: You count the minutes used or track the TV channels offered, and send out a corresponding bill.

The internal economics of legacy telecommunications software are out of whack with what the market demands today: powerful, flexible, efficient and affordable back-office systems.

Orchestrating that sort of classic billing relationship remains a “must” for any new back-office system, to be sure. But the new models for doing business demand that telecommunications providers also must be able to calculate and address third-party collaborations in which subscribers pay nothing at all to participate in a new application. The sort of targeted-messaging approaches that have transformed the Internet into a multi-billion dollar advertising platform also are well-suited for the broader telecommunications world, if participants can adequately orchestrate the interplay among participants. But doing so demands business and operational support systems that are far more agile, accommodating, and nimble than the hulking, expensive incumbents that stifle innovation.

The good news is that it’s possible, by leveraging open-source development approaches, to seize the collective innovation and creativity of many developers who together represent a deeper talent base than any single provider can muster – at an extremely affordable cost.

Already, several innovative telecommunications companies have embraced open source software environments for back-office systems. Within the next 12 months, their lead will be followed by at least one major carrier, and the race will be on. The telecom providers that are swiftest and smartest in retooling back-office BSS and OSS systems to embrace the power of open-source approaches will capture the early market lead in developing new revenue implementations that deliver impressive growth, while sharply reducing operating expenses.

Inflection points happen in industries when a confluence of forces drives the need for change. The telecommunications industry is at one of those points now. Old software cost models are overdue for replacement, and open source systems are poised as successor. The only question now is who will get there first.

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