For years, proprietary software dominated business systems, locking companies into rigid licences and inflating costs. But change is here. Open-source solutions are proving their worth, even in traditionally cautious industries like finance and utilities, where resilience and adaptability are key.
The tipping point is clear. Rising subscription fees, such as Oracle/Java’s recent pricing shifts, are forcing organisations to rethink their reliance on proprietary systems. Meanwhile, companies like Revolut and Monzo are building robust, secure platforms powered by open source, gaining the agility needed to stay ahead of competitors.
For utilities, open source isn’t just a cost-saving alternative—it’s a smarter strategy for staying future-ready. Businesses to innovate faster, improve efficiency, and stay in control of their tech.
This article will explain how open source can help businesses modernise their systems, keep pace with shifting demands, and deliver better outcomes for customers.
The impact of Oracle Java’s pricing changes
Before we understand why open source is a smart choice, let’s look at a recent example that highlights the risks of relying on proprietary software—Oracle Java’s subscription model changes.
A change to subscription
Java, known as the “language of business,” has been the top choice for developers and 90% of Fortune 500 companies for over 28 years, due to its stability, performance, and strong Oracle Java community.
In January 2023, Oracle quietly shifted its Java SE subscription model to an employee-based system, charging businesses based on total headcount, not just the number of users. This change alarmed many subscribers and resulted in steep increases in licensing fees. According to Gartner, these changes made operations two to five times more expensive for most organisations.
Oracle Java SE Universal Subscription Global Price List (by volume)
Impact on Oracle Java SE user base
By January 2024, many Oracle Java SE subscribers had switched to OpenJDK, the open-source version of Java. Online sentiment towards Oracle has been unfavourable, with many users expressing dissatisfaction in forums. Those who stuck with Oracle are now facing hefty subscription fee increases with little added benefit.
Lessons from Oracle Java SE
Oracle Java's pricing changes have highlighted the risks of proprietary software. In particular, the unexpected cost hikes, less flexibility, and disruptions to critical infrastructure. Open source solutions, on the other hand, give firms more control, reduce vendor lock-in, and allow them to adapt to future changes while keeping costs in check.
The advantages of open source technologies
Even in risk adverse industries such as financial services, open source software is gaining attention thanks to the rise of digital financial services and fintech advancements.
It is expected to grow by 24% by 2025 and companies that embrace open-source benefit from enhanced security, support for cryptocurrency trading, and a boost to fintech innovation.
Cost-effectiveness
The cost advantages of open source software have been a major draw for companies looking to shift from proprietary systems. For companies, open-source reduces operational expenses compared to the unpredictable, high costs of proprietary solutions like Oracle Java SE.
Open source software is often free, allowing startups and established firms to lower development costs and redirect funds to key areas such as compliance, security, and user experience. It also avoids fees like:
- Multi-user licences
- Administrative charges
- Ongoing annual software support charges
These savings help reduce operating expenses while enabling investment in valuable services like user training, ongoing support, and customised development, driving growth and efficiency.
A solution to big tech monopolies
Tech monopolies are tightening their grip. According to CB Insights, a handful of companies handle around 80% of global payment transactions. This concentration limits competition and raises costs for businesses and consumers alike.
Open-source software shifts the balance of power. Decentralising development ensures no single organisation dominates the ecosystem. For fintech companies, it’s a viable alternative to proprietary systems, cutting dependency on dominant players while encouraging fair competition. Open-source approaches prioritise transparency, drive innovation, and lower costs, creating a fairer and more accessible landscape for everyone involved.
Open source and security
Security concerns often make businesses hesitate when considering open-source software. A persistent myth is that public code means weaker protection. In reality, transparency strengthens security by enabling constant public review. Issues are identified and resolved quickly by a global network of experts—unlike proprietary software, where flaws can remain hidden for years.
Take Vocalink, for example. This provider of real-time payment systems relies on Erlang, an open-source language designed for high-availability systems, to ensure secure and scalable operations. Open source allows companies to audit code, maintain compliance, and fix vulnerabilities faster, resulting in stronger fintech infrastructure.
Ongoing community support
Beyond security, open source benefits from vibrant communities of developers and users who share knowledge and collaborate to enhance software. This fosters innovation and accelerates development, allowing for faster adaptation to trends or market demands.
Since the code is open, companies can build custom solutions, which can be contributed back to the community for others to use. The rapid pace of innovation within these communities helps keep the software relevant and adaptable.
Interoperability
Interoperability is a game-changer for open-source solutions, allowing for the seamless integration of diverse applications and systems- essential for services with complex tech stacks.
By adopting open standards (publicly accessible guidelines ensuring compatibility), you can eliminate costly manual integrations and enable plug-and-play functionality. This enhances agility, allowing institutions to adopt the best applications without being tied to a single vendor.
A notable example is NatWest’s Backplane, an open-source interoperability solution built on FDC3 standards. Backplane enables customers and fintechs to integrate their desktop apps with various banking and fintech applications, enhancing the financial desktop experience. This approach fosters innovation, saves time and resources, and creates a more flexible, customer-centric ecosystem.
Future-proofing for longevity
Open-source software has long-term viability. Since the source code is accessible, even if the original team disbands, other organisations, developers or the community at large can maintain and update the software. This ensures the software remains usable and up-to-date, preventing reliance on unsupported tools.
Interested in exploring how open-source solutions like Erlang or Elixir can help future-proof your systems?Contact the Erlang Solutions team.