SIP REPORT

The Business Case of Open Source Software

(Summer Internship Project Report)

Submitted in Partial fulfilment of the requirement for the award of
MASTERS OF MANAGEMENT STUDIES (MMS)

Submitted to

MET INSTITUTE OF MANAGEMENT STUDIES
Bandra , Mumbai

Submitted by
Kadambari Sable
Roll No-134
Specialization-Marketing

Business case of open
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SIP REPORT

Acknowledgements

I would like to acknowledge and thank the individuals who contributed to this
document. In particular, thanks to Vishal Mehrotra, Francis Dello Russo, David
Emery, Paul Garvey, Robert Giallombardo, Michael Macpherson, Frank
McPherson, James Moore, and Audrey Taub for their insights and helpful
reviews. I would like to thank Vishal Mehrotra for his assistance in producing
this document. Also, thanks to Janice Ballo and Theresa Dillon for the materials
they contributed through their extensive search efforts.

Signature

(Kadambari Sable)

Date:

Business case of open
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SIP REPORT

Certificate from Company

Business case of open
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SIP REPORT

Index

S.No Particulars Page No
1 Need and Justification of Project 1
2 Introduction
3 Company Background and
information
4 Data Collection and Data Analysis
and Interviews
5 Processes and Procedures
6 Problem framing and Problem
solving
7 Suggestions and Recommendations
8 Ethical, Social, Environmental
impact of project
9 My learning’s
10 Conclusions
11 A peep in to the future
12 Bibliography

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because its source code is the property of its original authors. it's the code computer programmers can manipulate to change how a piece of software—a "program" or "application"—works. check email."Source code" is the part of software that most computer users don't ever see. Some open source licenses ensure that anyone who alters and then shares a program with others must also share that program's source code without charging a licensing fee for it. LibreOffice and the GNU Image Manipulation Program are examples of open source software. What's the difference between open source software and other types of software? Some software has source code that cannot be modified by anyone but the person. In order to use proprietary software." It means that anyone should be able to modify the source code to suit his or her needs. "open source doesn't just mean access to the source code. So as the Open Source Initiative explains. and that no one should prevent others from doing the same. team. Every time computer users view webpages. This kind of software is frequently called "proprietary software" or "closed source" software. In other words. Microsoft Word and Adobe Photoshop are examples of proprietary software. computer programmers can access. Open source software licenses promote collaboration and sharing because they allow other people to make modifications to source code and incorporate those changes into their own projects. SIP REPORT 1. their computers. copy it. Need and Justification of Project Open source software is software whose source code is available for modification or enhancement by anyone. mobile phones. or organization who created it and maintains exclusive control over it. In fact. because much of the Internet itself is built on many open source technologies—like the Linux operating system and the Apache Web server application—anyone using the Internet benefits from open source software. In fact. users must accept the terms of a license when they use open source software—but the legal terms of open source licenses differ dramatically from those of proprietary licenses. Is open source software only important to computer programmers? Open source software benefits programmers and non-programmers alike. The computers that do all this important work are typically located in faraway places that users don't see or can't physically access—which is why some people call these computers Business case of open source5 . Programmers who have access to a computer program's source code can improve that program by adding features to it or fixing parts that don't always work correctly. stream music online. view. and modify open source software whenever they like—as long as they let others do the same when they share their work. As they do with proprietary software. computer users must agree (usually by signing a license displayed the first time they run this software) that they will not do anything with the software that the software's authors have not expressly permitted. The Initiative's definition of "open source" contains several other important provisions. they could be violating the terms of some open source licenses if they don't do this. Open source software is different. chat with friends. learn from it. who are the only ones legally allowed to copy or modify it. Its authors make its source code available to others who would like to view that code. or gaming consoles connect to a global network of computers that routes and transmits their data to the "local" devices they have in front of them. or share it. alter it. or play multiplayer video games.

" because it involves activities (like storing files. Others. Doesn't "open source" just mean something is free of charge? No. but also the global network of remote computers that form an "atmosphere" around them. Instead. and they can change parts of it they don't like. Others like open source software because it helps them become better programmers. their software remains free of charge and they make money helping others install. The software that runs "underneath" cloud computing applications acts as a platform for those applications. But because most open source licenses require them to release their source code when they sell software to others. SIP REPORT "remote computers. users that rely on software for critical tasks can be sure their tools won't disappear or fall into disrepair if their original creators stop working on them. and upgraded quickly. Because the source code for open source software is distributed publicly. Users who aren't programmers also benefit from open source software. or watching videos) that incorporate not only local devices. This is a common misconception about what "open source" implies. they use online word processing. long-term projects. Cloud computing applications run "on top" of additional software that helps them operate smoothly and effectively. OpenStack is an example of an open source cloud computing platform. because they can use this software for any purpose they wish— not merely the way someone else thinks they should. use. updated. people rely on remote computers when doing things they might otherwise do on their local devices. Cloud computing is an increasingly important aspect of everyday life with Internet-connected devices." More and more. Some people prefer open source software because they consider it more secure and stable than proprietary software. They can also share their work with others. are closed source programs. they simply access these programs on remote computers by using a Web browser or mobile phone application. and image editing software that they don't install and run on their personal computers. Because open source code is publicly accessible. like Etherpad. sharing photos. students can learn to make better software by studying what others have written. are open source programs. and troubleshoot it Business case of open source6 . And because so many programmers can work on a piece of open source software without asking for permission from original authors. inviting comment and critique. open source software is generally fixed. Some people call remote computing "cloud computing. For example. This way. Because anyone can view and modify open source software. email management. Programmers can charge money for the open source software they create or to which they contribute. Why do people prefer using open source software? Many people prefer open source software because they have more control over that kind of software. many open source software programmers find that charging users money for software services and support (rather than for the software itself) is more lucrative. Many users prefer open source software to proprietary software for important. like Google Docs. They can examine the code to make sure it's not doing anything they don't want it to do. Cloud computing platforms can be open source or closed source. someone might spot and correct errors or omissions that a program's original authors might have missed. Some cloud computing applications.

free and open source software (FOSS) holds numerous other compelling advantages for businesses. SIP REPORT 10 Reasons Open Source Is Good for Business With the many business and government organizations that now use open source software such as Linux. some of them even more valuable than the software's low price. and that's clearly not the case. It's essentially the polar opposite of the "security through obscurity" argument used so often to justify the use of expensive proprietary products. is that the only reason it was possible is that the kernel code is open to public view. the more likely any flaws will be caught and fixed quickly. so no one outside the companies that own them has the faintest clue how many bugs they contain." What that means is that the more people who can see and test a set of code. All it means is that those products are closed from public view. And there's no way the limited set of developers and testers within those companies can test their products as well as the worldwide community constantly scrutinizing FOSS can. but the example is still a perfect illustration of what's known as "Linus' Law. Does the absence of such flaw reports about the code of the iPhone or Windows mean that such products are more secure? Far from it--quite the opposite. the creator of Linux. Android may not be fully open source. Bugs in open source software also tend to get fixed immediately. 1. Security It's hard to think of a better testament to the superior security of open source software than the recent discovery by Coverity of a number of defects in the Android kernel. companies that adopted it during the Great Recession would surely have switched back to the expensive proprietary stuff as soon as conditions began to ease. all bugs are shallow. as in the case of the Linux kernel exploit uncovered not long ago." named for Linus Torvalds. you might even say. "Given enough eyeballs. Business case of open source7 . If it were. Rather. in other words. What's so encouraging about this discovery. According to that maxim. as I noted the other day. it's becoming increasingly clear that price is not the only advantage such software holds.

Quality Which is more likely to be better: a software package created by a handful of developers. 3. In general. 2. They also have a worldwide community of developers and users at their disposal for help with that. With FOSS. Freedom When businesses turn to open source software. Microsoft. and that limits what they can do with the products they're paying for. Customizability Along similar lines. requirements. that technical superiority is typically the primary reason enterprises choose open source software. Since the code is open. It's not a matter of the vendor giving users what it thinks they want-- users and developers make what they want. users are in control to make their own decisions and to do what they want with the software. SIP REPORT In the proprietary world? Not so much. business users can take a piece of open source software and tweak it to suit their needs. for example. open source software gets closest to what users want because those users can have a hand in making it so. dictates. or a software package created by thousands of developers? Just as there are countless developers and users working to improve the security of open source software. prices. 4. At least one recent study has shown. and they make it well. they free themselves from the severe vendor lock-in that can afflict users of proprietary packages. so are there just as many innovating new features and enhancements to those products. priorities and timetable. it's simply a matter of modifying it to add the functionality they want. on the other hand. Business case of open source8 . Customers of such vendors are at the mercy of the vendor's vision. in fact. Good luck to all the businesses using it in the meantime. typically takes weeks if not months to patch vulnerabilities such as the recently discovered Internet Explorer zero-day flaw.

If you value interoperability with other businesses. It's up to you--not some vendor--to decide when it's time to upgrade. open source software is definitely the way to go. is typically much less resource-intensive. wikis. Support Options Open source software is generally free. computers and users. forges. means you can see for yourself and be confident. for example. however. has an online community with excellent documentation. and so is a world of support through the vibrant communities surrounding each piece of software. Interoperability Open source software is much better at adhering to open standards than proprietary software is. Open source software. Auditability With closed source software. Flexibility When your business uses proprietary software such as Microsoft Windows and Office. SIP REPORT 5. 8. meaning that you can run it well even on older hardware. forums. Business case of open source9 . newsgroups and even live support chat. Most every Linux distribution. 7. you have nothing but the vendor's claims telling you that they're keeping the software secure and adhering to standards. It's basically a leap of faith. you are on a treadmill that requires you to keep upgrading both software and hardware ad infinitum. and don't want to be limited by proprietary data formats. for instance. on the other hand. 6. mailing lists. The visibility of the code behind open source software.

support charges. But with all the many benefits it holds. too. 10. for example. SIP REPORT For businesses that want extra assurance. of course. that your business should necessarily use open source software for everything. None of this is to say. it will typically cost you nothing to try it out first. Try Before You Buy If you're considering using open source software. since support is where their revenue is focused. and partly due to the existence of LiveCDs and Live USBs for many Linux distributions. No commitment required until you're sure. This is partly due to the software's free price. Providers of commercial support for open source software tend to be more responsive. 9. you'd be remiss not to consider it seriously Business case of open source10 . proprietary software takes more out of your business than you probably even realize. Cost Between the purchase price of the software itself. there are now paid support options on most open source packages at prices that still fall far below what most proprietary vendors will charge. And for what? You can get better quality at a fraction of the price. the exorbitant cost of mandatory virus protection. ongoing upgrade expenses and the costs associated with being locked in.

and without precedent in its nature. But it is not too complicated. in general. What is open source software? It is not easy to define the term ‘open source software’ with few words. It also enables completely new business models. SIP REPORT 2. although in recent years it has reached a critical mass. This document tries to provide some facts. a very positive impact as an enabler for the creation of new markets and business opportunities. to the point that the current rules by which the software industry behaves will completely change. or if it deserves more and better study and consideration. since the idea in itself Business case of open source11 . which has allowed it to enter the mainstream software market . the open source software phenomenon is not historically new. and in society as a whole. It allows for novel development models. which are shaping a network of groups and companies based on open source software development. due to the many categories and variants that exist. generating a level of interest similar to that of the first moments of the Internet. opinions and references. many other believe that changes caused by open source will be so deep that they will completely shape the software industry of the first decade of the 21st century. And it has. Despite these facts. which have already been demonstrated to be especially well suited to efficiently take advantage of the work of developers spread across all corners of the planet. Introduction Open source software is becoming the most interesting ‘new’ phenomenon of the entire information technology landscape. as we will show in this document. open source software2 recently got the attention of the press as a totally new thing that ‘suddenly appeared’. The impact of open source technology is expected to be quite noticeable in the software industry. so that the reader can decide if all of this is just nonsense. On the contrary. Exactly like the personal computer and the Internet. However. many people think that the open source movement is merely another temporary fashion in the software industry. either. Many people believe that the impact of open source software in the information technology industry and in society in general will be huge.

It is important now to make clear that we are talking about freedom.  Have the software at their disposal to fit it to their needs. by the way. is absolutely necessary to be able to understand its functionality. there is a fourth one which is basic. and ‘gratis software’ when referring to zero acquisition cost. what do we understand as open source software. SIP REPORT is simple. usually written in a high level programming language. The use of the Spanish and French word ‘libre’. not completely. before going into more detail. it is a good idea to state clearly that open source software does not have to be gratis. about ‘free software’. This fact causes some controversy in certain circles. The source code of a program. they are not forced to do so. in English. if they feel it is appropriate. Of course. etc. let us devote a moment to explain. we will use mainly the term ‘open source’ when referring to users freedom of use. This redistribution can be done for free. That is. Because of that. augmenting its functionality. they are not forced to do so. has been adopted in many environments to refer to open source software. Another view. they can decide to protect it with several different licences. In the same way. If programmers have access to the source code of a program. Even more. or at least. but in general. users of an open source program can modify it. more pragmatic. redistribution. in this document. Therefore. it is necessary to “protect” it with a licence which impose certain restrictions on the way that it can be used and distributed . Therefore. not fixed before hand . people holding this view maintain that it is necessary to limit the ways of use and distribution. to modify it and to improve it. they can redistribute it. in a relatively informal way. for whatever they wish. General idea of open source software When we talk. they can study it. fixing its bugs. there is a dangerous ambiguity. and work with it as the original author would. who could themselves use it according to their own needs. To satisfy those previous conditions.  Redistribute the software to other users. or at a charge. But in any case. and is necessarily derived from them:  Users of a piece of software must have access to its source code. Business case of open source12 . get knowledge of all its details. before using stricter definitions. because it is considered that these licences make the software distributed under them “less free”. Anyway. on as many computers as they wish. The main features that characterize free (open source) software is the freedom that users have to:  Use the software as they wish. with current legislation. and studying its operation. it usually is not. Depending on the ideas and goals of the authors of a piece of code. is that software will be made more free by guaranteeing the perpetuation of these freedoms for all its users. in any technically appropriate situation. if this freedom is to be guaranteed for a given piece of software. and not obligation. but will not be used here for the sake of uniformity.. due to ‘free’ meaning both ‘freedom’ and ‘gratis’. Paradoxically. this includes improving it.

Many Indian government departments and businesses have now made it policy to use and deploy FOSS wherever possible.” While adherents of the “free software” term emphasize the ethical and philosophical aspects of community use and development of software. The economic impact of any technology introduction is studied by considering the impact that the technology has on the adoptive population. FOSS is a competitive technology to proprietary software. as well as to reflect a term that has currency in the community in India. It should be pointed out here that there is some difference in the meanings and values associated with terms such as “open source” and “free software. SIP REPORT It is widely believed that Free and Open Source software (FOSS) has an important and lasting role to play in a developing country such as India. For many cases. In this context it is important to ask whether the adoption of FOSS has a specific economic impact and whether the adoption decisions are justified by sound economic rationale. Business case of open source13 . In this report the term FOSS is used to reflect these common values. There is much in common between the adherents of both the phrases. the most important and substantive economic impact of FOSS is as a substitute for proprietary software. FOSS has already made a strong impact as it has been adopted by many businesses. in their outlook on issues such as open standards and patents. and individual users. The various software packages and applications available in FOSS have assumed a serious and non-hobbyist position vis-a-vis proprietary software. educational institutions. the “open source” adherents emphasize the pragmatic and business- friendly aspects of this technology. It differs in the manner in which it is produced and distributed. government departments. it is a substitute for proprietary software.

Company background and information Tata Consultancy Services (TCS) is an IT services. India’s largest industrial conglomerate. ensuring a level of certainty no other firm can match. consulting and business solutions organisation that delivers real results to global businesses. TCS offers the following solutions: ● Assurance services. engineering and assurance services. Services TCS helps clients optimise business processes for maximum efficiency and galvanise their IT infrastructure to be both resilient and robust. TCS offers a consulting-led. ● Business process services. integrated portfolio of IT. ● Consulting. 2014. A part of the Tata group. recognised as the benchmark of excellence in software development. Business case of open source14 . BPO. SIP REPORT 3.4 billion for the year ended March 31. and is listed on the National Stock Exchange and Bombay Stock Exchange in India.000 of the world’s best-trained consultants in 46 countries. ● Digital enterprise. ● BI and performance management. This is delivered through its unique Global Network Delivery ModelTM. infrastructure. The company generated consolidated revenues of US $13. TCS has over 318.

oil field services and renewable. ● Insurance. ● Manufacturing. Business case of open source15 . transportation and hospitality. mitigate risks and become operationally excellent. mining and construction. ● Resources . ● Utilities. Some of the industries it serves are: ● Banking and financial services. ● High tech. ● Enterprise solutions. ● Enterprise security and risk management. ● Retail and consumer products. SIP REPORT ● Eco-sustainability services.small and medium business. ● Media and information services. ● IT infrastructure services. ● Engineering and industrial services. ● Telecom.oil and gas. ● Healthcare. Industries TCS has the depth and breadth of experience and expertise that businesses need to achieve business goals and succeed amidst fierce competition. ● Supply chain management. ● Platform solutions. ● Energy . ● IT services.metals. ● Government. ● Travel. ● iON . TCS helps clients from various industries solve complex problems. ● Life sciences.

It is made up of answers to open-ended questions. ● TCS technology products. they cannot be numerically expresses as such. including large multi-national firms. Some organisations that have not adopted FOSS are also studied to understand the reasons why FOSS was excluded by them. education and commercial segments. in multiple ways. The case study methodology is adopted for studying the organisations. Location TCS is headquartered in Mumbai. Life Insurance Corporation of India Business case of open source16 . As triangulated. The method is that of directly studying organisations that have adopted FOSS and measuring. The Secondary research pointed out the following data: Below mentioned study examines the economic impact of FOSS technology for organisations in India. Organisations are selected from government. SIP REPORT Software ● Digital software and solutions. the impact the technology has had. operates in 45 countries and has more than 208 offices across the world. Data Collection and Data Analysis and Interviews Data analysis is the process in which the acquired data is organized in a way that it can make sense Creswell (2003). The methodology relies on both primary data obtained from interviews of personnel in the organisations as well as secondary data and reports available in the public domain. Government organisations include government departments and public sector undertakings (PSUs). ● TCS BaNCS. In the commercial segment firms are selected from small and medium enterprises (SMEs) and from large firms. ● TCS MasterCraft. 4. This methodology entails a detailed and context-specific analysis of the organisation that unravels the conditions under which FOSS was adopted and the manner in which the decisions were made.

Data pertaining to almost 100 million policies is being held on computers in LIC. NIA invests heavily in information technology and the yearly IT budget is about Rs. New India Assurance Company New India Assurance Company Limited (NIA) is a public sector general insurance company. 100 Divisional offices. and then moved desktops to Linux too. Today LIC functions with 2048 fully computerized Branch Offices. having started in 2001. LIC migrated almost 60% of its desktops to Linux and open source based applications. in particular. the server count is close to 3500. It began by moving servers to Linux. Of this. LIC’s Wide Area Network covers 100 divisional offices and connects all the branches through a Metro Area Network. not only in India. prompt acceptance of their premium payments. Thus. This service enabled policyholders to receive immediate policy status reports. These computations are based on extrapolations of the data provided by LIC. Rs. thus making all the divisional offices achieve the distinction of 100% branch computerization. in 2003-04 it migrated all its servers to Linux. and to get a revival quotation or a loan quotation on demand. LIC is one of the pioneers in FOSS deployments in India. All the branches are connected to the zonal and divisional offices through Wide Area Network (WAN) while the offices in the same city are connected via a Metropolitan Area Network (MAN). 200 Crores. with over 22. is spread over 26 regions. LIC deployed Linux on some of its servers and saved Rs 120 million.000 employees. 50 Crores on software while the Business case of open source17 .100 offices. In 1995. it initiated a massive computerisation drive with a view to enhancing customer responsiveness and services. LIC was a pioneer organization in India to introduce and leverage information technology in their business. in total. The company has a range of more than 150 products and is one of the largest non-life insurance companies. All the 2048 branches across the country were covered under front-end operations. but also in the Afro-Asian region. 7 Zonal offices and the Corporate office. while being headquartered in Mumbai. 60 Crores is spent on hardware and Rs.000. Each branch has about 20 to 30 workstations. Subsequently. Its network of 1. to the rural areas with a view to reach all insurable persons in the country. Each branch has one dedicated server while the divisional and zonal office have about 10 servers each and the central corporate office has about 50 servers. Later. LIC's tangible cost savings are summarised in the table below. The total desktop count is close to 30. In a pilot in 2003. SIP REPORT Life Insurance Corporation of India (LIC) is one of the largest insurers in India and was created to spread life insurance widely and. in order to provide them adequate financial cover at a reasonable cost.

For NIA. D K Sinha. And this entire system was built under Rs. and for easy adoption of updates and new versions. The estimate is that of Rs 800 million per annum savings owing to FOSS. 25 Lacs inclusive of software and hardware costs saving a lot of money. They use about 1500 servers. The intention of the case studies was to inquire about FOSS usage using an unstructured set of questions. 20 case studies. ANALYSIS OF CASE DATA This section presents a detailed analysis of the case data. SIP REPORT remaining sum is spent on managed services. “We began with 600 users and scaled to 3000 users without additional hardware. To summarise. Soon.” says Mr. This success was followed by a move to convert desktops to Linux and although this met with resistance from users. which are reflected in the reduced IT budget. NIA's FOSS experiment started when they deployed a corporate mailing solution using open source mailing solution of SendMail. Chief Manager. The FOSS adoption is driven by security and control over pirated software. NIA managed to convert 4000 out of 7000 desktops to Linux. The desktop count is close to 7000. Basic summary statistics are provided. IT managers state that they must have saved an estimated 35% to 40% on IT expenditure every year owing to FOSS. NIA main benefit from FOSS adoption is the continued savings they have. IT at NIA. rather than pose structured questions for a quantitative analysis. FOSS adoption is not primarily to save costs. the company migrated all its servers – about 1500 – to Linux. The analysis below examines certain issues arising from the data available in the cases. are used for this analysis. Even though. of organisations that had adopted FOSS. NIA decided to go wholeheartedly with Linux. A summary of the organisations studied is as follows: Business case of open source18 . After the success of this venture.

per desktop. interoperability. These costs may be one time costs. on purchase of license. 18 out 20 respondents mentioned this as a factor for choosing FOSS. Business case of open source19 . Many mentioned this as helping with administration also. stability etc. however other factors are important for various types of organisation. Commercial software licenses are sold on a per seat. the calculations involved a number of factors.  Security – FOSS products attracted some organisations owing to their security features. This is facilitated by the licensing and distribution aspects of FOSS.  Scalability – Many organisations selected FOSS for scaling up their operations when needed. Some organisations running FOSS on core servers mentioned the mission-critical nature of applications for which the choice of FOSS was made. SIP REPORT The most important reason for adopting FOSS is to reduce costs. security. The factors mentioned are:  Improved performance – This includes aspects of stability. When cost calculations were conducted for FOSS adoption.  License costs are the costs of buying licenses.  No vendor lock-in – This aspect of FOSS implies that the open source nature of the product enabled the client organisation avoid lock-in with a single vendor. operational ease and maintenance. or buying software. Other reasons mentioned for adopting FOSS include improved performance. This is particularly attractive to those adopting FOSS for desktop use. some clearly mentioned that this was not the most important factor. these are mentioned in the table below. or incurred on an annual basis. Cost remains the most important reason. it clearly is an issue that influenced the adoption decision. per concurrent user or per use basis. Although. as a renewable license. Upgrade costs are related to licenses. as these are incurred when software is upgraded to new versions and license charges have to be met. per server.

and it is here that FOSS penetration can be the highest. 18 of the 20 FOSS-using organisations studied for this project used a total of 157731 desktops and 6689 servers. Some licenses prevent distribution. Integration will include modifying data and programs to suitable forms and also training of personnel. Migration may be required for programs also. 48% are using FOSS. where IT is not their main line of business. The server market is also more conscious of the advantages that FOSS provides and competitively evaluates it in light of the other offerings. This is important for FOSS as organisations are acquiring these for the first time and need technical support for running and using the software. SIP REPORT  Service costs are charges for acquiring external or internal support for maintaining the software. and it is where most of the FOSS vendors have also concentrated their sales. and then having it work with existing technology in the organisation. and rarely mission critical. Business case of open source20 . FOSS has commanded a much better competitive position in the server market than in the desktop market. These totals exclude the numbers for the two large commercial firms that are in the IT industry and use a lot of hardware for production purposes.  Integration costs are those incurred while introducing new technology. The desktop market. Of the servers being used. Of the desktops being used. This cost is incurred very rarely by the respondents. such as FOSS.  Distribution costs refer to the savings/expenses incurred while distributing the software within the organisation. There is thus a wide variability in the prices mentioned. Respondents were asked to provide competitive pricing of various software available in both FOSS and in proprietary forms.  Exit costs are incurred when data or programs have to be abandoned and work is required to modify the data/program to new or non-digital forms. and these are shown in the tables below. 86% are using FOSS. The responses are from the perspective of the organisation and unique requirements for which prices were sought. operates largely in the commodity space. The totals reflect the values for organisations that use IT for assisting their internal functioning and operations. It is important to note that these totals cover a very large range of businesses and functions that range from education to e- commerce and defence accounts. in that the requirements of desktop operating systems and application software are not very stringent. and hence the advantages of FOSS are in reducing distribution costs as FOSS can be easily shared.  Migration costs are incurred when data that was created with an old software has to be converted to that which can be used with the new software. on the other hand. particularly when they have to be used on new operating systems.

Availability of trained personnel is an issue. However. provided they are able to do the installation and management themselves. About 50% of the respondents believe that training is an important challenge for FOSS administration. and certification facilities. The following Results were tabulated: Business case of open source21 . availability of trained personnel. many users perceive these prices to be much lower than proprietary servers. as the licensing and upgrade costs are very low. Some commercial FOSS vendors. Administration Issues Data from the cases reveals that amongst the strongest challenges for FOSS administration are – training of personnel. users sometimes download FOSS servers at no cost. we classified them into IT Service company. are zero. although for some of the larger firms this was not important – they are able to attract FOSS-savvy personnel. Also. SIP REPORT Note : Table 5 indicates that prices for most types of FOSS-based servers. FOSS vendors price their products based on the services and additional features they package. Primary Research on Adoption of Open Source from Peer Clients ● Of the Surveyed Client peers’. as seen by respondents. Many also mentioned the lack of training and certification facilities as challenges to FOSS adoption. have specialised servers available at a price. Red Hat for instance. IT Product Company and Others.

SIP REPORT ● We also Surveyed the percentage of Open Source Software usage in each of the client peers and found out the following analysis: Business case of open source22 .

SIP REPORT ● We then found out how that particular client engaged in open source (as a contributor or as a consumer and found the following: Business case of open source23 .

Administrative staff or developers). The following are the results tabulated : Business case of open source24 . SIP REPORT ● We then found the levels wherein Open Source is used by in the organization (Managers.

The results are tabulated as follows: Business case of open source25 . SIP REPORT ● We then found out about the support provided to the users of Open Source Software to judge the costing involved at the macro level and found the following: ● We tried finding out if Open Source is used as a medium for software delivery or used as a tool/provide service only.

The results are as follows: Business case of open source26 . all of the clients used open source and every client peer had some importance of open source. SIP REPORT ● We then tried finding the Importance that this Open Source has for them on a likert scale and analyzed the responses. Surprisingly.

How has Open Source benefitted the organizations’ of client peers: Business case of open source27 . SIP REPORT ● We also tried to find out among the common factors.

SIP REPORT ● License awareness was also surveyed and the following results were found out: Business case of open source28 .

We also found out some concerns people had with Open Source and compiled a small list as follows: Business case of open source29 . SIP REPORT ● Finally.

Processes and Procedures Business case of open source30 . SIP REPORT 5.

they gave developers free access to the source code of many 3D geometry data structures (from volume primitives to surface creation). 3D geological mapping. we provide some case examples of companies with some relationship to open source software. We just hope that these case examples may help the reader to better understand some of the business models related to open source software being used nowadays in Europe. neither the most successful in this respect. SIP REPORT 6. was created to contribute to Open CASCADE and guarantee its smooth operation and Business case of open source31 . as the Open CASCADE product. From a technical point of view. hidden line removal. a new organization. with an installed base of about 130 active customers. Problem framing and Problem solving In this section. For supporting the product. Open CASCADE can input and output using several industry standard formats. using 250 development licences and 1. Matra Datavision: towards an open source business model On December 1999. keep in mind that most of the information in this section has been provided by the involved companies. product design and styling. Open CASCADE is a set of components for the development of technical and scientific modeling applications ranging from CAD/CAM/CAE to metrology and measuring machines. including hundreds of modeling algorithms (such as Boolean operations. and that they are not necessarily the most related to open source. distributed under a LGPL-like licence. Before that announcement. thus ensuring exchange of application data with current software environments. This is in no way an endorsement of the business models of these companies.500 run- time licences worldwide. optical simulation. CASCADE had been marketed using a traditional. encompassing a 50 member development team. proprietary model. When Matra Datavision decide that Open CASCADE was to be distributed under an open source licence. Matra Datavision announced the adoption of an open source strategy for its CASCADE geometric modeling libraries with publication of their source code on the Internet. biomedical software. neither of their products. fillets and chamfers and graphic representation of 2D and 3D objects in an Open GL-based viewer). However.

Make sure that applications developed for specific customers are not falling under that licence and can remain proprietary. Benefits for customers and third parties For customers and other entities in the Open CASCADE market. The importance of this announcement was larger than the importance of the product being made free software. and make sure that they are well accepted by the contributing community. support. An international team of interested developers is needed to ensure the development of the product.  Master the project management and communication tools. These benefits have to be communicated to them. primarily in the automotive. Setup rules (for instance. Customers are companies of many sizes. by extending its user-base.  To focus on standardization and services. Many of these benefits are generic of almost any free software product. The ‘release often and release early’ rule has to be followed. Objectives and key factors According to Matra Datavision.000 customers worldwide. since it was probably the first one in its class made by a large European company (Matra Datavision is a wholly owned subsidiary of Aerospatiale Matra.  Select the right type of licence. they also identified some (in their opinion) key factors. with sales and service teams based principally in Europe and North America. buying the product or services. To fulfill these objectives.  Develop an appealing services portfolio.  To impose Open CASCADE as a de facto standard. including training packages. consulting services. Matra Datavision itself currently supports over 6. so that the real advantages that customers get with free software are perceived. Europe’s second largest aeronautics/defense group). the objectives they were pursuing when they decided to go open source are:  To create a real differentiating factor through publication of the source code. several benefits are perceived. while in accordance with the strategy of the company. SIP REPORT utilization. It is important that it is recognized by the community as an open source licence. consumer product and electromechanical industries. general manufacturing and machinery. so that external developers are rewarded when their work is included in the official version. and not on software publishing. stating that no code will be included in the official version if not properly documented) have to be specified. necessary in order to succeed in the open source market:  Seduce a community of developers. bug reports etc.  Strongly communicate and capitalize on brand image The web site has to be the obvious reference for anyone interested in participating in the project. in case this matters. etc. It is a good idea to select good tools to manage development. aerospace and defence. etc. Companies using it have more control on the product and development process: Business case of open source32 .

 Availability of source code makes many research projects possible. consulting. since large parts of that process are being made with complete openness. All those components are available to the vendor for incorporation into its products. high quality. Even if Matra decides to discontinue the support of the software.  Influence the research and development of the product. third Business case of open source33 . Business model The proposed business model around Open CASCADE is based on the following sources of income:  Provide specialized components as proprietary software. for instance. using the parts of Open CASCADE that they prefer. since the code (and even binary packages ready to install) are available for free. by collaborating in the open development model.  Enhance their application maintainability.  Entities devoted to research and education benefit mainly from the openness of the process:  They are able to completely disseminate and share research results. etc.  They can have an independent specific development strategy in a multi CAD.  Market proprietary components built by third parties. since the software can be studied and tested just by downloading it from the Net. In fact.  Increase their notoriety through the component gallery.  Advantage of the components added by the open source community. and in collaboration with external contributors.  They can influence the research and development of Open CASCADE. SIP REPORT  They can now be sure that their specific development is based on a perennial. Within the Open CASCADE development plans. this is a mixed business model. This is the case.  Low adoption fee. but maintaining their own improvements. the availability of source code ensures that third parties could provide such support. multi platform environment.  Sell services: training. since its source code is available. hot line. where the investment in free software development and maintenance is recovered in part by selling proprietary software based on it or complementing it. As the reader many notice. supported product. it is almost zero. by having knowledge not only of the components they develop. Independent software vendors have a more direct access to the base technology:  Entrance fee is low. when modification of the existing code is necessary. which is usually not possible if they are based on proprietary products. but also from the core components supplied by Matra Datavision. and even participate in it. with a traditional proprietary model.

able to bring new components to the existing open source library or to the proprietary component gallery  Application provider. Each partner can play different roles. Perhaps they are forced to go open source too. not only advantages were perceived. able to download the software and disseminate and support it inside their community while adding value and services. usually supplier of specific applications and often an independent software vendor. and to develop its own specific in-house applications.  Misunderstanding from our service customers. able to download the software.  Business integrator. Since it is no longer possible to sell licences in a traditional way. which could dismiss the competitive advantage of Open CASCADE being the only free software product in its market niche. that have to be defined among the following possibilities :  Generic software provider. In the following years it will be seen whether the Matra Datavision decision of making CASCADE an open source product was a right one.  Main competitors possible reactions. specially due to the ignorance of how the open source model works. Matra Datavision no longer has a monopoly on the product. simultaneously or separately.  Total loss of control over the project.  Components and facilitators provider. SIP REPORT parties have an outstanding importance as partners. in charge of the support and assistance. making it more interesting to potential customers. there is some risk that a third party becomes the preferred source of distribution and services for it. All of those partners should help to improve the collection of products and services around Open CASCADE. Of course. and whether it fulfills its expectations. Some risks where also identified due to the decision to go open source. Since anybody can release improved versions of Open CASCADE.  Generic software user. there is some risk of never getting enough resources to continue development. and providing services for Open CASCADE project implementation. Some (if not all) of them are common to almost any free software project:  Kill the product if the project fails. Business case of open source34 .

the free software movement has already established an indelible mark on the computer industry. This does not mean that "right" and "wrong" mean exactly the same for everyone.include the TEX and LATEX document processing utilities. GCC. Apache. Human beings are equipped with an ability. I will stay away from controversial issues and focus on generally recognized ideas.some having for-a-fee variants too --. simply that everyone possesses a notion of right and wrong. Social. Environmental impact of project Ethical impact : It is useful first to define a basis for this discussion by recalling some principles of ethics. to judge human actions as morally good or bad. Other widely used free tools --. Through these and other products. for a price. One of the most visible results has been the Linux operating system. Ethics is about right and wrong. the dominant Web server. Suggestions and Recommendations 8. Ethical. from a commercial company). a quasi-standard for preparing theses in computer science departments. the FreeBSD operating system kernel. SIP REPORT 7. developed under the leadership of Linus Torvald and nominally available at no cost (although usually installed from a CD obtained. the GNU project's C and C++ compiler. The growth of free software has indeed been remarkable in the past few years. partly innate and partly acquired. a Linux competitor. the EMACS and VIM text editors. Business case of open source35 .

uncounted cases of human misery. The observation works the other way too: bad people can defend good causes. and the destruction of civil society in entire countries. His personal failings do not disqualify the ideas of democracy and freedom any more than the Nazi regime's impressive building of autobahnen disqualifies the merits of freeways. well- intentioned and sincere defenders of a cause is unrelated to the ethical value of that cause. Social Impact : Business case of open source36 . simply a reminder that no idea can be justified on the basis of the quality of its supporters. It should be pointed out. As an example. willing to work even without immediate monetary reward. energy and creativity to free software. It is this pool of enthusiastic contributors. one of the tragedies of the twentieth centuries has been the diversion of the energy and passion of countless honest and idealistic volunteers towards support for Soviet- style communism. a regime that cause tens of millions of deaths. that has led in part to the general feeling of goodwill surrounding the free software community. A corrupt and dishonest politician may sincerely support principles of democracy and freedom. however. that the existence of a community of dedicated. SIP REPORT Perhaps the most striking aspect of this movement is the world-wide availability of often talented software developers willing to contribute their time. This example is obviously not a comparison with the free software community.

Its manufacture and sale generates revenues. FOSS introduces subtle variations in software's role as an intermediate good. Software’s incarnation as a final product too has differences in free and proprietary software. This aspect of software is directly measurable as the revenues and costs incurred by organisations are recorded and accounted for. My learning’s Software as a product. Business case of open source37 . SIP REPORT 9. has a different impact on the economy. and a final good. while its purchase and maintenance entails costs.

The following is a list of criteria that may be used to measure the economic impact of FOSS. but also in terms of the ease and convenience that are possible for distribution across departments. Operating and intangible criteria are derived from usage of FOSS. This software is available as packages. Benefits associated with compatibility with regard to data standards and data governance. This is primary software available as packages such as operating systems or office suites. Benefits associated with being able to distribute the (possibly modified) software within the organisation. and so on. The list includes cost. This has to do with the ease with which software applications can be upgraded across the organisation. Switching costs are usually higher if the lock-in period is longer or more people in the organisation are locked-in to the older system. This benefit is possible if the source code is used by the organisation to tailor the software to its needs. SIP REPORT To measure the economic impact of FOSS it is necessary to account for both the productivity gains incurred as well as the cost reductions achieved by the software. from a proprietary operating system to a free operating system or vice versa) a cost has to be incurred. operating and intangible criteria. and the standardisation and centralised management that is made possible. organisations incur a lock-in to the product and to change to another kind (for example. in most cases. conforms to open data standards that are accepted across the world. It is well known that once a particular kind of primary software is adopted. FOSS. For commercial organisations this could entail competitive advantages over rivals. Cost reductions from upgrading of software as new versions are made available and are installed to meet the needs of new hardware. Benefits associated with easier servicing and upgrade of software. mainly obtained from using zero-price software or lower cost packages. modifying software to meet the needs of the organisation. This is not an exhaustive list. Business case of open source38 . Cost reductions are mainly achieved from the need of not having to install complementary software. Switching costs associated with moving from one type of software to another. Cost reductions achieved from not having to install complementary software such as security and virus protection software. Operating Criteria Benefits associated with being able to customise FOSS to the needs of the organisation. and the managing the multiple versions of software that may begin to creep across the organisation. migrating data to a new format. Cost Criteria Cost reductions achieved from acquiring and installing FOSS. The advantage of FOSS is not only in terms of costs. and assists the primary software although it is not essential that this software be used. This cost is associated with training users on the new software.

It enables organisations and individuals to experiment with. there is less wasted effort due to decisions based on outdated information. Intangible Criteria The culture of sharing defined by FOSS affects the nature of information sharing within organisations. This has a potential to create immense benefits for the organisation and for the society as a whole 10. Stronger involvement can lead to better technical understanding that can increase productivity. This prevents use of restricted or pirated software that has legal implications for organisations. Working with up-to-date information can reduce rework on down-stream artifacts. this implications for society as a whole as it encourages use and proliferation of legal products. It provides a platform for creative formation of software and aggregations of applications. sales. SIP REPORT This helps large organisations ensure their data is accessible and relevant across the world and across functions. tinker with and play around with different combinations of hardware. However. Further. should be more able to constructively participate in the project. This helps with knowledge dissemination and knowledge management within the organisation. more members of the development team will be able to access and contribute to artifacts in all phases of development. • Because many of the tools support incremental releases. nondeveloper stakeholders such as management. and support. Stronger involvement by more stakeholders can help quickly refine requirements and better align expectations. FOSS invariably sensitises people to the licensing issues of software and helps create a sense of responsibility. teams using them should be better able to produce releases early and more often. The peer recognition that employees derive helps to motivate them to further innovate and contribute to the organisation. and smooth hand-offs at key points in the development process. which can increase the satisfaction of internal customers. • Because the “source” to all artifacts is available and up-to-date. Conclusions Drawing conclusions about exactly how usage of these OSS would impact development inside a particular organization would require specific knowledge about that organization. the descriptions above can suggest changes to look for after adoption: • Because the OSS tools are free and support casual use. software and applications. FOSS has immense innovation potential. marketing. • Because causal contributors are supported in the development process. Early releases help manage Business case of open source39 . improve quality.

Bibliography Business case of open source40 . and issue trackers help to cost-effectively support reused components. • Because peer review is addressed by many of the tools. leading to long-term benefits including: accumulation of development knowledge in a durable and accessible form. increased quality and reuse. and improved quality. Inc. A peep into the future 12. • Because many of the tools aim to reduce unlikable work. more development effort should be freed for forward progress. In the short-term. development communities can reduce the administrative and training cost of using powerful tools. and more consistent adoption of the organization’s chosen methodology. • Because CDEs help establish communities. HOWTOs. and increased developer satisfaction are some potential benefits. lower maintenance costs. accessible issue trackers. other projects may more readily evaluate and select these components for reuse. Productivity increases. Expected benefits of increased reuse include faster time-to-market. SourceForge is a trademark of VA Software Corporation 11. Frequent internal releases can have the additional benefit of allowing rapid reaction to changing market demands. SourceCast is a trademark of CollabNet. mailing lists. Peer reviews are generally accepted as an effective complement to testing that can increase product quality. and make secure access to diverse development artifacts practical. faster time-to-market. they offer both short. FAQs. CDEs can reinforce and compound the effects of individual tools. reduce rework. and aid the professional development of team members. SIP REPORT project risk and set expectations. Also. projects may be able to catch more defects in review or conduct more frequent small reviews in reaction to changes. • Because project web sites.and long-term benefits. and CDEs provide access to the status and technical details of reusable components.

SIP REPORT Business case of open source41 .

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