By Stephan Schambach, Demandware Founder & Executive Chairman

Thank you all for the responses to the post on open source. Great feedback and I have to say, while some of the comments are quite pointed, the dialogue and debate are excellent.

Based on some of the commentary, it would appear there's room for clarity and explanation in some of my original posting and there are a few general points that deserve response. The point-by-point responses are at the bottom of the posting.

Before that however, it would be useful to explain some of the background thinking that went into the post, based on my experience being a software entrepreneur—first in licensed software, now in on-demand—and a guy very close to the business (and technical) operations of a healthy growing company.

When we founded Demandware, one of our core philosophies was (and still is) to live what we preach—to focus on our core competencies and outsource the rest. In IT, for example, the rule is that if we need a system for something, then it must be SaaS or on-demand, and only if we don't find a SaaS vendor, we will look into alternatives, preferably Open Source, and commercial software only as a method of last resort.

As a result, we have a tiny 2-employee IT department for a sizable company, and there are absolutely no complaints about IT. We use an on-demand service for email and calendaring, Salesforce.com for CRM and marketing automation, Hubspot for web marketing, Intacct for financials, OpenAir for professional services automation, Concur for travel and expense management and the list goes on. And, believe it or not, we use the standard Demandware SaaS platform to run our website. I am very happy with the decisions we made. Business is not held up by IT.

Now picture a successful retailer with a great brand presence, a couple hundred stores, website etc. Their core focus is to merchandise, to understand consumers and to interact with them through multiple channels. Should this company focus on hiring software developers and IT staff, to build and operate a complex eCommerce platform consisting of server software (Open Source or commercial makes no difference here), databases, firewalls, redundancy, monitoring, backup, security ...? Or would it be smarter to enable the business side, the web-savvy merchandisers, to get their day-job done through a SaaS service that gives them all tools and flexibility without reliance on software developers and IT staff? I say, companies who know what their core competencies are the ones who will win.

OpenSource is a great innovation machine. It is incredibly successful where millions need infrastructure-type software that is free of licensing and modification restraints. But it is a rather technical building block, not a business solution. The higher up you move the software stack, the fewer potential end users and thus, a smaller community of developers. There are a finite number of companies in need of a high-end eCommerce platform, and building it "for free" is not an option for a viable business model. OpenSource vendors then inevitably offer a "pro" version that is not much different from a licensed software product, and it comes with the same problems: the vendor does not take responsibility for the actual business value generation. And this is, in my mind, no recipe for the future of enterprise software.

(BTW: we are not the first to have this debate. If you'd like to read a parallel discussion on the pros and cons of the open source business model, check out The Failure of Open Source Software on BusinessWeek.

As an end user, instead of just software download and customer/community support, I would like the vendor to deliver an internet-based system that is always up and running, that empowers the business users in my company and makes them more productive at what they do best. I want the vendor to accept responsibility for keeping this system modern and up-to-date with best-practice through automated software updates. I want the system to scale from where I start as a company, to wherever I can scale my business, without having to buy servers or re-architect my platform. I want to be able to configure and customize the system through Internet-based development tools. I want to interface it with my internal systems, or with other on-demand vendors easily.

Now to the specific comments:

We did not discuss OpenSource benefits enough. I believe I did discuss some benefits at the end of the article, but the point of the article was not to discuss the many benefits of OpenSource (those are known). Rather the point I was trying to make was that OpenSource in itself is not a recipe for success for a business application and the needs of retailers and brands.

Demandware holds retailers in a captive relationship, where OpenSource doesn't. Depends on how you look at it. In a heavily customized Open Source app, the business side—the eCommerce merchandisers—are dependent on either an agency for every change and pay through the nose, or they depend on an IT department and talent is hard to find, expensive, and even harder to keep. With Demandware, there is vendor dependency, of course. But what is delivered is well defined, and there is the same customization flexibility as with other development environments. Both paths create dependency: the question is, which path is goaled on your success?

Enterprise OpenSouce has an easily upgradeable core. This may be true in an academic sense. The companies I interviewed for my original post though all ran their eCommerce sites on different versions of different OpenSource packages and said that they could not upgrade, because the effort to do so with all the customization and integration is not in their budget.

Many viable OSS businesses. Yes, there are many successful OpenSource businesses and we fully recognize this.