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Wednesday, 28 November 2007 18:39

In the black: Why Linux makes financial sense

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Last week I touched on some Microsoft backflipping over Total Cost of Ownership (TCO) when it comes to Linux. It had been claimed that although Linux was a free operating system, Windows had a lower overall cost with all factors considered due to its greater ease of administration. Yet, this is no longer the case, with Microsoft’s server line now using a Bash-inspired command line system called PowerShell.
Not only is PowerShell somewhat cryptic, it’s brand new to all the legions of Windows admins who fumbled their way through installation wizards by clicking ‘Next’ each step of the way. I’d be willing to wager there are more Bash-savvy Linux admins than PowerShell-competent Windows admins, totally exploding the Microsoft line over which OS is easier to manage.

Anyhow, you can read about it here. I received positive feedback on this point, with some asking me to talk more on TCO – particularly, young, smart IT professionals who could see opportunities to rationalise their organisation’s server farm but needed ammunition when it comes to dealing with the board and persuading them a switch to Linux is risk-averse and cost-effective.

So, happy to oblige, here’s some views on why Linux isn’t just technically smart, but also a sensible business option too. These should help you put forth a case that will keep your chief financial officer happy. Preferably, it’ll also keep him away, too. I don’t know about your CFO, but mine bugs IT for help to change batteries and even requires instructions taped to the wall explaining how to fax. My tongue-in-cheek “Step 1: put document in machine. Step 2: dial number. Step 3: press big button” was perversely lauded as a masterpiece of concise precision.
The first thing to note is that TCO is a term bandied about but yet often with meaningless arguments. Regularly you’ll find advertising pamphlets which list a bunch of pros and cons about a product and its competitor, but the points aren’t necessarily relevant or meaningful. This isn’t restricted to technology; I saw a car brochure which listed among its standout features compared to the opposition that it was “Swiss designed.” Now, although it may well be a fact the vehicle was designed by the Swiss, I didn’t see why this was necessarily a feature or benefit over another type of car designed elsewhere. Perhaps I am showing my ignorance of all things mechanical here, but I can’t imagine making a list of car features I want and putting “Swiss designed” up the top - but I might put “anti-lock brakes” if I felt that was important to me.

So too, when a business selects technology it ought to be based on what the company’s business processes and requirements actually are. The technology choices need to support the way the company operates and what it needs; just like there’s only one election opinion poll that matters, this is the only list of features that matters.

Whilst previously working at a University, I attended a series of presentations by IT students engaging in their real-world group project.


Time after time I noticed the group would cite as recommendations for the business they had been working with that “they use Office 2000, we suggest upgrading to Office 2003” (or, now, 2007.)

Yet, why? Sure, everyone likes to have the latest software. But I found this recommendation to be fairly lazy; there was no genuine business reason cited, nor any actual need demonstrated.

An example of a valid reason for upgrading might simply be that the organisation receives a lot of external documents from its customers and vendors and these are often in newer versions of Microsoft Word or Excel, and therefore the company was finding it received documents that more and more frequently were not supported by its existing software.

This doesn’t mean the solution is necessarily to upgrade those products as opposed to finding an alternative, but at least the need has been demonstrated for something better than what is presently in place. And this is where TCO really ought to begin.

Once the need has been demonstrated, you must then determine several options that fulfil the requirements. The first and most obvious option to many is to upgrade the products to their latest release. Yet, what if the operating system is an older version of Windows? Office 2007 may not be installable. And what if the hardware is substandard for upgrading to a new version of Microsoft Windows?

The offhand statement recommending simply that Office be upgraded had a raft of potentially costly ramifications which were not thought out.

Explain it to your CFO in their language: “One strong financial reason to avoid Microsoft Windows is that you do not know what financial impacts it will have over the life of the implementation, and nor can you control what that lifespan will be.”

In simple terms, committing to a platform is not just a one-off OS purchase. It will require additional outlay to maintain the currency of applications, with increasing requirements. It will require additional fees to increase license counts as staff numbers rise.

Veering away from open source momentarily, an example is the BlackBerry smartphone. I’ve succumbed to the crackberry’s allure and I could never entertain using a Windows Mobile handheld for my e-mail. Even without considering technical aspects, the BlackBerry is a known financial proposition. Research in Motion (RIM) have obtained favourable data pricing deals with telcos – in Australia, business users pay a flat monthly fee irrespective of the volume of data. This contrasts widely with Windows Mobile which has no such flat deal, and nor is it likely to ever have one, because of the lack of compression and the size of its rich-formatted messages. Consequently, a company can have full assurance their monthly BlackBerry bill will be a known value but there are no such guarantees about a Windows Mobile device.

Back to computing, the major ongoing financial impact in computing is undoubtedly licensing. Many large software providers – and I’m specifically thinking of one in Redmond – have software licensing schemes which are so convoluted that a good deal of their customers don’t really understand what rights they have purchased.


This may not even be anything new, but the enforcement mechanisms – such as activation and Windows Genuine Advantage (WGA) – are being ramped up such that any enterprise which isn’t compliant is likely to experience difficulties somewhere along the line. It’s not possible to keep, inadvertently of course, re-using the same serial key over and above its legitimate installation count.

That’s not to say these anti-piracy mechanisms only hurt the guilty. Imagine you have a product which depends on Windows XP. In time, it will no longer be possible to purchase that operating system. Today, you can genuinely buy a new computer and even if it comes with Windows Vista you may also purchase Windows XP and install it on the machine. The time is coming when this will not be possible; nobody will sell you a Windows XP license – and this in turn impacts your use of the critical line-of-business app.

The problem just worsens: IT staff will need to support a mixture of Windows versions, including developing multiple standard operating environments. To achieve a homogeneous network, you will need to upgrade all the computers to Windows Vista, which means – particularly for a small company – a significant financial expense has been incurred, driven solely by the licensing oddities of a software vendor.

Irrespective of what you may think about Windows Vista, it is reasonable to say that such costs should not be driven by a technology vendor. Instead, the business ought to be finding vendors and systems which serve its needs.

Here’s where Linux comes in as a viable option. In our particular examples, the requirement for a wider range of supported document formats is met with Open Office without a corresponding price tag, particularly with far less likelihood that any additional hardware is required.

Additionally, the right to use any specific version of any Linux distro is irrevocable. Once again, while upgrading to newer software is desirable, the fact is a company can settle on a precise platform and retain control over when they elect to upgrade no matter how many new computer systems are purchased in the meantime. The one and the same Linux CD or DVD can be used repeatedly on computer after computer without any fear of violating the licensing.

Let’s consider one more point: Microsoft raised the notion that a good Windows admin is easier to find and less expensive than a good Linux admin. These may or may not be true; however, even if we take Microsoft’s word, it is definitely fair to say a Linux system requires less administration. There are less reboots required, less crashes and what’s more, due to its built-in encouragement and endorsement for automation, Linux admins are likely able to be more productive across more machines than a similarly competent Windows person.

In a similar fashion, Linux does not – depending on context – require anti-virus or remote administration software. There are certain symbiotic Windows add-ons which Linux simply does not require whatsoever – again, all with a pricetag attached.

So there you have it; here’s some lines of thought to get your brain germinating on selling Linux to your company as a smart business move.

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David M Williams

David has been computing since 1984 where he instantly gravitated to the family Commodore 64. He completed a Bachelor of Computer Science degree from 1990 to 1992, commencing full-time employment as a systems analyst at the end of that year. David subsequently worked as a UNIX Systems Manager, Asia-Pacific technical specialist for an international software company, Business Analyst, IT Manager, and other roles. David has been the Chief Information Officer for national public companies since 2007, delivering IT knowledge and business acumen, seeking to transform the industries within which he works. David is also involved in the user group community, the Australian Computer Society technical advisory boards, and education.

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