Open source cloud computing: The future midmarket sweet spot?

What happens when open source and cloud computing collide? Cost savings, flexibility and (at least one open source vendor hopes) midmarket CIOs checking it out.

Open source CRM provider SugarCRM has launched an on-demand version of its software that is included free with an on-premise license.

Subscribers can switch back and forth between the local server and the cloud version, called Open Cloud. They can make one version a hot backup for disaster recovery, or use one version for testing and the other in production if they like. “There’s no one asking you if you want on-demand or on-site; you get both,” said Martin Schneider, director of product marketing at SugarCRM Inc.

Jay Lyman, an open source analyst at The 451 Group, said the number of startups emerging pairing open source with cloud computing is a clear indication of a growing trend. “Open source is a good fit for cloud computing because of the interoperability and the portability,” he said. “We’re going to see rapid experimentation, testing and vendors using this as an opportunity to learn customer pain points and match the right apps in with the clouds.”

In many cases, small and midsized businesses will investigate cloud computing the same way they checked out open source – by experimenting with and investigating minimal fees. “[CIOs] can’t revamp their entire systems in the down economy, but they can look into trying new things while still leveraging their existing applications with open source cloud offerings,” Lyman said.