HP: Open source is more profitable

Hewlett-Packard says it is starting to see higher returns from open source contracts, compared to deals involving proprietary software.

The company claims it is starting to see higher returns from open source contracts.

Hewlett-Packard claims it has started to make higher margins from open source than proprietary software in some instances, due to the support costs associated with migration.

Speaking to ZDNet UK on Thursday, HP's open source and Linux chief technology officer Bdale Garbee said that open source margins are sometimes higher than for Microsoft-based products. "In some cases, the margin can be greater to us because we can provide a more complete solution to customers," said Garbee, speaking at the LinuxWorld event in London.

He added that organizations that migrate to open source from a primarily Microsoft environment might need more training and support.

Much has been made of the cost-savings associated with open source software. The news that HP could be realizing greater profits from the technology will add to the debate on the true cost of ownership of open source.

However, Garbee added that organisations which have skills in Unix could often pick up the necessary skills. "A lot of the fundamental skills for managing a Unix environment apply very well to the Linux platform, because Linux is like Unix in many ways," he said.

Despite the benefits, persuading an organisation to adopt open-source often takes a lot of effort on HP's part, Garbee admitted.

"The sales and procurement cycles are long: it's usually a major technology overhaul to decide whether it is technically feasible and to review processes," he said. "But the revenue has a long tail as well. HP can afford to invest and pursue longer life cycle projects, which some of the smaller vendors can't afford to do."

HP is urging businesses to embrace open-source, claiming the market for non-proprietary standards is growing fast.

"Interest in Linux is rampant," Garbee enthused. "Everyone is at least looking at it. Interest is very broad," he said, adding that the telecoms sector and governments were particularly interested.

HP's success in the public sector has been relatively muted so far and the company is unable to name any U.K. government organisations which have purchased its open source offerings.

Several local governments, most notably the London Borough of Newham, have closely evaluated open source before deciding to keep their existing Windows systems.

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