Authored by: Grace Chng, Tech Writer, EDB
As the cloud computing market continues to expand, estimated to hit US$832.1 billion by 2025, it will likely have a positive impact on the growth of open source products, which are usually offered as SaaS solutions.
The growth of the cloud market, coupled with the impact of the pandemic, may be why Boards of Directors and senior managers appear more willing to spend on digital technologies that meet changing business needs and customer requirements. This observation was offered by a group of information technology leaders during a roundtable discussion on the outlook of the open-source sector. The roundtable was hosted by PostgreSQL provider and contributor, EDB, in November 2020.
The leaders, namely Puneet Gupta, co-founder and Chief Technology Officer of DigiBankASIA, the fintech company behind UNObank; fintech specialist Emil Chan, Chairman, The Association of Cloud & Computing Mobile Professionals; Daniel Yuen, Founder & Chief Operating Officer, OpenCertHub; and Frank Courtney-Jay, Regional Sales Director, EDB said that, all in all, the outlook of open source is looking quite rosy for the next three years, as enterprise leaders view open source more favourably.
Nonetheless, friction remains in open source adoption.
Emil Chan believes that enterprises are saddled with an “if it’s not broken, don’t fix it” mindset, which is especially true in the financial services industry. This is because financial services are governed by complex regulatory and compliance guidelines, which presents very little incentive for change to occur. He says, “Risk is the showstopper.”
Thus, enterprises are not yet introducing open-source into core business applications, even though they may be applying it to their IT platform.
There may be cultural factors at play. Daniel Yuen noted that while Asian managers can be less risk averse, they often do not want to disturb the status quo, especially when databases are linked to other applications.
Yet the panel agreed that the rise of innovative and disruptive fintech companies, with applications like digital currencies and real-time settlements, may nudge traditional financial institutions to change.
Chan said: “I see real-time settlement as a golden moment for them to get rid of old systems. And when they look for a new system, they will consider a new and different process, and open source might be one of their choices”.
Providing the biggest nudge for enterprises holding on to legacy software could come from the emergence of the virtual banks, who are challenging the status quo by eliminating physical branches. Chan says that the digital banks are more likely to use open source databases on the cloud to deliver their services.
Gupta, who is in the process of launching a new digital bank called UNO, said the development is in the middle software layer. “Very few banks, including the digital banks, will rebuild the core banking system. There will be new workflows, including automated onboarding of customers, and new ways of deciding credit. There will also be tons of new challenges to resolve, some of which open source can do well.”
The roundtable participants all agreed that the key to the adoption of open source is the availability of a supportive ecosystem. This would include software updates, sharing of best practices and engineering support. For PostgreSQL users, EDB stages events to help enterprises share experiences and learn best practices. It also provides engineering support.
Courtney-Jay pointed out that PostgreSQL alone has thousands of developers around the world contributing code, and developers can tap in on such communities.
What about talent?
To understand the massive amounts of information produced, the skill that is needed most is how to harvest business intelligence from databases that hold hundreds of millions of records.
While data scientists make good business intelligence analysts, their training is protracted.
Yuen commented that there is a concept of “citizen data scientists,” that is, professionals armed with the right skills to bridge the gap between those doing self-service analytics (such as business users), and those doing advanced analytics as data scientists.
He said that citizen data scientists can potentially undertake certified training courses, after which they could create or generate models that leverage analytics. Enterprises who want to implement open source databases will view these skilled professionals favourably.
Gupta believes that ultimately Boards of Directors and CXOs will be persuaded to adopt open source as part of their businesses’ digital transformation strategy.
His advice to those evaluating open source is, “Discussion of digital transformation is too broad. Instead, focus on the platforms critical to business operations and concentrate on very specific goals like the need to scale or access new markets.”