Open Sources | Rodrigues & Urlocker » Banking on Open Source in Europe

January 31, 2006 | Comments: (0)

Banking on Open Source in Europe

TAGS: Open Source

Our man in Europe, Matthew Langham (aka Silent Penguin) contributes this piece on the state of open source in Germany.

Banking on Open Source
Last week, I attended the "Open Source meets business" conference in Nuremberg, Germany. To my knowledge this was the first conference to be held in Germany with a major focus on the business perspectives of Open Source.

After attending OSBC in San Francisco last year, I was especially interested in seeing how this conference and the views of the German corporations would match or compare to what I had heard at OSBC.

I was very surprised to find so many "managers" talking openly about their use of Open Source at the 2005 OSBC. This was different to my experience at the same time in Germany, where Open Source hadn't yet reached the CxO level.

Well, things have certainly changed in the last year.

The Nuremberg conference was split into 6 parallel industry focussed tracks. In the financial institutions track, high-profile speakers from Deutsche Bank, Noris Bank, HVB and Dresdner Kleinwort Wasserstein outlined how Open Source has become a normal part of their IT strategies. Most of the speakers said that Open Source is now treated no differently from proprietary solutions when it comes to the evaluation of what should be used for a particular solution. They also stressed the point that the licensing cost (or lack of) is not a killer argument for large banks, as the costs of running and maintaining the solution are in the end far higher.

Why are financial institutions moving to Open Source? The arguments given in the conference were no big surprise to anyone who has been involved in Open Source for the last few years: freedom of choice, being able to adapt and change the software, support for standards, flexibility, better quality through the open development process and the possibility of community involvement - to name a few.

The last advantage was a major discussion point in the evening panel discussion of the financial track. Listening to the various speakers, it was clear that there are currently two distinct groups. On the one side, the institutions that try to play some active role in the Open Source community and on the other side the institutions who are pleased to be able to profit from Open Source, but who consider themselves to be outside the community. This group of financial institutions voiced their expectations of how "the community should get its act together and make Open Source more enterprise ready". Or as one of the speakers put it: "We want to run our IT infrastructure as economically as possible - we're not interested in ideological discussions".

All the speakers were positive towards Open Source yet they were quick to point out that Open Source software and its "vendors" must be able to stand up to the strict criteria the institutions have for selecting their suppliers and supplies.

In particular, financial institutions in Germany expect any supplier of Open Source services to take over full responsibility for the used Open Source components and be able to provide the necessary experts within a few hours of any bug report. One German bank is currently generating 8 million Euros of business per day with a solution based mainly on Open Source components. It is easy to imagine why they might not like the idea of having to email the mailing-list if the system grinds to a halt.

German financial institutions are traditionally very restrictive about the software they use and very demanding on what they expect from the respective "solution owner". It is therefore another sign of the Open Source times to see how openly they are now discussing their use of Open Source.

On a side note, the conference had a very strong emphasis on the "Business" part of the title from an organizational standpoint. For example, nearly everyone of the 400 or so attendees wore a suit and the evening reception was put on by the Bavarian State in the Rittersaal (Knights' Hall) of the famous Nuremberg Castle.

I will be heading over to this year's OSBC in a couple of weeks and eager to compare notes from this side of the pond.

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Matthew Langham is the Technical Director of the Open Source Group at S&N AG, Paderborn, Germany. He blogs as The Silent Penguin.

Posted by Dave Rosenberg on January 31, 2006 10:57 AM

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