This note was sent to Steve Andriole, Thomas G. Labrecque Professor of
Business at Villanova University
To: stephen.andriole@villanova.edu
Steve,
read your piece here:
http://itmanagement.earthweb.com/columns/article.php/3560006
I'd be interested in seeing your students' analyses of the open source
value proposition. I would also be interested in understanding your
corporate constituency's costing and migration effort models too.
For instance, from your article:
--
"Several of them indicated the cost savings they might enjoy from
migration would be eaten alive by the migration cost itself, not to
mention the hassle and weirdo factors."
--
How many of these corporate CIOs looked at migration models where, rather
than costing a single software refresh cycle, where they moved from
Microsoft products to open source competitors, covering the costs for that
migration as a one-time-only event, they considered costing models where
they included as a minimum two or more software refresh cycles?
In such longer term scenarios, organisations migrate to open source in the
first refresh cycle and then upgrade those open source platforms and
applications on subsequent software refreshes. In such scenarios,
organisations don't have any subsequent financial heavy lifting because
the real effort of migration away from Microsoft has already happened in
the first refresh cycle.
My models indicate than in most circumstances, even for organisations
which are so entrenched (or locked-in) to Microsoft that the first refresh
cycle as a migration to open source is more expensive than merely upgrading
to the next version of Microsoft, these same organisations win financially
by the time they deploy their second refresh onto open source and moreso
for each subsequent refresh. The key indicator here is: does ICT
management within these organisations have a long-term vision and
strategic cost analysis which extends beyond 3-4 years? If they do not,
then it is a failure of management competence, nothing less.
One more question. How many organisations do you know that include the
cost of decommissioning technology as part of their cost models for
acquiring that technology? If, as is so often the case, it costs me an
immense amount to move from one technology option to a functional
alternative because that original technology option has a very high
transition-away cost, where do I, as CIO, place that cost in my TCO
analysis? Is it tied to the original technology selection, or do I lumber
it with whatever technology I look to replace that original choice with on
some latter date?
It should be obvious that if I select the second option, I'm setting my
organisation up for a classic lock-in scenario - one from which I will be
at the pricing mercy of the vendor of that original technology selection.
A scenario where the organisation I work for, whose interests I supposedly
protect, loses control over possibly strategic platforms and applications.
Surely this isn't something you would advocate and neither do I.
It is for these, and numerous other reasons, that I work with an
increasing number of organisatons to ensure their CXO-level executive team
understands that when looked through the most appropriate lens, open source
has a very real role to play within their organisation, and perhaps
unbeknownst to them, probably already does.
Cheers,
Con Zymaris
- CEO, Cybersource Pty. Ltd.
- Director, Open Source Industry Australia, Limited.
- Convenor, Open Source Victoria (A Government-funded industry cluster.)
PS: In case you weren't aware, the Commonwealth of Massachusetts undertook
a recent cost analysis contrasting a migration to the open source office
suite OpenOffice.org 2.0 as compared to upgrading their 80,000+ staff to
Microsoft Office 12. Their resulting cost-difference ratio was that
OpenOffice.org would cost them 90% less to migrate to than to upgrade to
then next version of the Microsoft product - $5 million as compared to $50
million. Yes, this included the costs or retraining their staff onto
OpenOffice.org, along with document and macro conversions. Would such data
change your CIO constituents' views? If it doesn't, I'd be interested to
know why.
Source:
Massachusetts to Save 90% costs through OpenOffice.org
http://www.zdnet.com.au/news/software/soa/Massachusetts_finalises_open_standards_proposal/0,2000061733,39214476,00.htm
Business at Villanova University
To: stephen.andriole@villanova.edu
Steve,
read your piece here:
http://itmanagement.earthweb.com/columns/article.php/3560006
I'd be interested in seeing your students' analyses of the open source
value proposition. I would also be interested in understanding your
corporate constituency's costing and migration effort models too.
For instance, from your article:
--
"Several of them indicated the cost savings they might enjoy from
migration would be eaten alive by the migration cost itself, not to
mention the hassle and weirdo factors."
--
How many of these corporate CIOs looked at migration models where, rather
than costing a single software refresh cycle, where they moved from
Microsoft products to open source competitors, covering the costs for that
migration as a one-time-only event, they considered costing models where
they included as a minimum two or more software refresh cycles?
In such longer term scenarios, organisations migrate to open source in the
first refresh cycle and then upgrade those open source platforms and
applications on subsequent software refreshes. In such scenarios,
organisations don't have any subsequent financial heavy lifting because
the real effort of migration away from Microsoft has already happened in
the first refresh cycle.
My models indicate than in most circumstances, even for organisations
which are so entrenched (or locked-in) to Microsoft that the first refresh
cycle as a migration to open source is more expensive than merely upgrading
to the next version of Microsoft, these same organisations win financially
by the time they deploy their second refresh onto open source and moreso
for each subsequent refresh. The key indicator here is: does ICT
management within these organisations have a long-term vision and
strategic cost analysis which extends beyond 3-4 years? If they do not,
then it is a failure of management competence, nothing less.
One more question. How many organisations do you know that include the
cost of decommissioning technology as part of their cost models for
acquiring that technology? If, as is so often the case, it costs me an
immense amount to move from one technology option to a functional
alternative because that original technology option has a very high
transition-away cost, where do I, as CIO, place that cost in my TCO
analysis? Is it tied to the original technology selection, or do I lumber
it with whatever technology I look to replace that original choice with on
some latter date?
It should be obvious that if I select the second option, I'm setting my
organisation up for a classic lock-in scenario - one from which I will be
at the pricing mercy of the vendor of that original technology selection.
A scenario where the organisation I work for, whose interests I supposedly
protect, loses control over possibly strategic platforms and applications.
Surely this isn't something you would advocate and neither do I.
It is for these, and numerous other reasons, that I work with an
increasing number of organisatons to ensure their CXO-level executive team
understands that when looked through the most appropriate lens, open source
has a very real role to play within their organisation, and perhaps
unbeknownst to them, probably already does.
Cheers,
Con Zymaris
- CEO, Cybersource Pty. Ltd.
- Director, Open Source Industry Australia, Limited.
- Convenor, Open Source Victoria (A Government-funded industry cluster.)
PS: In case you weren't aware, the Commonwealth of Massachusetts undertook
a recent cost analysis contrasting a migration to the open source office
suite OpenOffice.org 2.0 as compared to upgrading their 80,000+ staff to
Microsoft Office 12. Their resulting cost-difference ratio was that
OpenOffice.org would cost them 90% less to migrate to than to upgrade to
then next version of the Microsoft product - $5 million as compared to $50
million. Yes, this included the costs or retraining their staff onto
OpenOffice.org, along with document and macro conversions. Would such data
change your CIO constituents' views? If it doesn't, I'd be interested to
know why.
Source:
Massachusetts to Save 90% costs through OpenOffice.org
http://www.zdnet.com.au/news/software/soa/Massachusetts_finalises_open_standards_proposal/0,2000061733,39214476,00.htm
on November 2, 2005, 6:36 pm
used it for real big business tasks, running a data warehouse! Google use
it. It just works.
I wonder if people are just too invested in their Windows systems. They've
spent so long learning to adapt to its inherent problems that they wonder
whether they'd have to reinvest all that time adapting to Linux. After
all, the time and cost of anti-virus, central auditing and management is
huge - but a thin client or netboot Linux system doesn't suffer that.
Reply to this comment
on December 31, 2005, 2:23 pm
shift from the desktop to the webtop. This is going to change a lot of
their expectations, but only if we share a common webtop. The challenge
will be to maintain open standards and an open Internet.
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