Organizations have three major choices for acquiring applications and operating systems:

• Commercial developers
• Proprietary in-house development and contract development
• Open Source applications and databases

COMMERCIAL DEVELOPERS

Commercial developers include compatibility testing and version validation in the price of their products. Thus a specific enterprise solution provider, such as SAP or PeopleSoft, will perform extensive testing to validate that their application is compatible with specific database and operating system configurations. This service provides the acquiring enterprise with confidence that its specific configuration of operating system, database and application will integrate successfully. This is an intense and demanding process and is a prime driver for the high costs of commercial applications and systems.

PROPRIETARY IN-HOUSE DEVELOPMENT AND CONTRACT DEVELOPMENT

In-house or self-financed application development is costly and time consuming. Most organizations limit this development to a few areas with unusual requirements or significant opportunities for competitive advantage. Most in-house development is focused on customizing commercial enterprise applications to meet unique needs. Only the very largest organizations have the depth to economically support the development of core applications independently.

OPEN SOURCE

This analysis considers the Open Source option.

Open Source refers to operating systems and applications developed by a global community working under the Open Source or GNU General Public License agreement since 1984. This provides the foundation agreement for development of Open Source operating systems and applications. Open Source software is distributed without a fee and can be used by anyone who agrees to the license and commits to contribute to the ongoing development and testing of that software. 

Universities, government facilities, commercial research and development and corporations support Open Source. By dedicating staff to Open Source, each organization gains access to the very best software at a small fraction of the cost of acquiring similar capabilities through a commercial developer. There are also software products in Open Source that incorporate proprietary layers, such as Mac OS X.

Open source projects cover all aspects of software development from handheld operating systems to enterprise operating systems, a variety of databases with most of the capabilities of the major commercial databases and just about every type of application, from basic office and administrative applications to the most advanced modeling and analysis applications used in supercomputing.

Since there is no fee for Open Source, there might be an expectation that the software is "free." But this is not true. There are two explicit requirements to gain competent and timely access to Open Source software:

• The acquiring organization assumes full responsibility for testing, deployment and maintenance.
• The acquiring organization commits a visible and active presence to the Open Source community to receive complete, prompt and accurate information about the software.

The key to success with Open Source is committing a team of competent Open Source specialists to the Open Source process and the Open Source community. The strength of the Open Source movement depends on the active contribution and participation of tens of thousands of individuals working together cooperatively to constantly improve the Open Source environment (applications and operating systems). These commitments are usually much less costly than acquiring the equivalent commercial software. However, they are still substantial.

There are two major benefits to an enterprise for joining the Open Source community:

• Open source solutions are usually substantially less costly
• The most powerful and competitively significant new applications first become available through Open Source and then later migrate to commercial release. Members of the Open Source community thus gain competitive advantage through early deployment of new and improved solutions.

RISKS AND COMPLEXITIES OF OPEN SOURCE

A key requirement for the Open Source enterprise is to acknowledge explicitly that they are assuming the risks associated with Open Source. There are no backups, no fall back, no third party providers to hold responsible. While Open Source is very secure and quite reliable with extensive testing and documentation there are no guarantees. It is caveat emptor. You assume responsibility for your own environment.

There are many general reference documents and resources on the use of Open Source operating systems and applications, but no recipe books or canned procedures are offered for success. The Open Source team is responsible for identifying available resources and determining if they are appropriate and can be adopted. The Open Source team must commit substantial time to organizing, documenting and developing the procedures required in the Open Source environment. This is more demanding than in a commercial environment where these procedures are often delivered as part of the purchase price of the software.

There is no single validating center for the Open Source environment. There is no final arbiter to rule on versions, integration requirements, bugs, security or performance. However, all of the information required to manage versions, testing and deployment is readily available to a skilled Open Source team. The Open Source team is directly responsible for using this information to assure that the applications are current and are well tested for integration, security and reliability. 

If an Open Source team is partnered with a mature commercial oriented computing environment, there is likely to be substantial misunderstanding and conflict unless the differences between Open Source and commercial software management requirements are explicit and above board. The Open Source team will have a different culture, a different attitude and a different process than technical support teams for commercial products. It is possible that the Open Source team will be more educated, more personally assertive, more creative, more intuitive, and more adventuresome, with fewer certifications and less commitment to specific technical products. Blending these two teams into a single team will be a significant management challenge, especially if the logical outcome of the process is the replacement of much of the commercial environment with Open Source solutions.

DUAL COST-CUTTING STRATEGY:

There are two distinct strategies for pursuing an organizational Unix environment.

1. All Unix using commercially available Unix based systems from desktop to enterprise.
2. Open Source using all Open Source operating systems and applications from desktop to enterprise.

Commercial All Unix from Desktop to Enterprise

Most of the deployed systems are commercial and use hardware and software supplied by major developers and manufacturers. Savings from this approach come primarily from simplifying the environment and thereby eliminating that part of the infrastructure required to integrate and support multiple platforms. Savings of 25% to 40% should be achievable using the commercial all Unix strategy.

Open Source All Unix from Desktop to Enterprise

A far more aggressive strategy uses Open Source operating systems and applications wherever possible in an all Unix environment. Savings on licensing fees and hardware purchases can approach 90%.

The distinction between commercial all Unix and Open Source all Unix is not on systems deployed but on the primary focus of the effort. The commercial all Unix approach uses commercial products with some use of Open Source where appropriate. The Open Source all Unix approach uses Open Source wherever possible and uses commercial products only as minimally necessary.

Combining Unix and Open Source

The most likely strategy is a blend of commercial all Unix and Open Source all Unix with initial efforts focused primarily on the integration of commercial enterprise and commercial desktop Unix systems. As the environment becomes more stable and as experience and confidence improves there can then be a shift toward more Open Source solutions.

COST SAVINGS WITH UNIX & OPEN SOURCE

Except for a few well-defined tools (such as the Linux based Network Attached Storage Servers), effective deployment of Open Source solutions requires significant knowledge of the Open Source environment and its applications and operating systems development and deployment process. When using Open Source solutions the acquiring enterprise is assuming all of the risks of deployment plus staffing responsibility for version control, integration testing and application compatibility. This means hiring and supporting an Open Source development and deployment team and providing that team with a mature test and deployment environment.

Using this approach it is possible for an organization to competently replace millions of dollars of commercial systems, databases and applications with thousands of dollars worth of Open Source products. However, competency also demands that additional staff be hired and that additional equipment be made available to this new Open Source management group. The result is the displacement of very high outside commercial costs with lower but still significant internal Open Source management costs. A management judgment needs to evaluate the trade off among these savings, costs and risks.

MAKING THE DECISION

There is no clear path to determine the best choice. One key driver is competitive advantage gained by the significant cost reductions associated with Open Source applications, assuming that these applications successfully supplant commercial applications. This decision requires the balancing of service, cost and risk and an assessment of the organization’s ability to assume the higher risks and staff commitments and competency required for success with Open Source solutions.

One sequential approach is to commit first to the Unix based desktop environment while continuing with commercial enterprise solutions. This first stage establishes the all Unix environment and gains the associated savings and efficiencies. The second stage would be to consider work group, network and Internet Open Source solutions. These tend to be both more broadly deployed and less complex. Success with maximizing Open Source use at this level would build the competency of the Open Source team. The final stage would be to evaluate enterprise requirements to see where committing to Open Source solutions could significantly reduce costs. This process would probably take three years from the initial commitment to the all Unix environment.

Successful implementation of this strategy could realistically see information technology costs reduced by 50% over three years while also improving security, reliability, performance and user deliverables. The key decision is whether or not savings of this magnitude are significant and worth pursuing in light of the other strategic challenges facing the organization.