The Wrong Reason To Choose Open Source
I see it time and time again in comparisons of software products where one or more of the options is open source. Someone chimes in with a comment along the lines of:
Why pay for product X when I can get open source Y for free?
My response to this is simple: X != Y. Price is a very primitive way to choose software. Differences in price, even when one price is zero, are often insignificant when compared to other factors. Unfortunately, these other factors aren’t so easily boiled down to a single number, so the lazy consumer does not pay them full heed.
If we could boil the other factors down to a single number, what would it look like? Well, allow me to present a gross simplification. Suppose you are a company comparing two tools: one open source, and a commercial alternative that costs $500/seat/year. The end goal of the both tools is to make the user more productive, i.e. to save them time. For argument’s sake, say the average user’s time costs the company $100,000/year. For the commercial software to be worth the cost, it needs to improve the user’s productivity (relative to the open source tool) by about 0.5% over all. Put another way, it needs to save the user around 12 minutes each week. This is a small ask, particularly if the tool is something the user relies on heavily to get their job done.
Sure, these numbers are pulled out of the air, but they are not that far removed from reality. Skilled workers can easily cost more than $100,000/year, and a heck of a lot of software is priced under $500/seat/year. The real point is that an increase in productivity is far more important than saving on licensing costs (except perhaps for software priced “by the enterprise, for the enterprise”).
There is also a sad flip side to this: open source has a whole lot more going for it than the price. Factors such as transparency, community and extensibility are usually far more important than saving a few dollars up front. Not to mention the fact that the most productive tool for you may be an open source alternative. By no means am I saying to avoid open source. But do yourself a favour: put in a bit more effort and make your choices for the right reasons.
September 22nd, 2007 at 7:13 am
Your analysis is faulty for the following reasons:
1. You don’t take into consideration the Marginal return:
“What is the difference in productivity between the free/oss version and the $500/seat/year?”
2. You don’t take into consideration the Opportunity cost
If you need 15 different tools/solutions to support developers, which ones should be purchased and which should be opensource?
3. You don’t take into consideration the Investment/ROI question
As you likely know, in SMBs, cash is KING, you’re making the assumption that the BEST place to invest your cash is in a development tool. VERY narrow minded approach.
September 22nd, 2007 at 10:22 am
Hi Mike,
Thanks for the comment, but I don’t follow:
“1) 1. You don’t take into consideration the Marginal return:
“What is the difference in productivity between the free/oss version and the $500/seat/year?””
That is why I said “(relative to the open source tool)” when discussing an increase in productivity. I take the point that I could have made this more clear.
“2. You don’t take into consideration the Opportunity cost
If you need 15 different tools/solutions to support developers, which ones should be purchased and which should be opensource?”
My argument is that the tool does not cost anything: it breaks even or saves you money. If there are 15 tools that all save you money, buy them all. There is one caveat: this means an employee now costs you $100,000 + (cost of 15 tools)/year, so you can’t necessarily afford to suddenly start buying every new tool without considering your overall budget. But you are still better off buying them all and having less employees, or indeed increasing your budget when you have the cash. If you plan for these costs then you can work to the same budget but be more productive.
“3. You don’t take into consideration the Investment/ROI question
As you likely know, in SMBs, cash is KING, you’re making the assumption that the BEST place to invest your cash is in a development tool. VERY narrow minded approach.”
Now you have really lost me. My analysis is precisely about calculating the relative return for the tool to see if it is worth the additional investment. I do understand that not all companies have the cash on hand to spend, but I would say if you can afford an employee then you should plan to pay for the tools needed for them to be productive. If you think you can get better return for your money elsewhere then why are you hiring the employee?
September 22nd, 2007 at 6:14 pm
Mostly, I agree with your post. I’ve already said in the past (see http://digifreedom.net/node/56 and http://digifreedom.net/node/57) that promoting Free/Open Source Software only because it is gratis and “you can see and modify the source code” makes no sense anymore in an age when 95% of computer users couldn’t care less of programming and are HAPPY to never see what’s going under the hood.
So, you’re absolutely right when you say “use FOSS for the _right_ reasons, please.
In this context, however, it is also essential to point out the issue of document ownership, that is avoiding like the plague proprietary file formats.
So that everybody, individual or business, remains free to change software at any moment or negotiate better price or service from the provider of that software (see “Everybody’s Guide to OpenDocument” http://www.linuxjournal.com/node/8616 or “Just say no to OpenXML” http://www.linuxjournal.com/article/9594#mpart7 ) to see what I mean.
Thanks,
Marco Fioretti
September 22nd, 2007 at 9:51 pm
I get a kick out of these articles.
What about saving Hardware that can be saved with Linux, opensourse?
Let’s step back a bit. Huh?
Adler
September 23rd, 2007 at 2:06 am
Free software should be chosen because it gives users the freedom to form a cooperative community. Some individuals in that community may program and help their community, some may not.
Saving money should be seen as a fortunate benefit that may or may not be. If you save, great. If not, it shouldn’t matter at all.
JJMacey says:
“What about saving Hardware that can be saved with Linux, opensourse?”
I’m sorry, but I don’t understand. Could you please restate the question?
September 23rd, 2007 at 3:12 am
Spot on.
This article got me thinking of a study I saw around a year ago, listing the top 3 productivity inhibitors in the IT workplace to bugs, security barriers and issues, and performance.
Someone got a reference for this?
By comparison, we’ve got an arcane subscription management system at my workplace. It runs server-side on some OLD unix-variant, clients are text-mode-terminals to that server, and it requires the user to learn a completely horrific set of key-combos to operate the system. However, the end result is snappy, stable and works REALLY well, once you’ve learned to use it. The point is, a system doesn’t have to be beautiful, it doesn’t have to be high-resolution, or mind-numbingly obvious to the first-time user, to enable productivity.
Something to think about in these days, when every user seems to need 3d-accelerated desktops to feel comfortable.
September 25th, 2007 at 7:13 am
As this post by “Graygeek” shows [ http://www.linuxtoday.com/news_story.php3?ltsn=2007-09-22-004-26-OP-SW-0003 ], if we are talking about a typical productivity worker (less than 50K/yr), your numbers are at least 1 order of magnitude off (salary figure + cost figure). To accept your 12 minutes per week under your set of assumptions, this would become 2 hours per week. At this point it starts to become a little difficult (or a lot) to get a better ROI by going with proprietary on Windows.
Were you factoring downtime productivity costs, which is greater for Windows?
Were you factoring that a Linux admin typically can handle 2 to 10 times (sometimes more if the setup is very network friendly with thin clients) more machines than can a Windows admin? Keeping your workforce constant, this would mean that the Linux savvy admins would have time to grow and toughen the business IT. Perhaps they might even opt to work less hours (leading to immediate yearly savings).
I would say that the article suggests that the company should keep some Windows around for strategic reasons (for key workers), but otherwise, you are likely pouring money and competitive edge down the tube by not moving your main business over to FOSS (on Linux platform, in particular).
Something else to consider is that on average Microsoft software costs keep going up while FOSS costs are hovering at about an even $0. Even more noticeable is that FOSS quality and usability is improving at a quicker pace than for Microsoft software. All of these factors affect ROI. Do ROI calculations factor in these expected increased costs in licensing, hardware, etc, and relative productivity losses? How long will the business be able to bear the pain?
Have the inevitable costs to migrate from Microsoft’s proprietary file formats been considered (yes, inevitable)?
Have the losses to the business in the marketplace for not being able to move quickly enough and have to deal with loss of timely access to key documents been factored in? Clearly the rest of the market will not stop and wait for the slow-moving businesses to catch up.
Will the company go out of business should Microsoft fail and with it all servers and PC’s that depend on Microsoft servers staying up in order to function properly?
The small advantages Microsoft enjoys in some TCO studies depend on you being completely tied to Microsoft. This is a very precarious situation indeed. What is surprising to me is that, despite this huge Microsoft created liability that must be paid off in order to move off Windows, the Linux TCO (as per this type of study) is almost always still competitive, sometimes actually coming out ahead. [Also, keep in mind that this cost is a one-time cost; it must be born once, but only once. Competitors that pay this off today become nimble and free and clear; TCO studies for them from that point forward will give FOSS an excellent grade, no matter how the math is done.]
For those that haven’t been paying attention, a growing and significant number of major players in IT (hardware, software, and consultants) have been moving their allegiance over to the side of open source, and this trend is not only continuing but possibly speeding up.
How many more days can most businesses afford to go without a proven plan to move key portions (or all) of the business away from Microsoft dependence?
Businesses that don’t get down with Linux will go down with Microsoft.