David Sudjiman

The new revolution of software implementation has begun. After some decades when the world was offered by proprietary software produced by Microsoft, nowadays another approach is coming and unstoppable. This new revolution offers shareable software source code and available freely from the Internet. It means that user can now has a freedom to update and distribute the software as the freely as possible.

Albeit the software can be downloaded freely from the Internet, some company encapsulate this software with enterprise support and service. To name a few are Red Hat and SuSE. Both are the biggest open source company which sell open source software bundled with professionalism. This is what the business users have been waiting for, open source software with enterprise support and service.

The dilemma of the cost for IT project implementation has been a dog-and-cat fight. Many advocacy papers rise to defend either Open Source movement or proprietary software.

The Open Source (OS) movement is starting to get more appreciation from business practitioners. This market is steadily growing and looks promising to start a new business field using OSS/FS as market commodity or at least business practitioners can take the advantage of OSS/FS to overcome its shoestring budget. OSS/FS is known by its low TCO for implementation and maintenance. This research paper will try to describe with appropriate evidence how it is possible OSS/FS to reduce TCO compared proprietary software.

Overview

The OSS/FS paradigm is still a brand new world for business experts. A lot of questions are asked, requiring more advocacies to provide proof-of-evidence ‘why is it better to use OSS/FS?’ Still, the existence of Redhat and SuSE as two major GNU/Linux enterprise companies cannot win the heart of CEO/managers easily to use OSS/FS to enhance their productivity.

OSS/FS does not come with its perfection so everybody will use it with no question asked. As a new wave to IT architecture, OSS/FS still has some doubt in the eye of IT implementers. However, it does not mean that OSS/FS is hiding its disadvantages, it is just not enough documentation or papers presenting OSS/FSS from business point of view that often mislead the facts to start to use OSS/FS.

OSS/FS is like a religion and the myths are also growing. Debates between OSS/FSS and proprietary software are still on the ground. Comparing to proprietary software that has been exist longer than OSS/FS-supportive companies, proprietary software has already know the battle-ground to approach the customers. The obvious fact is that the information generation is already tightly related with proprietary software. Students have been learning computer using proprietary software which creating a mindset that software is always proprietary. OSS/FS then comes as the new saviour that shows a completely new paradigm.

OSS/FS is currently growing. It is taking the place of proprietary software that has been throned for years. Surveys are now giving more appreciation to OSS/FS by showing the facts that OSS/FSS is taking the market share.

This growing-up market share is steadily grab a bigger share market for web server (Netcraft 2004). Based on the survey run by Netcraft (2004), the OSS/FS web server application (Apache) is use by more than 65% web server in the world (Netcraft 2004). The other survey for DNS server also shows a promising result that 85% of DNS software is running OSS/FS software (Moore 2004).

One of the biggest database companies in the world, Oracle, has shown its commitment to support GNU/Linux (Oracle 2004). The article also shown that Oracle has 69% its market share on GNU/Linux and the annual growth rate is 360% (Oracle 2004). IBM, the old classic big blue, is also trying to grab the new market share by providing OSS/FS solutions (IBM 2004).

The list is growing for name of the companies that starting to ride the wave of the OSS/FS movement. This is also can be considered as an indication that OSS/FS is promising.
What is the main reason that drives the aforementioned companies pay more attention to GNU/Linux? Is it because of the security, support, documentation, human resources, or cost?

From business point of view, the reason might be more obvious as the economy motive is always about the money. How to get more advantages using the smallest efforts?

People are always trying to ‘measure of the value of a product which factors in maintenance expenses as well as purchase price’ (IET 2004) to get the most of the product when it is implemented.

Limitation

This research will present the comparison of OSS/FS TCO using particular parameter such as cost of Software only. Albeit the TCO cannot be determined only by the cost of purchasing yet other several parameters should be involved such as maintenance, ROI, and human resources and training.

For the hardware, assume that the hardware for such IT project is the same for either OSS/FS or Microsoft product, the same hardware can be used for both product, and the cost is assumed the same.

Comparison

This paper will trying to compare the Red Hat Enterprise Linux ES with Provisioning module (RHEL-ES-PM) product as the OSS/FS with Microsoft Small Business Server (MS-SBS 2003) for the implementation of a small business with 10-20 PCs and 1 server.

Microsoft

According to Microsoft website, this MS-SBS 2003 is a packet of software that suitable enough for small business that has 5-20 PC (Microsoft 2004). The MS-SBS 2003 Premium Edition (MS-SBS PE) is equipped with Windows Server 2003 technologies, Windows Share Point Services, Exchange Server 2003 technologies, Microsoft Office Outlook 2003, RRAS technologies with ISA Server 2000 technologies, SQL Server 2000, and Microsoft Office Outlook 2003 (Microsoft 2004).
The server software, the purchasing details as follow (Microsoft 2004):

Product	Price
MS-SBS PE (5 client licenses)	1,947.00 USD
Additional 15 clients licenses (@ 690 USD)	2,070.00 USD
TOTAL	4,017.00 USD

For the Clients software, purchasing still have to be made. Below are the details (Microsoft 2004):

Product	Price
Windows XP Professional (20 clients @ 299 USD)	5,980.00 USD
Microsoft Office Standard Edition 2003 (20 clients @ 399 USD)	7,980.00 USD
TOTAL	13,960.00 USD

For total software purchasing, server software with 20 clients licensing, 20 clients Windows XP Professional, and 20 clients Microsoft Office Standard Edition 2003, the cost is 17,977.00 USD.

OSS/FS (Red Hat)

Using the equivalent server software, the equal comparison for MS-SBS 2003 is Red Hat Enterprise Linux ES with Provisioning module (RHEL-ES-PM). The price of this server software is 991.00 USD with unlimited client licenses (Red Hat 2004). For the client software, Red Hat offer Red Hat Enterprise Linux WS with Provisioning module (RHEL-WS-PM) for 491 USD each (Red Hat 2004). Total of this initial purchase is below:

Product	Price
RHEL-ES-PM with unlimited client access	991.00 USD
RHEL-WS-PM for 20 clients (@491 USD)	9820 USD
TOTAL	9820 USD

Both RHEL-ES-PM and RHEL-WS-PM is equipped with similar software as Microsoft offers on the server software and client software (Red Hat 2004).

Soft Cost

The term soft cost can be known as hidden cost that company should pay on the way to make use the IT system. For example, based on Wheeler (2004) study, OSS/FS avoid the chance to face the litigation process for licensing problem and many more proprietary software will do. For the licensing is implemented, the company should put more effort on managing licensing and it means the company should pay for another cost (Wheeler 2004).

Insurance

Insurance company will take advantage for this competition by getting more money from the customer if they are using Microsoft product. This is said by J.S. Wurzler (2001, cited in Luening 2001) that his insurance company will ask 5% to 15% more from the client if they use Microsot product.

This insurance cost will reduce the Company expenses if the company uses OSS/FS. Now, even the insurance company knows that OSS/FS is less vulnerable than Microsoft.

Performance

Netcraft (2004) provide evidence that in the August 2004, the most high performance servers is dominantly by OSS/FS. This can be translated that OSS/FS has high performance for its server. Having a high performance server can reduce the cost of money lost if the Company doing Internet transaction.

With this evidence, Company can have a proof that using OSS/FS will reduce the downtime and will reduce the cost such as troubleshooting, lost, and customer loyalty.

Virus Infection

Recent study by network management Sandvine (2004, cited in Leyden 2004) says that 80% of spam or virus infection comes from a PC that is infected by Trojaned PC. These are from Migmaf and SoBig variant; note that this viruses are from Windows based PC.

Security

U.S. Department of Homeland Security’s Computer Emergency Readiness Team (CERT) (2004) recommens that people should replace their Internet Explorer for security reason as Microsoft has failed to fix its security issue in the last 9 months.

Spyware

Recent study by National Cyber Security Alliance’s study (May 2003) said that 91 percent of home computer connected to internet using broadband are infected with spyware. This is a suprisingly research that OSS/FSS has no spyware inside the software.

OSS/FS Can Use Older Hardware

According the study by Wheeler (2004), OSS/FS is able to be installed in older machine than Windows 2000 or Windows XP. Even 386 or 486 for special purpose like router can make use of GNU/Linux but not Windows 2000 or Windows XP.

Conclusion

From the above initial purchase of software, Microsoft offer the 20 clients software packages with 13,960.00 USD and Red Hat offers with 10,811.00 USD. This means that Red Hat product provides less cost than Microsoft product. This cost difference can be much more differs, almost zero, if using another OSS/FS that is not backed-up by company, Debian for example. Because most of the implementation of proprietary IT system (Microsoft) are likely expensive, people should migrate to OSS/FS to reduce the cost of operation.

Regardless to say, to close this article, Steve Balmer (Microsoft CEO) (2002, cited in Cirillo, 2002) said that Microsoft could not compete with the price offered by OSS/FS solution. Now, if the Microsoft itself admit this, where would we stand?

Reference

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