Open Source & Outsourcing

Continuing on the open source theme, here is a question for you.

How does open source play out in the outsourcing world?

• I think outsourcing companies have been delivering somewhat of an open source code to their customers for years. The offshore outsourcing companies delivered custom software and products to clients with source code on a work for hire basis. Of course it is not same as free open source software developed by a community. And the software is not open to the public. Neverthless I think it is close to the commercial open source movement at present. And a lot of times the rationale given by outsourcing companies, particilarly the offshore ones, for build vs buy was that they gave source code ownership to companies and delivered customer software at the same or lower cost as licensing. And this is still the model to a large extent in outsourcing.
  
  
• At the same time, open source is disruptive to the whole software industry and therefore can immediatly affect outsourcing firms especially in the product engineering space.
  
  
• Outsourced vendors & SIs offering IT solutions implementation and support services are likely to see more opportunities with open source adoption in enterprises. A number of companies have already taken up open source implementation and support services as a key growth area.
  
  
• There is also open outsourcing that can be a threat to outsourcing companies. Open outsoucing can eliminate the need for outsourcing companies again in the product development space.
  
  
• I see commercial open source as an opportunity for outsourcing firms to enter product space rather than being stuck being pure service firms. It is also an opportunity for outsourcers to give back to the community by participating and developing truly open source software free for all while continuing to grow their outsourcing services. Infact being an active participant in the open source community can be a key competitive advantage in the not so distant future.
  
  
• Product engineering outsourcing firms have been using open source software to and building/integrating them in to products and applications. One of the key factors to be aware of is the licensing issues associated with integrating open source code into products you deliver to clients. Read the licensing agreement for any open source code you decide to use and make sure your client is ok with the licensing agreement.
  
  
• Companies that makes commercial open source software are very sensitive to the licensing and copyright surrounding open source code they make available and therefore reluctant to outsource.
  

What say?