Open up to a new source

Sunday Business Post - Computers in Business magazine - June 01 2008
Read this article online on the Sunday Business Post website by clicking here.

The open source method of software usage is making a strong claim to take over from the more traditional proprietary model among companies worldwide, writes Dermot Corrigan.

All Irish companies might not be aware of it, but there is a battle underway to determine how companies will pay for the software they use to run their business. The current champion is the proprietary model, where companies pay their software provider for a licence to purchase and use individual copies of office suites, e-mail systems, and accounts and enterprise packages.

The up-and-coming challenger is open source - an idea that software should be given away free to customers, and the source code that underpins it should be made freely available for anyone to see, alter and improve. The proprietary model has ruled the roost for the last 20 years or so, after gaining a hegemonic footing in the early 1980s, when desktop computers became widely available, according to Simon Phipps, chief open source officer with IT giant Sun Microsystems.

“As computers were becoming more common, the manufacturers stopped distributing the source code with the product,” said Phipps.” A decision was taken to restrict access to source code, but I would not say that prior to that all software had been free. It was described as unbundling, the software was no longer supplied automatically with the computer, and the source code was no longer supplied with the software.”

For years, the open source model was used by IT professionals to develop small applications that were generally only used within the techie community, according to Josep Mitja , board member of the Open Solutions Alliance, but the last decade has seen open source sail quietly to the forefront of the mainstream.

“Open source started with very technical things, it was mostly programmers were exchanging small pieces of code that were useful for them'' said Mitja. “Then came the operating systems like Linux, office tools like Open Office and browsers like Firefox. The last frontier for open source is enterprise applications, but these are also now appearing everywhere. Everything that is software will eventually become open source.”

Mitja said the main reason for the adoption of open source software into the everyday business world was its affordability.

“Open source is not necessarily always cheaper than proprietary software,” said Mitja. ”In theory it should be cheaper, as you do not pay licence fees, you just pay for services. It depends on how much customisation you require, but most of the time it works out around 40 per cent cheaper.”
Bill O'Brien, business group lead server with Microsoft Ireland, said Irish businesses did not care if their software was open source or proprietary, they just wanted their systems to work.

“In our experience, Irish SMEs are not concerned whether their IT is open source or proprietary,” said O'Brien. ”We find that their primary concerns are ensuring they have technology that meets the needs of their business, is easy to use, easy to manage, secure, works together and enables their people to get productive quickly. An Irish customer has never asked me for access to the source code for a solution.” Phipps said that a demand for better engineered software was also leading to the adoption of more open source software solutions.

“Open source software has bugs like al l software, but in the case of open source, everyone can fix the bugs,” he said.” Typically, that means fixes for popular open source software are available very fast. Often the quality of open source software rapidly increases, if it is popular, and innovation happens a lot faster.” Steve Harris, senior sales director for open source products with Novel l, said the support available for open source software was often just as good if not better than for proprietary competitors.

“Roughly speaking, services cost the same to support licenced software on multiple platforms as it does to support open source,” Harris said.” Open source software vendors often differentiate and distinguish themselves through the capability and availability of their support.” O'Brien rejected the idea that open source software was generally better value than proprietary products.

“For every piece of technology there is a total cost of ownership,” he said.

“While some products may be offered free of charge, the total cost of owning those products is very high through the need for extensive consulting services, support and maintenance.”

Widely-used

Linux is an open source operating system developed by a large number of enthusiasts around the world as a freely available alternative operating system to Microsoft Windows and Unix. Most Irish businesses use Linux to run aspects of their business, whether they know it or not, according to independent IT consultant Tom Raftery.

“The industry figures show that about 70 per cent of al l the websites in the world are hosted on Linux, so a lot of Irish companies are using open source software for hosting websites,” said Raftery. Novel l support the use of Linux in both web and non-web related tasks, according to Harris.

“The Irish community has historically adopted open source technology opportunistically in marginal application areas such as edge of network, web-server applications,” he said.” Over the past few years, the Lamp stack of open source software components - Linux; Apache Web server; MySQL database; and the coder's choice of PHP, Python or Perl - has moved beyond its position as a web developer's creative toolkit to become a major development platform for the enterprise.”

Harris said larger organisations such as EBS and Beaumont Hospital were using Linux and open source technology for their data centres and mission critical applications.

“The challenge is often about overcoming perceptions and getting people to move away from the common proprietary solutions, simply because they are so prevalent in the industry and not because open source solutions are not up to the job,” he said. Phipps said that the spread of the open-source web browser Firefox, developed by Mozilla, which is used by an estimated 70 mil lion people worldwide, was a prime example of how open source software was more innovative than proprietary.

“Everyone should be using Mozilla Firefox,” he said. ”All of the key innovation in web browser technology over the last few years has happened in the open source community. For example, tabbed browsing happened in the open source community and then was copied by the proprietary browsers.” Mozilla also offers a free-to-download open source e-mail package called Thunderbird.

“There are so many email clients out there that are free,” said Raftery.

“There has to be a pretty compelling reason to pay for your e-mail software.” Harris said some Irish software development companies were offering open source solutions to Irish SMEs.

“The best example is Sugar CRM, many companies use this to manage their sales cycles and customer contacts, with a similar look and feel to SalesForce.com but no cost attributable to the acquisition of the software,” he said.

“Commercial support is available but not mandatory, and commercial extensions have grown up around it. Another good example is Turbocash. This provides everything an SME would require for accounting including invoicing without using commercially-licenced applications such as Oracle Financials or JD Edwards.”

Industry giant Sun Microsystems recently acquired open source database developer MySQL in a deal valued at approximately $1 billion. MySQL software is free, and the company charges for services such as training and support. Phipps said the MySQL purchase was an indication that Sun saw the open source model as an effective revenue generator for the company.

“MySQL does business by selling a subscription to an enterprise service around MySQL,” he said. ”If you are one of the hundreds of millions of MySQL users around the world, and you need high quality support or you need tools to optimise MySQL, you buy those from MySQL the company.

“The acquisition has had a big effect in changing the way Sun itself thinks about open source software,” Phipps said. ”I believe open source developed and maintained software will be dominant in the market within a very short space of time.” Harris said Novell was enthusiastically embracing open source technology.

“Novell has responded by embracing open source technology and sponsoring many of the prominent open source projects such as Mono, Open Office and XEN virtualisation,” he said. ”We have become a mixed source company where we see value in bringing the best, heterogeneous software technology to the market to simplify IT delivery and management of these mixed configurations.”

However, O'Brien said Microsoft had no plans to release the source code of any of its software products any time soon.

“We believe that the world of open source and the world of proprietary software will co-exist,” he said. ”By investing in research and development we can create products that do a better job of meeting a customer's needs than open source can.”

Office

Sun's Open Office software is a freely available and downloadable alternative to Microsoft's proprietary Office suite of applications. Phipps said Sun purchased the Open Office technology for its internal use, not as a potential commercial product. “Sun decided to acquire the office suite for use on Solaris, which is the desktop system mainly used inside Sun in 2000,” he said.

“Rather than developing the software alone, Sun decided to make it open source, with a view towards developing a community to work on that source code.” A large group of independent developers worked on improving the software, and then individuals and organisations started downloading it for personal and business use.

“It is in use by tens of millions of users around the world,” said Phipps. “Compared with the monopoly that the other product on the market has, that is quite a small number, but a lot of people are not aware that a fully functional office suite that will not cost them a penny to use exists.

“People assume there is a catch somewhere, because everyone has been programmed to pay for software, but in this case there is a completely free lunch.” Google has also recently launched a suite of office products that are free to use, but are not open source. Raftery said that Irish companies that used non-Microsoft office software generally discovered them on their own.

“The majority of non-technical workplaces that use Open Office know about it as they have a particularly savvy IT manager or administrator,” he said. “But it makes for massive savings.”

Phipps said Sun had not originally planned to offer for-pay services around Open Office, but had recently introduced some support packages in response to customer demands. “You can buy support on a per-incident basis or you can buy support packs through the Sun website,” he said. ”There are also other service providers who can deliver the same thing. A lot of companies have experts on staff who save them from the need to spend money on support, but the service is always available if they need it.”

O'Brien said interoperability (the ability to transfer files and information easily between different software packages) was one reason why companies decided to stick with Microsoft's proprietary office suite.

“A primary consideration for SMEs is interoperability,” he said O'Brien. ”Does their software work with other applications and systems? Microsoft products are designed to adhere to industry standards and ensure open connections to other products and technologies.”

Raftery said the latest open source office suites did offer such interoperability and would inevitably take over from proprietary software as the market leader.

“Open Office and Google Docs can import and export files and documents to and from Microsoft Word so you can inter-use them within an office,” he said. ”The same is also the case for Microsoft Excel. In the next four or five years nobody will be paying for office software any more.”

ERP

Open source web browsers and office suites are relatively easier to develop than more complex business software products, such as enterprise resource processing (ERP) or customer relationship management (CRM) solutions. However, more of these are emerging all the time in open source formats. For instance, Openbravo is an open source, free-to-download, web-based ERP system.

“We are the largest open source ERP company in the world in terms of people using our software,” said Mitja, whose day job is chief operating officer of Openbravo. ”Every day, 1,500 people download the software.” Mitja said Openbravo had all the functionality of its proprietary rivals.

“Openbravo enables a company to plan all its operations,” he said. ”This can include things such as manufacturing, logistics, warehouse, sales, basically all the operations in a company.

“The accounting for each operation is automatically generated by the transactions and also you can get a lot of business intelligence where you can mine the data the company generates and with this you can get executive information on your sales, capacity and other options.”

Mitja said that, while anyone can go to www.openbravo.com and download a free version of the software, businesses generally needed specialists to help them roll it out.

“It is a complex piece of software that requires a software engineer to install it and an implementation project,” he said.

“With any ERP system the software is typically customised to the needs of the customer, as business processes are always slightly different from company to company. “If you have a large organisation we could train your IT people, but typically SMEs are served by companies that help with implementation projects or system integrators,” said Mitja.

“We partner with system integrators who know the local market and who can adopt to local conditions if required. Taxes, language, etc are different in every country, but because it is open source, it is easy to localise the software.” Mitja said Openbravo was typically better value than competing proprietary ERP systems, including SAP and Microsoft Dynamics.

“The smallest project you can buy from us would be about €15,000 and can go up to €200,000 depending on how customised the software needs to be,” he said. Mitja said Openbravo's customers were attracted by the open source model's ease of customisation.

“If a company wants to be able to adapt the software to their own requirements, our proposition is very attractive,” he said. “The client has no restrictions and can do whatever they want with the code. There is not always the case with proprietary software.”

Halfway house

Some software developers and vendors have chosen to offer software to their customers using both the open source and proprietary model, and let the customer choose which suited them best. One of these is business intelligence software vendor Jaspersoft, which serve the EMEA market from its operation in Dublin.

“Jaspersoft has been around about nine years, but it changed its business model just over three years ago to an open source model,” said Tom Cahill, senior director of EMEA sales with Jaspersoft Corporation. ”We are now able to deliver business intelligence tools for everyone, at a very low cost, that are easy to implement.” Jaspersoft offer two versions of its BI tool, one proprietary and the other open source, and available for free download from Jaspersoft.com.

“They can download and implement the open source version, or they can download the professional version, which is freely available for evaluation from our website,” he said. “Once they have evaluated that they can decide whether to just go with the open source version, or whether they need the professional version, which they can then buy from us.

“The two versions are at different stages of development,” said Cahill. ”As we develop and quality assure the professional version of the software there is functionality that gets into the professional product that may not be in the open source version. Ultimately these would flow months, or quarters, or in some cases years later, into the freely available version.” Jaspersoft has partnered with Irish company Enovation to provide training and support for its Irish customers.

“Either we would provide the training, or we would enable our partners to be able to train customers,” Cahill said. ”That can be in the open source or professional versions.” Cahill said Jaspersoft's BI products were now the most widely deployed business intelligence solutions in the world.

“We have over three million downloads of our products to date, we are exceeding 100,000 downloads per month at this point,” he said.”We have just over 90,000 production deployments globally, and over 9,000 paying customers. In EMEA we have been doubling our bookings revenue quarter on quarter.”

The open source model allows Jaspersoft to develop and innovate its product much more efficiently than if it had stuck to the proprietary model, Cahill said. “The Jaspersoft organisation is a relatively small company, but we have over 65,000 developers developing Jaspersoft products in the open source community,” he said.

“Some would be employed in IT departments, some would be employed in smaller companies, and some would be self-employed or doing this on the side. The developer community is very active and dedicated. This is what a lot of people do in their spare time.”