Despite Security Fears, Open Source Is Fuelling Innovation

LONDON, UNITED KINGDOM --(Marketwired - October 25, 2016) -

• External security threats cited as top challenge to open source adoption
• However, vast majority (90 percent) that use some form of open source; almost all say it has become more professional over the past three years (89 percent)
• Open source responsible for increased innovation, as well as saving an average of six months and £ 30,146 per project

According to research commissioned by Rackspace® ( NYSE : RAX ) and carried out by Vanson Bourne ^* amongst 300 large UK organisations, more than half (54 percent) of those using open source ¹ technologies perceive external security threats as the biggest challenge to adoption. In fact, nearly half (49 percent) of the respondents whose organisations are not yet 100 percent open source still see proprietary, or closed source, technologies as more secure, with a further 43 percent concerned about the vulnerabilities related to open source code.

These insights were part of the Rackspace State of Open Source report, which was conducted amongst IT decision makers in large UK businesses, and found that -- despite these fears -- open source is thriving in the enterprise. 90 percent of those surveyed deploy open source-based enterprise applications, while the vast majority (89 percent) say that, over the last three years, open source has become more professional, making it more attractive for enterprise development and use.

Business benefits of open source

Open source users cite several benefits driving their usage:

• Six in 10 (60 percent) cited cost savings as the top benefit, reducing average cost per project by £30,146. With most IT projects at the lower end of the cost scale, these savings are significant.
• Around half (49 percent) reported greater innovation because of open source -- and 46 percent are driven to open source because of the competitive opportunities, with 30 percent who see the ability to respond more quickly to market trends as a driver.
• Almost half (45 percent) said that it enabled them to get products and services to market faster -- with project lifecycles reduced by an average of six months.

These benefits have led most (85 percent) respondents that use open source to migrate a closed source project to an open source project at some point.

John Engates, Chief Technology Officer at Rackspace, said: "While open source technologies have been around for many years, it is great to see that enterprise businesses are finally dipping their toes in and seeing the tangible benefits. However, while the perception issue is significant, we don't expect that open source usage will decline because of security concerns. As an industry, open source code is amongst the most scrutinised, and its commitment to transparency means that -- where there are vulnerabilities -- businesses will be aware of these and take steps to protect themselves."

App development top usage for open source, Artificial Intelligence and Internet of Things-related deployments still low

In terms of how open source is being used within the enterprise, respondents also provided their most common deployments:

• Application development (63 percent)
• Web servers (52 percent)
• Operating systems (51 percent)
• Databases (49 percent)
• Infrastructure (46 percent)

Although the Internet of Things (IoT) and Artificial Intelligence (AI) are amongst the most talked about technological advances in recent times, businesses are not using open source widely in either. In fact, just a quarter (27 percent) of businesses are using open source for IoT and a fifth (20 percent) for AI -- despite the majority of innovations coming through in these sectors being based (in some form at least) on open sourced code.

Private education (67 percent) leads amongst open source users for AI -- encouraging given the level of research that takes place in these institutions, aiming to further the scope of AI in the future.

However, while open source's popularity is undoubted, the research clearly demonstrates that businesses prefer using mixed sources and the flexibility this affords. Of those not already using entirely open source, just over half of respondents (51 percent) said that they would never become '100 percent open source' (i.e use open source for all of their projects) -- taking a 'best of both worlds' approach with mixed sources. Just two percent of organisations who currently use some form of open source said that they would move to a 100 percent open source model in the next two years, with only 31 percent in the next five years.

Engates, continues: "Every industry and business sector faces disruption, enabled by the digitalisation of products and services, and the ability to manage the scale and agility needed in today's competitive environment. With an increasing amount of a company's value derived from software, the acceptance of open source as a viable solution helps businesses compete. By using the same strategies and tactics as the market leaders, businesses of all sizes will be able to build and launch innovative solutions faster than by using closed source technologies in isolation."

Having the right skills for the job

Only around one in three respondents think that they have all of the necessary skills within their organisation to develop solutions using open source -- particularly when it comes to using components/technologies (32 percent), implementing open source projects (33 percent) and managing open source projects (34 percent). In addition, a majority of respondents indicated that they are actively taking steps to increase their workforce's capabilities:

• 66 percent are upskilling employees to implement open source technology.
• 62 percent are providing open source development support.
• 62 percent are providing training around open source technology management.

In fact, 80 percent of the respondents from organisations that use open source say that their organisation relies on partners and third parties to develop, implement and/or manage their open source technologies.

About Rackspace

Rackspace ( NYSE : RAX ), the #1 managed cloud company, helps businesses tap the power of cloud computing without the complexity and cost of managing it on their own. Rackspace engineers deliver specialized expertise, easy-to-use tools, and Fanatical Support® for leading technologies developed by AWS, Google, Microsoft, OpenStack, VMware and others. The company serves customers in 120 countries, including more than half of the FORTUNE 100. Rackspace was named a leader in the 2015 Gartner Magic Quadrant for Cloud-Enabled Managed Hosting, and has been honoured within the top 100 Great Places to Work for the past 12 years. Learn more at www.rackspace.co.uk

Forward-Looking Statement

This press release contains forward-looking statements that involve risks, uncertainties and assumptions. If such risks or uncertainties materialize or such assumptions prove incorrect, the results of Rackspace Hosting could differ materially from those expressed or implied by such forward-looking statements and assumptions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including any statements about Rackspace survey results that may suggest trends for the industry; any statements relating to expected or predicted behaviours of consumers and the impact of cloud computing; any statements of expectation or belief directly relating to Rackspace business derived from the survey results; any statements of expectation or belief regarding future events, and any statements of assumptions underlying any of the foregoing. Risks, uncertainties and assumptions include a substantial margin of error in the survey results, inconsistencies in respondent's understanding and Rackspace's analysis of survey questions and results, the possibility that expected benefits from any shift in consumer behaviour may not materialize as expected; the achievement of expected operational results from any shift in consumer behaviour; changes in the economy, technological and competitive factors, regulatory factors and other risks that are described in Rackspace Hosting's Form 10-Q for the quarter ended June 30, 2016 filed with the SEC on August 9, 2016. Except as required by law, Rackspace Hosting assumes no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

*About the research

Research conducted by Vanson Bourne amongst 300 UK IT decision makers from organisations of 1,000+ employees and revenues of £500m+ in September 2016.

¹ Open source denotes software for which the original source code is made freely available and may be redistributed and modified among other organisations.