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The Open-Source Impact - It’s Gaining Ground In Larger Enterprises, But What About SMEs?

Is open-source software making an impact in small and medium-sized enterprises?

That depends on whom you ask. Open-source developers and service providers will sing the praises of software that is not only free but also frees you from many long-established commercial restraints. However, if you ask Microsoft, it will dismiss open-source software—including alternatives such as OpenOffice (http://www.openoffice.org/), BSD (http://www.bsd.org/), and Red Hat Linux (http://www.redhat.com/)—as bit players, tiny specs on the landscape of mission-critical business computing.

And yet, there is an impact. The real question is, to what extent? Surprisingly, most of the impact today is in the enterprise. Larger companies have the resources to support Linux and have established relationships with service providers such as IBM (http://www.ibm.com/) and Oracle (http://www.oracle.com/) that sometimes promote open source as an alternative to Microsoft, according to Yankee Group analyst Gary Chen. Meanwhile, the impact on SMEs that could benefit the most from the cost savings and decommercialization is minimal.

Open Source In The Small To Medium-Sized Enterprise

“Even in the next five years, the adoption rate for open-source software will increase only about 1 to 2% for small business,” says Chen, who wrote a report on the open-source impact. According to Chen, the adoption rate could increase significantly in 10 years, but he notes how difficult it is to predict what companies will do over the next decade. In his opinion, Microsoft is entrenched in business at so many levels, including service, middleware, email, and Web servers and with service providers and partners. These channels are so well-established and reliable that open-source options are not as attractive.

One issue is support. Costs for deploying open source in smaller companies are higher because the admin staff is not typically trained to support Linux, OpenOffice, and other software, says Chen. Interestingly, even though these programs are generally free, the consultants trained to support them typically charge a much higher rate. On the other hand, finding a Microsoft- or Cisco-certified consultant is relatively easy. Still, open-source providers disagree with the assessment that open source is harder to support.

“There is a more significant user support base for open source,” says Marc Rotzow, the chief technology officer at Open Source Systems, a solutions provider for data centers (http://www.opensourcesystems.com/). “Oftentimes you will deal directly with project heads or lead programmers. When I ask a question or report a bug about Webmin, a Web-based interface for managing Unix-based servers [http://www.webmin.com/], I will likely receive a reply from Jamie Cameron, the creator of Webmin. You will never get that level of support from a closed-source project.”

Still, according to Chen, there is also an important training and usability factor. Laptop buyers tend to use whatever is installed on their systems and are accustomed to using Microsoft productivity software. Even if an open-source alternative is easier to use, it's new and therefore presents a higher learning curve. "There's a much greater challenge with desktops than servers, where you can swap out a Microsoft server with a Linux server for email or Web. With a desktop, users expect to be able to plug in a USB key or a printer, and it will just work. And small and midsized companies have already paid for the OS license for Windows, so replacing it with Linux is not as attractive.”

The Turning Tide? Still, even with the drawbacks of support and training, the picture is changing. Linux is finally becoming part of college or university coursework, and Ubuntu (http://www.ubuntu.com/) downloads are skyrocketing. According to Netcraft (http://www.netcraft.com/), 60% of all Web servers in the world use Apache, an open-source platform (http://www.apache.org/). Because of the growing interest, usability has become more important as the user base grows. And as the software matures and gains ground, end-user training is less of a problem than it once was. Meanwhile, open-source software is also customizable and uses an open architecture that is not commercially retrained, so smaller companies could eventually develop internal resources to support the infrastructure.

Eventually, the message could catch on and the open-source impact could increase. “The biggest hurdle we face is the perception that open source and Linux is just too difficult to use or lacks too many features to be effective [in smaller companies],” says Rotzow. “This is why people keep choosing Microsoft.” In many ways, the ancillary example to the open-source impact is Apple (http://www.apple.com/), which has steadily gained some market share in business over the past few years. Chen notes that Apple has an advantage over open source in terms of usability and skilled providers but that the Mac OS is a closed, commercial system. Open source could gain more traction because there are so many emerging open-source vendors, such as VA Software (http://www.vasoftware.com/), Adaptive Planning (http://www.adaptiveplanning.com/), Centric CRM (http://www.centriccrm.com/), OpenMFG (http://www.openmfg.com/), Pentaho (http://www.pentaho.org/), Zenoss (http://www.zenoss.com/), and Liferay (www.liferay.com).

“If there’s going to be an impact, it will be through constant steady growth over the next five to 10 years,” says Chen. “Commercial vendors need to start working together, form a consistent marketing message, train people to have the open-source skills, improve the software and interoperability between systems, and improve usability.”

by John Brandon

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