Cloud is not the biggest threat to enterprise software companies like Oracle (ORCL), Microsoft (MSFT) and SAP (SAP).
It's open source.
A new Gartner survey of IT managers, released in a blog post today by the Harvard Business Review, finds nearly all managers using open source in some way, with 22.5% now using it consistently, in all departments of the company.
The biggest portion of the market, 46.3%, is still limiting the use of open source to specific projects or departments. The most disquieting data point may be that open source is now 29% of collective enterprise software portfolios, meaning it's about to pass internal development.
The biggest hindrance to open source in the enterprise, the survey indicates, is the lack of a specific policy framework governing its use.
All this comes against the backdrop of companies squeezing IT budgets and looking closely at cloud projects in order to manage more servers with fewer people. Programming skills and cloud knowledge are seen as more vital than sys/admin experience.
Greater knowledge of open source brings with it a better understanding of open source issues, and this could prove troublesome not only for Oracle and Microsoft, but for cloud vendors such as VMWare (VMW), which are taking a "one throat to choke" approach to their cloud offerings.
A central tenet of open source is that you don't want one throat to choke, that you want broad community involvement instead, as well as the opportunity - perhaps the obligation - to contribute your own tweaks to the code base.
Who benefits from these trends? Red Hat (RHT) and IBM (IBM), along with a host of VC-funded open source software companies like Alfresco, SugarCRM and Pentaho that may be looking to cash-out, either through an IPO or a sale to one of those big enterprise boys.
If markets keep rising, look for some open source IPOs. If they stall, look for take-outs. Open source hasn't seen any investor excitement since Oracle's purchase of Sun, but that may be about to change.
Disclosure: I am long IBM.
