Total Cost of Ownership (TCO), which used to be the primary angle for justifying the use of open source software, continues to remain relevant even as open source emerges as a disruptive force in the software industry. The explosive growth of commercial open source has made it clear that this new force is something entirely different from 'just another type' of free software. A strong TCO analysis should take into consideration the unique characteristics of open source while steering clear of flawed generalizations about its nature.
Key arguments in favor of open source software
- Increased flexibility: Acquiring open source software enables the acquirers to tap into not only a software product but also the surrounding community & vendor ecosystem. Ownership is not limited to packaged binary and documentation, but is extended to the highly valuable knowledge and experiential capital that resides in these distributed communities. A great deal of which is naturally integrated into the quality of the offering, through the collaborative nature of its open development model.
- Ease of integration: Since software must always fit into a larger IT infrastructure, integration takes many varied forms. Integration at a technical/functional level involves connecting disparate applications and systems. The ultimate goal being to create and harmonize end-to-end, functional systems. However, as the growth of service oriented architecture approaches have shown, there are other levels of integration which can involve business process, policy and governance. So while open source undermines the possibility of vendor lock-in with added flexibility, it also can be tailored easily to overarching business goals and objectives.
- Better growth management: As the time following an acquisition passes, software becomes integrated into the fabric of that owning organization. Having access to source code, can help protect against external events, i.e. changes in support contracts, versioning differences, acquisitions or mergers involving a commercial entity responsible for a product, etc. Increased autonomy brought about through open technology is key to managing growth occurring around it and as a result of its presence.
- Support of open standards: Despite the fact that open source isn't synonymous with being standards based, such products have a sizeable incentive to assimilate open standards into their architectures. The value of doing so feeds into all of the aforementioned arguments as much as it eases the prospect of extending an IT portfolio. Regardless of whether that extension is a new addition or replacement for a pre-existing alternative.
Cost drivers in a TCO analysis
- Capital Expenses: Open source does just as much to eliminate the ongoing costs of software ownership as it does the initial capital expenses involved. Nonetheless, traditional capital acquisition expenditures can still be required. In many cases, the selection of an open source product is done within the context of a pre-meditated move towards open source offerings. In this case these initial capital expenses can be justified by greater savings to be realized going forward. In other cases upgrades to surrounding infrastructure might be required as a pre-requisite.
- Design and Deployment: The time & resource costs of research, design, integration, testing, tuning involved with a product launch are all reduced when dealing with open source. Depending on the asset in question, server and network capabilities must be reassessed and augmented. Hardware, operating systems and applications have to be evaluated for compatibility, if necessary. Yet the option of using select community versions before purchasing a commercial oriented product, will help diminish the required outlay. Even if a commercial version differs from the freely available community edition, the ability to flexibly evaluate proves to quite useful.
- Ongoing maintenance and infrastructure: Continuous ongoing operation, requires network monitoring and management tools capable of enabling real-time problem diagnosis and responsiveness. Periodic software maintenance and support contracts plus system upgrades all contribute to the total cost of ownership. Multiple redundant systems, and add-on feature sets can also increase cost. Since all types of ongoing expenditures are spread out over the lifetime of ownership, they must be considered in any competent TCO analysis.
- Operations and support: Support ranks as a critical success factor to the successful adoption and ongoing use of any software product: whether the product is aimed at end-users or used administration side, a steady diet of issues can lead to considerable losses in productivity. Commercial open source companies exist, in part, to ensure that different levels of support and indemnification are indeed available. What's more, since patches and/or upgrades will require additional IT resources more is being done (in the form of alert services, targeted information channels) by open source vendors to ensure this process is as seamless as possible.
The TCO Calculator -- typical comparison matrix cost variables
- Software licensing
- Required hardware
- Upgrades/patches
- Support
- Integration/implementation
- Administration
- Scheduled and unscheduled maintenance
- Monitoring and security
- Legal
- Reliability
- Security
- Capacity
- Extensibility
- Interoperability
- Performance
- Opportunity costs
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