Is Total Cost of Ownership (TCO) the major strategic driver to migrate to Open Source? Find out what the LSE report says…?Wednesday, December 28th, 2011
The objective of ‘Reducing cost and driving up efficiency’ has led many organizations to shift to the use of Open Source Software (OSS). Flexibility, easy customization, wide choice of vendors, open standard and open data are the other factors that have led many organizations to have renewed interest in OSS as a part of cost saving approaches.
Initiatives in many countries including Europe, in the USA and in the BRIC countries are proof of these policy ambitions. Around the globe, even governments have started taking initiatives to foster open source. The US government’s open government initiative is the best example. You can find here detailed information on this initiative.
The latest report from the prestigious London School of Economics (LSE) has certainly raised the spirit of the Open Source industry. This report was prepared for the UK Cabinet Office supported by OpenForum Europe.
LSE prepared this report to provide an independent evaluation of the possible savings to Government through the targeted use of free/open source software. The study came up with enduring cost reductions benefits by collecting evidence from those who are involved with the open source community or offering support services (with extensive experience).
Highlights of the findings that prove adopting Open Source is a good idea:
When asked to participants “Does your organisation have a policy in support for open source?” The responders reacted with just over half of their organisations had a policy in respect of open source.
Answering the question “Do you have substantial contracted support? If so is it from your usual systems integrator/partner?” Respondents spilt almost 50:50 as to whether they had substantial contracted support for open source or not. From the comments made it is clear that many see this as essentially an in-house task, and some saw it as a part of their wider commitment to the OS community.
Besides that, the major concern for many companies is reducing dependency on service providers or software (called vendor lock-in). In the report, ‘reduced vendor lock-in’ was found as the top scoring strategic driver for open source adoption. Value for money was the close second.
The respondents distinguished a range of important cost saving categories considering the component parts of the TCO model. The number one was cost of software, closely followed by cost of customization for specific business need. When considering the ease or difficulty of estimating these cost factors respondents were equally clear. It was no surprise that most of the respondents were aware that open source adoption does help overall to reduce costs.
“Respondents were clear that real cost savings are possible from adoption of open source software - license fees and other acquisition costs are close to zero.”
“Over half of the respondents gave examples of situations where OSS had replaced proprietary software. And there was strong agreement that these uses of OSS had saved the organisation money.”
“Some UK local authorities explained how open source supported agility. They saw the response time for queries and bug fixes as astounding compared to working with proprietary software companies who worked to their own cycles of product development.”
But, on the other hand…
“Respondents often emphasized that if open source is to become an accepted part of information systems work within the public sector then it needs government-level policies to sustain such a change including an overhaul of procurement processes. Most see this as an essential levelling of the playing field that can provide open source service companies, particularly in the SME sector, with a chance of survival and growth.”
The interviewees believe that open source is not just confined to saving money; it is also more able in the long run to be able to provide the types of systems and services that the public sector needs, and in a way that reflects the common interests of the sector.
You can also read the whole LSE report by clicking here.