Open sores: The true cost of 'free' open source software

It’s accepted wisdom that there is no such thing as a free lunch. However, the fact that open source software is being developed by a global community of talented engineers who then release it to companies for use free of charge is turning this principle on its head.

This software quite literally costs nothing to buy: unlike proprietary alternatives, there are no licences to purchase. In the current economic climate, with budgets cut to the bone, surely this can only be a very good thing.

Even the most dyed-in-the-wool sceptic could not credibly deny that some open source software is of the highest quality and value to businesses of all sizes, across multiple vertical sectors. The majority of enterprise internet businesses run at least some if not all the elements of the so-called LAMP collection of open source technologies. This group of software products includes the Linux operating system to power servers, Apache as the web server, MySQL as the database and PHP as the scripting language. These are not furry-tooth geeks messing around in their bedrooms; these are some of the biggest internet businesses in the world ­ the likes of Amazon, AOL, Google, eBay and Facebook.

Indeed, if we were in any doubt over the credibility of open source we only need to remember that Microsoft ­ the company that clearly has most to lose if all software was supplied free of charge ­ recently sealed an alliance with Novell, an open source software vendor and once its most bitter rival. This has the pair selling enterprise systems based on a ‘best of breed’ combination of Microsoft’s proprietary offerings and Novell’s open source technologies. Cynics might say this move by Microsoft may be a Mafia-style stratagem of keeping its enemies closer than its friends. But others argue it illustrates that open source software has reached a level of maturity readying it to power systems in even the largest businesses.

And the UK government certainly seems to buy this. In March, Whitehall proclaimed it was “levelling the playing field” for open source software in the public sector.

This software is often of the highest quality and it is free. What’s the catch? Can the open source advocates be right? Can companies really have their free cake, eat it and make trifle from the leftovers? Well, up to a point.

Let’s take the phenomenally successful Linux, which is proven, mature and well supported by enterprise-class partners. The argument that the various distributions of Linux are free in terms of licensing costs is likely to butter very few parsnips for enterprises. Technology research company Quocirca points out that the couple of hundred quid that can be saved on a licence will almost certainly be insignificant when calculating the total cost of ownership of the software. The vast majority of this cost will be from supporting the technology in-house or from hiring an IT partner, such as IBM or HP-Accenture.

If we look at open source away from the server room and on the desktop where it will be used by non-technical staff, the picture becomes more complex. The savings from, for example, ditching Microsoft Office across an enterprise with 10,000 PC desktops and replacing it with the open source application Open Office ­ which is largely compatible with Microsoft’s alternative ­ is very compelling, at least on paper. With a list price of around £350 per seat, this adds up to a notional saving of £3.5m.

As with the server software, companies should accept that ongoing support costs will dwarf licensing costs by an order of magnitude. And although it echoes the proverb “If you want to get there, I wouldn’t start from here,” it is vital not to forget that virtually everyone is used to Microsoft’s software. So, despite the fact that Open Office has a very similar look and feel to Microsoft Office, user training is needed. This means money spent on courses and a loss of productivity during training.

The next issue centres on advanced functionality such as macros written into documents and spreadsheets, which is likely to create headaches when firms try to share documents between the rival software suites. Unless a company exists in a bubble, its suppliers, clients and partners up and down the value chain will almost certainly be using Microsoft Office and these incompatibilities can create serious problems. Then there is the ‘format wars’ issue that we have touched on here before: Microsoft’s Open XML format is different from the OpenDocument format used in Open Office.

Another important factor to consider is that the per-seat licensing cost will be considerably below the retail price of the software as big discounts are available for enterprise customers. In many cases, companies will find that an open source software product offers a compelling combination of functionality and value for money, but the fact that such software is free is, for enterprises, utterly irrelevant.

In calculating the value proposition of such a move, FDs need to consider all of these issues and determine if a migration to open source is in the best interest of the business, or just the purse.