Open-source analytics and AI software is eroding the value of established vendors’ tools

Open-source software is driving growth in the number of AI and analytics installations, but is limiting traditional vendors’ revenue growth. It is not surprising that some analysts in the telecoms sector have forecast significant levels of revenue growth in the market (growth at a CAGR of up to 40% has been predicted), given the hype around AI. However, these predictions often confuse revenue growth with growth in the number of use cases or implementations of AI. Traditional software models generate revenue through licence sales, whereas open-source software is free and revenue comes from the services that support them. Open-source tools are becoming the default for many organisations that wish to support more-advanced AI and analytics use cases. Open-source tools are now supported by established licensing organisations, and provide a reliable channel to market though trusted software distribution organisations such as Apache, Berkley Software Distribution (BSD), Boost, MIT Licence and GNU LGPL.