The costs of implementing open source

The cost of implementing open source

At last week's LinuxWorld Boston I moderated a panel entitled "The Real World of Open Source Application Implementations: Case Studies from the Front Line." Contrary to what Fabrizio says, it is precisely because of sessions like these that Linuxworld (the conference) and OSBC still matter. Everyone knows Linux, true, but not everyone knows what it (and other open source technologies) actually costs, how and where best to implement it, which business models have been successful in the market, etc. What is needed, rather, is more candid information exchange, not less. OSBC is an unparalleled place to house that sort of exchange.

But I digress....

In my session, we brought together two SIs (CorraTech and Optaros) and three IT buyers (Putnam Investments, Athena Health, and The Christian Science Monitor) to figure out if open source is actually the bargain that people like me regularly spout off about. (Btw, Seth has a good summary of the session.)

I asked the IT buyers how they find new technology they buy, open source or proprietary. Answer?

1. Talking with competitors/industry peers.
   
2. Web (News sites, Google, etc.)
   
3. Venture capitalists

The first and last sources surprised me a little. Geoffrey Moore talks about how references provide the "bridge" to get buyers over the chasm. I get it. But I was surprised by how pervasive inter-company communication is, based on the responses of the panelists.

It's clear that few want to be any technology's guinea pig. Hence, it becomes important for open source technologies, in particular, to establish visible customer credibility: case studies, press releases, Sourceforge download statistics, media mentions, etc.

As for venture capitalists, it makes sense that they'd be a trusted source: if they're willing to put down a few million on a company, surely they must believe in it. VCs also act as connectors to link together different IT buyers.

In the course of the session, I also asked both SIs and IT buyers whether open source was cheaper to implement, on the theory that source code access might facilitate development and integration. The answer? The cost of any implementation (at least, in CRM and ECM) is always 2-4x the license cost. The real value in open source is in how you spend the license cost savings: extra customization? More IT staff? Training? Documentation? etc. You choose.

Ultimately, then, you can choose whether you want to save money, or whether you'd like to invest those cost savings in achieving a tailored solution that is simply not possible in a proprietary world (at least, not without paying a massive premium).

Larry Augustin illustrated this well in his OSBC2004 presentation:




Where do you want to spend your money? You choose. Open source = more choice.