Scenario 1: "Fight continues"

Scenario 1: “Fight continues”

2006-2007

Major oil disruption due to geopolitical unrest, terrorist activity in Saudi Arabia and a shutdown of oil production in Venezuela, coupled with growing demand from developed and developing countries result in oil prices reaching $85 a barrel.

Industry is struggling; service and software industry feels the consequences too. Giants of the software industry start to react to recession.

2008-2009

Firms are struggling for survival. Outsourcing and moving to cheaper labor markets is increased throughout the industry, including software. Consequently, lots of companies in western countries are shut down and unemployment increases, intensifying the recession in western countries. Recession hits developing countries, but not as hard, since industry is moving into the region.

Governments are promoting closed source software, since software companies are filling national budget through income taxes and are providing employment. Bigger firms and, even more so, financial institutions, fear security issues of using open source and stick to using proprietary software even though its more expensive.

Due to recession consumer spending decreases. Consumers do not invest in technology and are looking for cheaper alternatives, open source being one of them. Google becomes major information source. Development of device related application and services, based on web platform, decreases.

Social problems increase, thus governments might be forced to decrease their funding of educational institutions. Universities become more motivated to find cheaper information systems solutions. They connect into networks of Universities and build common IS systems based on open source software. Smaller firms try to cut their operating costs by moving to open source IS systems.

Market values of IT firms falls. Microsoft still has excess cash and is buying its cheaper targets cheap.

2010-2015

Economy recovers. Importance of open source has grown in past five years. Incomes of proprietary software developers are hurt. Lobbies of proprietary software creators force governments to promote closed source.

Proprietary software industry develops in oligopoly, with Google and Microsoft being major players. They have to address the issue of open source competition. In this fight unbundling of software and service is inevitable. This will result in two distinct markets for software and support. Customers trust service and maintenance to established names. Microsoft and Google gain power in this area. Open-source fights back, try to create reputation.

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