After spending some time with my previous post about the growing platform layers of the web – its interesting to note that each layer could be categorized as one of two types:
1. Open Source
2. Hosted Service
Spending some time with the list, the big differences that determine those offered as a hosted service:
- Require a specific skill set outside of traditional application development
- Are constantly changing due to market forces or changing platform requirements
- Have costs that decline significantly with massive scale
As an aside – I think the next few years will see a growing opportunity for Open Source deployment via the SaaS model.
Many companies leveraged the open source model during the mid-2000s simply as a customer acquisition channel – enterprise sales cycles were incredibly long – so why not give developers access to the code base for free – so you can upsell them on services and proprietary licenses far easier in the development process.
Today, in the consumer space, we have an increasing bias towards choosing services that solve a problem – rather than those that offer a feature set. Transferring that same mentality to the enterprise, most companies just want to solve a problem – not get bogged down with features and implementation. Offering the open-source code base as a hosted service is just then a different channel to enter and sell to the enterprise – delivering the service they want on demand.