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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

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.

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