The True Cost of Open Source—There is Nothing Cheap about Free

Open source software (OSS) is the technology world’s response to consumers who are price sensitive, but as with many things, it’s important to do your homework before making a commitment. Read on for some thought provoking suggestions on how to evaluate the best ILS or KM software for your organization. Maybe it’s open source, maybe it isn’t.

A Comparative Approach

The most common reason for choosing open source is price. After all, it costs nothing. What can possibly beat that? Well, let’s dig a little deeper.

Implementation

After license fees, implementation represents the highest cost associated with getting any software package up and running. Someone familiar with the software has to help you implement—as well as train your staff. It is usually necessary to convert your data from one system to another. As it turns out, the cost of implementing open source software is pretty much the same as that of proprietary software.

(There is also an organizational cost to consider. The workflow of many people is going to be affected by the new system. The cost of the software and implementation is usually a fraction of these “hidden” costs.)

Maintenance

Once your system is up and running, it will need regular updates. One of the things that requires attention is maintaining compatibility with new versions of the operating system and web browsers. Installing security related software updates is also very important, otherwise your system could be compromised. Most open source vendors charge an annual maintenance fee, and some offer a “pay as you go” model. As with proprietary systems, the cost varies depending on what is covered and their commitment to response time.

Customization

It is likely that your system will need to be adjusted to accommodate your organization’s workflow. Sure, with open source, you can do whatever you want to the software. However, you will then have a “non-standard” version incompatible with the original system. That means future updates will be more difficult to install and consequently more expensive.

Vendors of proprietary systems try to avoid “non-standard” versions. However, some vendors, like Lucidea, have developed tools that allow non-programmers to modify their own systems without affecting compatibility with the original system. With such tools, users have the benefits of flexibility without the challenges of one-off software ownership.

Vendor Independence

Many open source users like the freedom to choose who maintains their system. If one vendor isn’t doing a good job, they can always switch to another. However, open source vendors are not dependent on keeping their clients happy in the way proprietary venders are.

Frankly, if a product has a bad reputation, it can destroy a proprietary vendor. Therefore, they will do their best to fix product issues and make a client happy. In contrast, while an unhappy client may negatively affect an open source vendor, that vendor can easily move on to another product because they haven’t invested in developing the technology.

The SaaS Alternative

What if you didn’t have to buy the software in order to use it? What if the vendor took responsibility for implementation and maintenance as well as providing you with easy-to-use tools that allow you to adapt the system to your unique needs?

SaaS solutions often have a total cost of ownership (TCO) that is the same or less than open source. How can that be? Vendors of SaaS solutions don’t sell the software, they rent it. That means no up-front licensing fees for clients.

SaaS providers achieve incredible economies of scale by installing the system on their own servers. They have banks of machines all doing the exact same job—cheaply and reliably. All clients need to access them is a connection to the internet—the cost of owning and maintaining servers is eliminated.

SaaS vendors also achieve tremendous operational efficiencies—they simply install the software once for all clients. Similarly, software updates are installed once and effortlessly applied across all clients. As for technical support, what could make that easier than having direct access to the computers running client data?

A simple method for calculating the true cost of open source

Talk to your open source supplier. Ask them how many employees they have and how many clients they have and then divide one into the other. Then multiply this by the average cost of an IT professional in your region (remember to include benefits and overhead).

For example: 20 employees/50 customers X $75,000 annual compensation.

In this scenario, the open source vendor must bill their average customer $30,000 per year.

In conclusion: an open source purchase decision requires that you go into it with your eyes open.