(The headline is simple sensationalism to get eyeballs)
But I do think irrelevance is something that GE Smallworlds needs to think about.
I wonder if GE's Smallworld product will experience similar move-to-open pressures that ESRI is responding to? Maybe it already is but I have not seen any public-facing evidence of that.
ESRI is actively acknowledging Open Source and I imagine that it is doing so in order to stay ahead of the game (http://www.esri.com/news/arcnews/spring11articles/open-source-technology-and-esri.html). But when you read the article that says that one of ESRI's top federal agency account managers has moved to OpenGeo, it makes me wonder if all the "getting in front of open source" is not enough to control the trend.
One of the first blog posts I ever wrote was "Smallworld Open Source Software". I read it again today and was amazed that not much has changed in the Smallworld community as it relates to open source. The comments to the post are definitely worth reading.
I used to think that the version managed datastores (VMDS) were something that set Smallworld above its competition. In my unscientific analysis, I actually think it did/does provide better functionality than the ESRI and Oracle workspaces/versioning, etc. What seems to have snuck up without too much fanfare are the open-source projects like GeoGit that are also trying to address this issue. In addition, github announced in June 2013 that it now supports rendering GeoJSON and TopoJSON. I realize that GeoJSON and TopoJSON are not necessarily good matches for some of the complex networks modelled by Smallworld users. It is interesting that open tools like git are being pushed to support the same issues that Smallworld was originally designed to address (versioning and distributed data).
I think that if GE does not open up Smallworld to a wider community it runs the risk of becoming irrelevant. I am sure that the irrelevance will not happen overnight. But if GE keeps fighting the GIS war with ESRI without considering projects like GeoGit, we could be in for an interesting few years in the Smallworld realm.