Gabriele Columbro, Linux Foundation, Europe | OSS North America 2023

This is techstrong tv. Welcome back to the Open Source Summit. We're here with Gab Colombo from the Lennox Foundation, and we're talking about open source in the financial services sector in particular, there's a whole group dedicated to that particular venue, as they say, I guess, is it Fidelity now that just joined the group?

That was the news from today. All Right. So explain to us what the group does and why do we need a group specifically for the financial services sector.

Is this kind of like a double secret handshake group for what's the deal? Well, Um, we started FNAs actually about seven years ago now. Um, I was selected as the executive director then.

We were not part of the Linux Foundation. And, you know, when we started, it was primarily driven by the goal of, uh, improving the talent pool in, in an industry that has certainly over the last 20 years, has seen, uh, you know, a lot of the ma major talent move to big tech, moved to the West Coast, you know, historically Wall Street was a, a very sought after and still is to an extent. But, um, you know, developers nowadays, especially in the new generations, want to be able to continue foster, you know, their own personal profile as they, as they work for an organization.

And open source gives a great, you know, way to do so. And so, um, you know, we started six years ago. It started with talent.

It started with, you know, cost reduction, kind of the usual, uh, uh, sort of benefits that, that we all know in the opensource community opensource can bring to, to corporate. Um, over the years, uh, we realized that as a vertical foundation, we are bound to deliver business value throughout the whole value chain of financial service. So if you think about it, you know, most open source foundation are horizontal, are focused around the piece of technology that then gets, you know, applied to different verticals.

We actually cannot start the other way around. We start from business problems that are very specific to financial services. And we've helped this industry, uh, realize that not all they do is effectively competitive differentiator, actually, like in most other industries.

And we've seen the innovation that open source has brought over the last 20 years, I would argue that 70, 80% is non differentiating. And so, um, really we've helped over the last few years, uh, improving the interpretability of this, this, um, industry, growing the talent pool, and also providing a much more sort of transparent way for, you know, historically very competitive and very conservative industries, you know, to, to collaborate in the open, which is way more effective when you think about this, like many other industries, it's undergoing, you know, the digital transformation. I mean, I don't love that word, but the reality is that open source is as much as cloud the pillar of any industry that is digitalizing.

And it takes a while for those guys to come around and trust something. I mean, you've been at this for now seven years. Seven years, and infidelity is just getting on board.

Yes. So, uh, are there other organizations that you're trying to recruit for this? I mean, what do they look like and, you know, what makes them hesitant?

It's interesting, uh, because, uh, it is really due to our vertical nature, uh, that we are seeing the foundation really expanding across the value chain open in a way, follow the money. And we started with our sort of key sponsorship and membership base coming from the largest investment banks in the world. Uh, so our 12 platinum members were really, you know, the Goldman Sachs, the JP Morgan, Morgan Stanley, ct, Deutsche Bank, you know, globally the largest investment banks.

And now we are seeing more and more the, uh, if you follow, for example, the trade lifecycle and, and who they collaborate and they transact with. We're starting now to see a lot of buy side firms, so your typical asset managers, portfolio managers. Last year we added, uh, you know, point 72, which is a, uh, quant, uh, you know, high frequency trading, uh, uh, organization.

Um, Wellington sits on our board. And so Fidelity is a major addition for us because kind of going back to the previous comment on, on delivering business value, now we can use open source to really interconnect different parts of the industry. We have, you know, the sell side, the buy side.

Earlier in the year we announced Discover, and, uh, that's our second car processor, uh, uh, beyond Amex. So think about really following the whole, uh, uh, life cycle of a trade on one hand. And of course, increasingly we are looking at payments, commercial banking, and sort of the broader financial services.

So when you think about which are the firms that, that we are continuing to engage, we continue to see a lot of, of growth potential on the buy side. They have a lot to gain to really better interpret with their providers. Um, we are seeing more and more technology companies that of course are major providers to this industry.

And this is certainly very sought after industry, um, in terms of, you know, better, uh, uh, matching the needs of, of, uh, you know, a regulated and pretty unique industry. So, you know, uh, Google joined us last year. We have, you know, uh, the likes of not just, uh, uh, commercial open source vendors, but really a lot of fintechs that are coming, coming to the table.

So I expect that in the next, you know, one or two years we'll see pretty much all the cloud service providers joining as you know, uh, all of these, these folks are going through the cloud journey. Uh, and more and more hopefully, you know, uh, I think FinTech as the FinTech open source foundation should be, uh, sort of the next big, uh, area for us of development. Nice.

And FinTech is red hot and there's a lot of startup companies in that space, but you're also seem to be saying anybody who provides infrastructure that enables these applications can join as well. Absolutely. Cloud, you know, cloud compliance, you know, uh, even from a regulatory standpoint, you know, they, uh, uh, there's been in Europe and in the United States, major calls from the Department of Treasury, from the S E c, uh, to regulate how these banks go to cloud to prevent cloud concentration risks.

I mean, these are systemically important, uh, organizations. And of course, as we all know, this year has been a pretty complicated year for the sector. Um, but what I'm really pleased to see is that instead of pulling back from open source, uh, they are doubling down in, you know, in times of, of higher sort of market pressure.

Um, you are actually seeing these firms, again, doubling down on the understanding that open source can make them more efficient, more lean, more, you know, access to broader talent that, you know, over the last 10, 20 years has been sort of relegated to the West coast, if that makes sense. Um, so it's, uh, it's a very, very exciting time for, uh, for finance. Is there a correlation between any kind of downturn and their interest in open source?

Do they kind of look at that and go, yeah, we need to save some boxer? I think you are onto something that we had last year. The, the fastest growth in terms of members.

We added 18 members last year, some really, really cool logos. Um, I, you know, Jim likes to say our executive director, that, that open source counter cyclical, uh, because effectively to your point, when, when there is more pressure for efficiency, uh, as long as there is enough understanding and maturity of what open source can, can bring to the table, uh, firms tend to increase their investment. We've adding q1, our highest growth of contributors on record.

We, we added, you know, 20% quarter on quarter, we added about 70% year on year. So, um, you know, this, this level of open collaboration in financial services as much as, you know, 10 years ago it sounded like an oxymoron, uh, easier to stay. Do the people who are in this vertical, a lot of them compete with each other.

So how do you establish that level of trust? Cuz a lot of them are like, I don't wanna be sitting at the table. I don't wanna be seen with that other guy.

It's, uh, it's a really, really good question. Um, so I think there's, there's multiple layers here. The first layer is the baseline of policies that the Linux Foundation provides.

As you can imagine, not only these firms are very competitive, but they're also highly regulated. And so even to sit at the table with a competitor or a customer, they need to have from their compliance department, very strong assurances that we have the right antitrust conflict of interest, uh, uh, and, you know, any other really policy that would raise any eyebrows. And of course, you know, the Linux Foundation has now over 20 year of experiences in refining how competitors can collaborate.

So that part, you know, it was hard at the beginning, but when we joined the Linux Foundation in 2020, it became much more, you know, uh, established and, and, and understood. Um, the second level is, uh, cultural. Um, as you say, these folks not only are very competitive, uh, but they're also very risk averse in general.

And so, you know, uh, what I realize over last years is that, of course, if you think about sort of the, the stakeholders that we engage with, uh, at developer level, we got their mind share developers be developers, uh, they want to collaborate with other developers, they want to solve problems that are bigger than what they can do within their firewall. So, uh, you know, they want to be, in a way liberated to be able to develop in the open, like very much any other industry a allow their developers to do. Increasingly in the last three, four years, we've had the mind share of, of sea levels.

Many of my folks, uh, in the board are CTOs or, or CIOs, whether they understand at the very level of detail what open source brings to the table. That is a process of course. Um, but they do understand that open source has delivered basically every piece of innovation in the last 20 years.

And so they understand the need of, of jumping onto this bandwagon, let's say. Um, the complex part is what I refer to as the frozen middle. Uh, the, the, you know, this is a pretty large organization, pretty hierarchical.

And of course, they are generally incentivized to be risk averse, to not take risk to continue executing, uh, you know, without getting in trouble. And so, you know, I would say that over the last few years we were able to, going back to that connection to business value through our strategic initiatives, being able to prove the value through quick wins, uh, and then bigger wins. And then, you know, disruptive wins.

Like, you know, open source disrupts and creates markets and commoditize competitors. Um, so I think we are, we are at the cusp of, of, uh, a pretty strong acceleration where even, uh, sort of the, the middle layers are starting to really understand what open source collaboration can bring to their day by day and to their individual careers, to be honest. Mm-hmm.

Do you think that they're also finding it's easier to recruit developers if they have an open source profile or a commitment there? Because after all, developers, you know, they want to hang with the cool kids, right? Absolutely.

And I would say on two levels. One, of course, they love to have the logo on our webpage, but that is just the beginning. You know, certainly being open source forward and, you know, one of our strategic initiatives really helping them to be what we call open source ready.

You know, have a process, have technology, have policies to allow lic consumption in a safe and, and, you know, compliant way, but also contribution, you know, provision their developers to be able to collaborate and contribute to opensource projects from their very laptop. Until a few years ago, they had to take their personal laptop, go home and do it, you know, from their, their, uh, office or, or garage on the quiet. Exactly.

Mm-hmm. Um, uh, there is definitely one area where, especially with the new generations that are, I would say open source native, um, they really understand how, not just the logo, but a substantial engagement in open source is, is fundamental for talent. The second bit is really from a technology perspective, meaning many of these organizations, uh, have built their own technology forever, including in the lower layers of the stack.

Many of these organization have their own Java virtual machine. They have their own, uh, uh, Linux distribution, they have their own programming languages and, uh, you know, one name names. But many of these organizations are understanding that, you know, why continue to build on a proprietary language where, for example, there is a Python ecosystem that, you know, every day gets thousands, hundreds of thousands of contributors and people building modules that actually will accelerate your business.

And so I think, I think, you know, again, the, the process is irreversible at this point. They are really understanding that talent is gonna come through over, And a dozen people that created the original proprietary platform are now retired on a beach somewhere. Right?

Exactly. Exactly. Cross pollination is really, we're seeing more and more execs and developers coming from the West coast, and there is certainly also reusing some barriers.

There's a lot of discussion about who's contributing to open source and who's not. Do you think that the financial services companies contribute more because they are organized in a group and they are kind of more cognizant of the issues, and so they are more likely to help out with a patch or do something for a project or a maintainer? Yeah, I mean, look, I, I won't paint a, you know, just a happy picture here.

There's much more work and much more penetration that open source, uh, can have in financial services, and it's really about, you know, the maturity of the specific company. But, uh, you know, what I've seen over the last two years is that, especially as we joined the Linux Foundation and we brought all these, you know, very senior, uh, individuals and sort of, um, very highly relevant, uh, financial services organizations, uh, what I've seen is not just an increase in contributions into PHS projects, therefore, you know, almost self-serving, solving their own industry problems better. But we have seen an increased investment in upstream.

Um, for example, open ssf. I think it's a prime example. Uh, you know, uh, firms like Citi, JP Morgan, fidelity, uh, uh, Goldman Sachs, they all have invested and actively lead, uh, uh, groups into open ssf.

After all, you know, open source security and sustainability is, you know, a global problem, and everyone has a role to play. Mm-hmm. And honestly, financial institutions are one of, you know, probably only second to governments are the ones that, you know, stand to lose the most mm-hmm.

Uh, from things like Locke for Shell. Um, so I, I would say to your point, yes, I, I think we are seeing, I wouldn't say that financial institutions are already open source leaders outside of Pheno, where of course, they are the main contributors right now. Uh, but we are seeing, uh, again, a almost like a, a a a metamorphosis where some of these organizations are becoming much more akin to tech companies.

And as that happens, you're gonna see more and more contribution from these organizations. Do you think we'll see other vertical industries follow suit? I mean, can there be others in healthcare?

Where else, where there's plenty other segments? Right, Absolutely. And, uh, shameless plug here, as you know, I also run Linux Foundation Europe.

And, uh, one of the, you know, early findings in the last seven months since we launched, uh, is really that vertical industry's collaboration is a very high potential, especially in Europe, where of course, there's not as much, you know, big tech if you want as, as as here on the West Coast. Um, but there are already other vertical syndel foundation, and I expect many more to be a major driver of growth for Europe and hopefully globally. Um, for example, LF Energy, it's a big Europe strong foundation in dlf, uh, really collaborating, bringing together, again, pretty conservative, generally state owned, uh, power providers.

Um, we had, uh, a Linux Foundation healthcare, um, um, I left public healthcare effort, uh, which was born, you know, in the wake of, of Covid trying to build, you know, uh, COVID apps and again, mutualize and understand that this is, you know, a bigger problem than any of the organizations could solve. Um, so I see a lot of potential, definitely much more in healthcare. Again, very regulated industry.

I argue that it's gonna take even longer than financial services for these folks. Um, you know, just in terms of the technology gap, uh, uh, uh, uh, where they are. Um, but I see a major potential for more vertical type collaborations.

Um, again, primarily in Europe. That's I'm biased, but I think on a global basis like pH All right, folks heard it here. When it comes to open source, we have nothing to fear, but fear itself.

Hey, gab, thanks for being on the Show. Thank you so much. Thanks for having me.

All right. And we'll be back in a minute.