Open Source Myth: That It Has a Higher Total Cost of Ownership (TCO)

This myth has been long-standing. Proprietary vendors would acknowledge that there were license fees associated with their software, but would point to the costs of migrating, re-training users, and higher wages and scarcity of comparable software support due to fewer «open source people» who can run free and open source software (FOSS).

However, there are weaknesses with those statements—indeed, with any TCO study that doesn’t take into account the particular site considering a purchase, and especially with any TCO conducted by a vendor to promote its own products.

Numerous studies conducted by people more familiar with (and sympathetic to) free and open source software suggest that its TCO is excellent. Such studies include one by Foss Technologies, Kenya and one by LWN.

A close look at Microsoft-funded studies reveal that the studies did not expose the true costs of the proprietary licenses. Many of these license costs were hidden in the purchase of new hardware, pre-installed operating systems, and even applications. If the hardware was purchased without the normally «bundled» software, the cost of the hardware would drop, allowing a more level playing field.

Microsoft has removed these studies from its web site. But one 2008 Microsoft study, which disappeared from its web site but was preserved by another organization, admitted that GNU/Linux has just as good a TCO as Windows—at least under certain circumstances.

The cost of ownership studies typically looked ahead for the next five years. During this time, personnel training for the proprietary operating system was typically ignored, since «everyone knew how to use that operating system.» In contrast, of course, employees had to be trained to use the open source operating system because «no one knows how to use it.»

However, the five-year studies missed a few things that happened in the sixth and following years. Sites had to install updates to the proprietary system, and sometimes do additional training. Likewise, sites might have to pay license update fees for the existing software.

Open source software, on the other hand, typically has a «flow» of updates that take people from one version to the other without needing massive retraining or license upgrade fees.

Over the years, many more people have been exposed to open source software and trained to be system and networking administrators, making these needed support people much more available, and giving a greater salary range for different jobs.

A number of years ago, proprietary software companies would generate (TCO) estimates, but over time, as the five-year TCO of the two styles of software became closer and closer, the companies stopped releasing their numbers.

However, TCO is not the only issue. Return on investment (ROI) is another consideration. If you have a certain amount of money to invest in a solution, perhaps that is the greatest issue.

People tend to think of open source versus proprietary software just for the desktop, not considering the costs of proprietary software for servers. Servers do not tend to have the server software bundled in. Licenses for server software are typically very expensive. Likewise for licenses for closed source software such as databases, geographical information software (GIS), statistical and data reduction tools, project management tools, etc. The cost of the licenses needed just to build your infrastructure can be daunting, particularly for a start-up.

In addition, look at the terms and conditions of your existing proprietary software license. You may find hidden costs in there.

As an example, a well-known proprietary database company used to insist that the only way to share a customer’s data with another customer (even a customer properly licensed for the same software) was to unload the data from the database and reload it into the other customer’s database. For large amounts of data (think petabytes) this would take days, as opposed to imaging the disks holding the data and giving the images to the new customer.

Development, training, and support for a new project (as opposed to converting an already existing project to FOSS) are typically the same whether you are using FOSS or proprietary software, but you don’t have to pay up-front license fees for the software if you use FOSS. So consider using FOSS for new projects.

Likewise, if your existing project is not working properly, or is coming up for an expensive license renewal, consider re-implementing it with FOSS.

Another issue that isn’t considered often enough is equipment reuse or redeployment. One of the early uses of Linux was to redeploy older equipment that was «retired» from the desktop or mainstream server to be used as routers, firewalls, switches, etc. This gave value to hardware that otherwise would be sent to the dump. These cost savings also fit into total cost of ownership.

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