Open source software as a viable business choice

Microsoft has told us it's successful because it makes better products at cheaper prices. However, Microsoft Office can now be matched on quality and beaten on price by Ximian's Evolution and Sun Microsystem's OpenOffice, the free version of StarOffice.
Written by Russell Dyer, Contributor

Microsoft has told us it's successful because it makes better products at cheaper prices. However, Microsoft Office can now be matched on quality and beaten on price by Ximian's Evolution and Sun Microsystem's OpenOffice, the free version of StarOffice. Combined, they are said to be the first open source contenders against the formidable Microsoft Office product and its approximately 90-percent desktop market share. And now that Microsoft has begun pressuring businesses to pay licensing fees, the environment is particularly primed for open source to take some of that market share. All that's left is for proponents of open source to familiarize themselves with these products and learn how to promote them in a way that business people can understand.

A common scenario
Let's look at a common scenario that is playing out in many companies. Suppose you're an IT manager at a small company that's a subsidiary of a much larger company. Your office has 150 computers, of which 100 are used by a few shifts of customer service personnel. These workers only use Microsoft Internet Explorer as an interface to an in-house program on the server that your department developed. The other 50 computers are used by office workers who primarily run Microsoft Office 97. Five of these computers also have a Microsoft Windows-based accounting program installed. Almost all of the computers were purchased with Microsoft Windows 95 pre-installed, but they've all been upgraded over time to Microsoft Windows 98 using five licensed copies that came with five newer computers that were purchased a while back. At this point, the users are fairly content with the software, and they politely ignore comments you make occasionally about the merits of open source software.

A new development
Now let's suppose your CIO receives a certified letter from Microsoft requesting that he conduct a self-audit of the office's software licenses and stating that the company must purchase any missing licenses within 30 days. The letter also says that if he is unwilling to perform a self-audit, Microsoft's legal department is ready to petition the local court to allow it to do the audit and possibly follow up with a lawsuit for any copyright law violations. Your CIO has already called his boss and he was told to comply. He was also told that license purchases will come out of his office's budget. Your CIO is upset and asks you to make a quick assessment of what it will cost to get in compliance.

You count the five Microsoft Windows 98 licenses and the one Microsoft Office 97 license. You check with one of your favorite software vendors, and you find out that you can get away with upgrading to Microsoft Windows XP (the Win98 licenses are the same price), but you'll have to buy the full standard version of Microsoft Office XP since you don't want to pay an on-going licensing fee. With rough prices in hand, you're able to whip together a calculation to give to the CIO.

  • MS Windows XP
    Quantity: 150
    Price: 180
    Total: 27,000
  • MS Office XP
    Quantity: 50
    Price: 360
    Total: 18,000
    Grand Total: $45,000
After staring at these numbers and realizing that his bonus is lost, he says that he had no idea that it would be so much. A brief, pointless discussion ensues as to how it got to be so much, before he asks if there is any way around it. For the first time in the five years that you've been working there, your CIO is open to discussing open source. You pitch Evolution, OpenOffice, and Linux. You compare them to their Microsoft counterparts and explain the cost. You bring him over to your PC, which has these programs installed on it, and let him try them out. He's impressed and comments that they seem easy to use.

Assessing the real cost
Business people usually won't seriously consider software that's free. If it's free, they figure it's not worth anything. What does get their attention is being able to save over $45,000 while getting the software they need. There's a subtle difference here that's important to understand when extolling the virtues of open source: Saying that open source software is free causes uninformed executives to make comparisons with Microsoft software based on price, which they view as a measure of quality. Saying that the company will save money on software licenses by switching to open source software, which will still allow the employees to get their work done, keeps the focus on the cost difference. When hundreds of dollars of savings are multiplied over hundreds of computers, the desire to save significant amounts of money will overwhelm the tendency to favor Microsoft.

Deployment scenario
Having the go-ahead to deploy open source software on everyone's computers, you and your staff convert all of the workstations to Linux except the five in the accounting department that need Microsoft Windows. You assign the five Microsoft Windows 98 licenses to them with the proviso that when you have time, you'll work out how to get the accounting program to run under the Windows emulator, Wine.

Some of the users complain, but their manager deals with them. The shift workers adapt without problems because the Web browser, Galeon, works fine and because your staff didn't use any Microsoft dll's when they were developing the in-house software. The office workers weren't happy at first, but they adjusted within about a month to Linux, thanks to the Gnome desktop. As for Evolution and OpenOffice, most users took to them almost immediately, with only a couple of people having problems using some advanced features for the first time.

This scenario may seem a bit far-fetched, until you consider the players' motivations. The user just wants to get his work done. And the CIO in this scenario is delighted with the change because you saved his bonus and because the corporate office praised him for such creative thinking. So a business's acceptance of open source really isn't that far-fetched.

Moral of the story
For those of us who understand the value of open source, community-supported software, applications like Evolution and OpenOffice are definitely cheaper than the Microsoft alternatives. Also, for non-technical business managers who are faced with the cumulative high cost of Microsoft software licenses, there is a huge advantage to switching to open source software. Because of these factors, you can finally begin to argue in favor of open source software as a viable business choice in terms that business decision makers can understand. Just watch for opportunities and seize them.

TechRepublic originally published this article on 4 November 2003.

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