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Enterprise software evolution, from custom, to COTS, to SaaS, to COSS

Software made for enterprises already underwent 2 evolutions. A 3rd one — to Commercial Open Source Software (COSS) — is starting now.

Custom software

In the beginning everyone made their own software. This meant you had the depth of functionality you needed, if you missed anything you just added it. But it is very expensive to make everything yourself.

Commercial Off The Shelf (COTS)

The next step was buying software from a vendor which meant the development cost could be shared among multiple organizations. This lost some depth of functionality but it was much more affordable. And now you were potentially locked-in to an external vendor. As COTS got more popular the competition between various vendors did increase capabilities and reduce cost.

Software as a Service (SaaS)

Salesforce pioneered the delivery of enterprise software as a service. Running software in the cloud reduced installation and operating costs. For the vast majority of customers SaaS also increased the uptime and performance of the application.

Commercial Open Source Software (COSS)

We’re now in the next evolution with COSS software replacing SaaS. Open source allows for companies to contribute functionality they want to see, meaning you have the depth of functionality you need. The lower operating costs of SaaS software through the use of cloud are retained though the use of cloud native technologies like Kubernetes. And open source software reduces lock-in because a project can be forked.

COSS enabled you to add what you want yourself like custom software, but benefit from shared investment across companies for all of the common capabilities, quality, and speed of innovation. And you have the SaaS/Cloud benefits of the reduced costs and increased reliability that comes with modern cloud approaches.

Overview

+--------+-------+------------+----------+-----------------+
| | Depth | Affordable | Operable | Reduced lock-in |
+--------+-------+------------+----------+-----------------+
| Custom | V | | | V |
| COTS | | V | | |
| SaaS | | V | V | |
| COSS | V | V | V | V |
+--------+-------+------------+----------+-----------------+

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Sid Sijbrandij

Sid Sijbrandij

Legal first name is Sytse. Co-founder and CEO of GitLab. I like innovative projects, accessible education, all remote work, charter cities, and macro economics.

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