According to a new IDC study, the growth in adoption of stand-alone open source software reached $1.8 billion in 2006 and will grow 26% annually for the next four years, hitting a total market worth of US$5.8 billion in 2011. IDC found that the open source market is in a significant stage of growth, as previous barriers to adoption fall away. Software distribution is growing, but revenues will take longer to follow suit, researchers found. That"s partly because much open source software is free, while other products use a subscription revenue model rather than getting users to pay a lump sum up front.
In the business world, companies are waking up to the fact that open source opens up more choices and gives them something to use as a bargaining chip with proprietary software vendors. Companies are also becoming more comfortable with subscription revenue as a business model, something common among open source companies, while larger enterprises are also getting on board. Financial backing from venture capitalists is helping boost growth, IDC said.