Cost, Speed, Agility: The Open Source Business Advantage

Do you enjoy paying recurring license fees? Like being locked into a vendor’s solution? Have fun wasting time as your team works around bugs and limitations? Find yourself happy when two of the fifty features you suggested are adopted and scheduled for release in six months? Then I suggest that you continue with your proprietary software solution (and good luck with that). Otherwise, you might want to consider an open source approach.

With well over thirteen years of experience thriving with open source business practices, realizing sustained growth rates of over 30% the last few years at our company, and seeing formerly conservative organizations such as the DoD advocate for OS, it’s clear that the value open source software and process offers business is no longer an idealistic concept, but rather a formidable, pragmatic business advantage, and soon to be best practice. While the benefits are legion, I think open source offers three major advantages that businesses can leverage to improve their workflow, increase productivity, and innovate more effectively: cost, speed and agility.

Cost: Many people believe that the primary cost saver is that OS software is “free”. For example, one of my family members works for a large consulting firm developing custom database/enterprise solutions using proprietary software. These solutions can cost upwards of $20 million, with approximately $5 million of that being license fees. In an open source approach, the license costs would disappear, but the $15 million in customization and deployment costs would not. So OS is not free, but cheaper.

However there are many less obvious costs that OS addresses. When you buy into a proprietary solution, typically you’ve bought into recurring licensing costs, as well as the provider of the proprietary solution. What happens when the provider goes out of business, changes priorities, or becomes unresponsive? In an open source world, if you don’t like the vendor, take your code somewhere else, and never pay recurring fees.

Proprietary approaches also introduce the costs related to IP. I’ve seen companies negotiate for years in order to straighten out this mess. Further, companies may develop a kick-butt solution based on proprietary code, and then end up hamstrung because they cannot deploy the solution easily and widely throughout their enterprise due to IP barriers, or licensing costs. These delays starting and deploying solutions are extremely costly, and open source goes a long way to minimizing them.

Speed: The business world is full of articles and books which describe the benefits of execution speed. One of my favorites (the title is just great) is “It’s Not the Big That Eat the Small…It’s the Fast That Eat the Slow“. What open source provides here is a starting point of abundant, tested and proven resources, and agile processes that deliver quality software quickly. For example, one of our research collaborators, NA-MIC, periodically accounts for the value of the open source software it uses by referring to ohloh.net. If you believe the numbers, the NA-MIC community has in hand over $130 million in software value, with over 4.7 million lines of code. A great starting point for developing (in this case) a custom biomedical application or when integrating technology into a company’s workflow. Further, article after article describes the advantages of open, agile processes (e.g., [1], [2], [3]). Hence open source systems move from concept to practice much more quickly than closed systems.

Agility: Software is never done. It is a manifestation of enterprise workflow, technology, and business need, all of which are changing rapidly. Thus you’ve got to expect your software to change rapidly too. Proprietary solutions often release slowly, or if they release quickly, force their customers to follow their release and feature cycle. In open source, if you need a feature quickly, your own team (or a technology integration firm like Kitware) can extend the software, and even push changes back into the code base so that it is available immediately. And don’t forget the agile processes mentioned previously, change happens fast and is natural to the OS world.

In my experience open source approaches simply run circles around proprietary software solutions; sort of like watching a cheetah race a tortoise. However these reptiles are still formidable, after all many are very large with decades of growth behind them, have established market share (and take advantage of vendor lock-in), and are often well run organizations. But the business world has changed: cost, speed and agility are driving the future survival of many firms, and are the key ingredients for future innovations in productivity, service and solutions.

It’s just a matter of time before open source business practices are the only way to go.

Questions or comments are always welcome!