OPEN SOURCE SOFTWARE What are reasons for business to use open source software?

With the current economy difficulties, companies are trying to find areas in their businesses where they can save money. Many companies are having no choice but to let people go. Some businesses try to avoid lay-offs and instead are looking in other areas to save money. One of the areas is, of course, the IT department; software application acquisition is an area that might lead to a big money savings. Even in financially difficulties times, businesses want or need to improve their application environment. Sometimes it might even be necessary to invest in the IT infrastructure for long-term savings, which may result in the company not needing to close their doors. But many business owners or CEO’s will question if open source software is ready for business. This research paper intends to answer this question. The best reason to use open source software in a business environment is cost savings. This gives the business freedom to use software and change the source code in other words, modify how the software application is used, as it is needed. Open source removes the need for dependence on single vendor solutions and it provides very high quality applications and very good support.
To understand open source software it is important to know what open source is, and what the meaning of open source software is. This research paper will also show where open source came from; the history of open source software. In the beginning software programmers and hardware manufactures exchanged the source code to give everyone the chance to improve the code and build up on it.
In the mid 1980’s Richard Stallman started the Free Software Foundation, an organization that developed the “GNU's Not Unix” (GNU) system, an operation system that is compatible with the UNIX system. At this time Stallman licensed all his software under the GNU General Public License, a license model invented by him to allow the free use of his software (Matthew Barr, n.a.). In 1991, Linus Torvalds, a student of the University of Helsinki, started to program the kernel of the Linux system, and he licensed Linux through the GNU later on. In the mid 90’s Stallman adopted the Linux kernel and called his operation system GNU/Linux.
But what does open source really mean? The name itself already answers one question, that the source code is open. Open source does not mean only that the source code is open available. Open source software must comply ten criterion that are defined through the Open Source Initiative. The most important criterion is the free redistribution of the software. Any software that is licensed under GNU needs to be free of charge. “The license shall not require a royalty or other fee for such sale” (OSI, n.a.). Also very important is the fact that the license must allow the change of the source code, and give the right to distribute the software under the same license as the original software. One other criterion is that the open source software can not restrict other software.
Proprietary software is well known to apply to common business models. In order to see if open source software is able to apply to the business model as well, we need to compare both software models. This research paper will compare the two different business models with three important criteria’s. These criteria’s are the important for any decision maker in a company.
The cost of a new application or operation system (OS) is a very important factor to consider. A recent MS Windows 7 licenses cost approximately $200 (Microsoft, 2010). The cost of a Linux distribution is $0. You can download a recent OS from different distributers like SuSE, Ubuntu, Debian or RedHat, just to mention a few. Another source to save money is the hardware requirements for each OS. A recent Linux OS requires much lower computer specifications, such as memory and processor, compared to the newest Windows 7 OS. For example, the Ubuntu OS requires only a 700 MHz processor and 386 MB of memory (RAM) (Ubnutu, 2010). Windows 7 requires a minimum of 1 GHz processor and 1GB of RAM (Microsoft, 2010). These are just a few example on how open source could save money, but to understand how businesses are able to save money we need to understand the total cost of ownership (TCO). How is TCO defined? Netc.org describes TCO on their website in a very understandable way, “The total price in money, time, and resources of owning and using software. TCO is widely considered to include the purchase price, and the cost of hardware and software upgrades, maintenance and technical support, and training. TCO is an essential part of technology decision making since a product may be cheap or free to get, but involve excessive maintenance or training. TCO is not unique to computers. For example, the TCO for commercial jets is measured in cost per mile. This calculation includes the sale price of the plane, the cost of fuel and other expendables, maintenance and repairs, etc.” (Netc.org, n.a.). All these factors together make it clear that the TCO for open source software is lower. There is no license cost and the cost for hardware is most likely lower because of less hardware requirements. Details about service and support will be discussed later in this article, but it is important to know that there is support available for open source. A free service through a community that is available via a forum or other message boards. Some distributers implemented a bug tracker website. Through this website everyone is able to post a bug that is found in the software.
The second factor is the security of open source software. Recently, the access to the internet through a company network and the extensive use of email communication makes the protection of the client’s information and servers increasingly important. A virus can be easily spread through an email and a Trojan can be loaded onto an OS just by visiting a website. Microsoft Windows systems are very vulnerable to attacks from viruses, Trojan or malware. To protect a Windows client or server, businesses need to invest in protection software like McAfee or Norton Antivirus applications. Linux OS are almost never vulnerable to viruses, Trojans or malware. The reason for this lies in the permission and access control of Linux systems. In order to install a virus onto a Linux system the application needs to gain administrator, or root rights. Many companies are even using Linux as their firewall system. “A standard tactic on many networks is to employ a secure Linux box as a firewall, intercepting intruders before they hit the network, and Security Enhanced Linux (SeLinux), developed by the US National Security Administration (NSA), is a component of many Linux systems.” (Hillesley, 2009).
Quality and support is the third criteria. Many people in businesses believe that because something is free the product has an impure quality or bad to no support. In any open source company there are different support and service modules available. One option is to hire the development company for the installation, or accept a paid service contract for future maintenance and upgrades. There is also free support available through a community forum that connects too many developers or users around the globe. All these people are usually happy to help to solve problems that may arise. A company that produces software for free relies on its income to come from providing an outstanding support system and a high quality of service, for a fee. “A company such as JBoss, now a subsidiary of Red Hat, has been able to generate revenue without compromising its principles, and has proved that subscription, installation, training, support, upgrades and maintenance can provide realistic opportunities for creating income streams for a product that is at least the equal of, and arguably superior to, many of its rivals.” (Hillesley, 2009).
At this point it is already clear that open source can be used in a business environment. But what kinds of software are available? First, this research paper will give an overview about the different OS’s that are available and in the second part it will introduce some software applications. There will be only two kinds of business management applications introduced, Customer Relationship Management (CRM) and Enterprise Resource Planning (ERP). There are more applications with different purposes and flavors available, but CRM and ERP have much higher importance for business compared to the others. At the end an example shows how a business successfully implemented open source.
There are many different Linux distributions available. The most well known are RedHat, SuSE, Ubuntu and Debian. Redhat was founded in 1993 and is the leader and most recognized open source brand in enterprise Linux in the world. RedHat solutions include the the RedHat Enterprise Linux, virtualizations software, JBoss middleware solutions and many other services and management solutions. SuSE is a Linux OS provided from Novell. Novell provides a broad range of products, from server solutions to end-user computing. Behind Debian does not stand a company. Debian is an collaboration of many individuals that work together to provide a free operating system. The target of Debian is to provide an operating system that is completely build from free software. Ubuntu is another example of a very successful Linux distribution. Ubuntu started in the year 2004; 11 years later than RedHat, but Ubuntu grew in those few years to one of the most well-known Linux OS in the world. It quickly gained popularity around the whole world. The company Canonical, who stands behind the Ubuntu project, provides the OS for free and only charges for service and support. FreeBSD founded over 15 years ago is an offspring of UNIX. Like the different Linux distribution mentioned before, FreeBSD distribution is provided for free through the FreeBSD Foundation. The same foundation is responsible for development and the OS support is provided through a huge community.
Another layer of open source software is the infrastructure layer, which is dominated by Microsoft. With MS Active Directory it is the leader in authentication and file sharing throughout a network. LikeWise is trying to step into that domain. LikeWise integrates Active Directory authentication across multiple computing platforms. LikeWise Open integrates authentication across Linux, Unix and Mac environments, while the enterprise version adds migration, group policy, auditing and reporting modules (Fontana, 2009).
Besides operation systems and the infrastructure software, another open source area is the software applications area. Software applications are taking a tremendous part in the open source environment. You can find many different solutions, from small tools that help administer a web server to fully functional CRM systems for customer relationship management. “SugarCRM is the world's leading provider of open source CRM software. Over 6,000 customers and more than half a million users rely on SugarCRM to execute marketing programs, grow sales, retain customers and create custom business applications.” (SugarCRM, 2009). VTiger is another CRM solution. Vtiger CRM is completely controlled, developed and supported through the Vtiger community. Even that is solely community driven, it has gained popularity in the past. ERP, or Enterprise Resource Planning, software is another important business application. There are many well known ERP solutions available like SAP or MAS, but they are all very expensive. Openbravo, OFBiz and Compiere are only 3 of many open source ERP applications available today. Those three are the leading ERP solutions. The strength of Compiere is that it is easily integrated with SugarCRM. OFBiz is well known through the Apache Software Foundation as the leader in web server applications. With Openbravo, a business gains the ability to grow with their software. Openbravo is designed to help the small and midsized companies, as well the bigger businesses. Openbravo also has a point of sales module, which could be easily integrated with the ERP application module.
Operating systems and various business applications are important. But this is all theory. There are many reasons why open source is ready for business of any size, but how does it look in real life? Does it really work in a business environment? In an interview with Sterling Ball, the CEO of Ernie Ball, the world’s leading maker of guitar strings, answers questions about their transition from proprietary software to open source software. On the client side they are using RedHat as the OS, OpenOffice as the word processor and spreadsheet applications, Mozilla as the web browser and Evolution as the email client. He mentions that he does not need to call on the support from RedHat. In relation to the question of how has the transition has gone, he answers: “It's the funniest thing--we're using it for e-mail client/server, spreadsheets and word processing. It's like working in Windows. One of the analysts said it costs $1,250 per person to change over to open source. It wasn't anywhere near that for us.” And furthermore he says: “I'm not paying any per-seat license. I'm not buying any new computers. When we need something, we have white box systems we put together ourselves. It doesn't need to be much of a system for most of what we do.” (David Becker, 2003).
Open Source software has a long history and surprisingly the history shows that the proprietary software has the same roots as the open source software. It is also clear that open source does not necessarily mean access to the source code. There are quite a few criterions to fulfill. Compared to proprietary software, open source software shows that it will stand up to proprietary software. Open source software will save money and this is a major advantage. Any reasonable business owner or CEO should have the cost savings in mind. The aspects of security, quality, and support also prove that open source is equal or even better than proprietary software. As an example, the Linux OS practically does not have an issue with viruses. There are many different OS available and everyone has the choice to determine what fits their needs best.
There is RedHat with a history of over 15 years in this business, or the very popular Ubuntu. In the area of business application open source offers a huge variety of different application. Some of them are even the leading vendor, like SugarCRM that has an outstanding reputation. “In almost every software category, open source offers a low-cost alternative to commercial enterprise apps.” (McAllister & Rist & Beck, 2005). All that together and the example of Ernie Ball, a company that has successfully transferred their whole computer systems to open source, does show that open source is ready for the business world. The best reasons to use open source software in a business environment are cost savings and that it gives the freedom to use software and change the source as it is needed. Open source removes the need for dependence on single vendor solutions and it provides very high quality products and very good support.