Can We Really Run Our Businesses On Open Source Software

Editor's Notes

• #2: Thank you Rich…It’s a real pleasure for me to be here in Miami – especially while the rest of the country is in the deep freezeAnd an honor to get to kick off this year’s IT Expo conferenceFor those of you that don’t know Digium, we are the sponsor and maintainer of the world’s most popular OS communications project Asterisk.And as such – we’ll clearly in the thick of the open source movement – and I suspect many of you here are open source users as well.Over the past few years open source has transitioned from a heritage where the image was possibly a little scary for a corporate IT manager. However, today open source has become very main stream – and I’d like to spend some time talking about running your company on open source. And I’m not talking about as a niche application here and there – I want to address the question – can we really Run our business on open source software. So, let’s take a look at answering that question.
• #4: Maybe before we dig into the answer ,.. We should ask why one would want to do this …Gartner says - survey results suggest that Saving Money is the #1 reason IT managers embrace open source- The Standish group suggests that open source software has resulted in savings of about $60B per year You know $20B here, $20B there – and sooner or alter your talking big money!Garter says the #2 reason IT managers embrace open source is to protect against a vendor ‘owning’ the infrastructure- And the #3 reason is Ease of Customization- I had the pleasure of meeting and speaking with Mark Penn last week – who is the author of Microtrends Many of the trends he identifies in the book are really about our country’s move to personalization … The internet has enabled suppliers to reach small groups (1M) of specific demand … and open source is the ultimate enabler of personalization …
• #5: Over the past few years Open Source has been the victim of fear uncertainty and doubt - often at the hands of proprietary software vendors, so maybe it’s worth doing a level set on what Open Source is, and taking a look at current open source adoption trends. So, Open Source is ….Computer software that is ….Normally delivered under a license …Is often developed in a collaborative manner- and often meets the requirements of the Open Source Definition - created and maintained by the Open Source Initiative
• #6: To meet the open source definition … a software license must …Requires the source code to be made available Demands license terms must apply to all Permits Derived Works Requires free redistribution (as in speech) Does not restrict other software Does Not discriminate based upon technology, users, field of endeavor, or product application
• #7: There are multiples types of open source softwareThe most common is Free and Open SourceHowever, over the past couple of years, there’s been an explosion in the COSS marketMany open source projects are available under a so called dual license …
• #8: Some people think of companies having an Open Source Business Model … however, Open Source is NOT a business model….Open Source describes a development model – which is often described as Peer developmentCompanies that sponsor an open source project often give away open source code in hopes of generating demand for their commercial offerings – which means open source software can be used as a marketing model …But, open source is not a business model.
• #10: Today you can find OSS alternatives to almost any software need…Operating SystemsServer Side solutionsClient Side Solutions-
• #11: From Front End Systems to Back end systemsFrom Web servers to ERP systems,From database engines to Voice Over IP solutions,From games to security solutions,From networking to storage solutionsAddressing almost any software need you can image … and everything in betweenAnd these projects listed are just a fraction of the hundreds of apps available on SourceForge.net – the most popular repository for open source downloads
• #12: Some open source applications have achieved market leading share in their respective category – and others, while not market leading, are still very impressiveEstimates suggest that …Linux controls over 20% of the server OS marketFirefox controls over 20% of the web browser marketApache controls over 60% of the web server marketAnd Asterisk reportedly claimed over 18% of new VoIP endpoints installedSo, we’re not just talking niche adoption, we’re talking adoption on a mass scale …
• #13: So, if OSS is really penetrating end users of all types – who’s using Open Source? Gartner says open source spans the gamut and is being adopted by businesses of all size .
• #14: In fact Gartner says that 85% of organizations surveyed use OSS is some way. But not only are organizations of all sizes utilizing OSS – but it’s adoption spans industries of all types and applications of all types – including both mission critical and non-mission critical implementations
• #16: In fact, some of the worlds biggest organizations are users of OSSDrupalAlfrescoSugarCRMMagentoCommerceZen
• #17: Not only does OSS power the worlds biggest companies – but – maybe even more importantly, it also powers the products from a company called Zynga.  Zynga is the the game company behind Farmville, Mafia Wars, Fishville, etc.   John Doerr of Kleiner, Perkins fame saidZynga is the most-profitable, fastest-growing company that Kleiner Perkins has ever invested in. Just three years old, Zynga has an estimated market value above $5 billion, more than 320 million registered users, 1,300 employees and estimated revenues this year above $500 million. Zynga products – are built using open source. 
• #18: However, you probably didn’t come here to learn about game technology – so let’s look at some real world case studies of how organizations of all sizes are benefitting from open source software
• #19: Because most open source software is free (as in beer) – Open Source actually penetrates one segment of the market rarely addressed by proprietary implementations – which is reflected in our first caser study – which is a Humanitarian Relief effort. Because there are very talented and capable volunteers out there willing to help in the time of crisis, OSS fits perfectly into humanitarian relief efforts because it allows the volunteers to use their cash donations in ways other than purchasing software, then they use their own skill in constructing a solution to address the crisis at hand …Case in point, following the earthquake in Haiti in Jan of 2010 ,,,,
• #20: And project called called ReleAnmwe (loosely translated Haitian meaning ‘Cried Out’ – where the project organizers used OSS software to quickly and inexpensively create a system that enabled individuals to reach emergency services (hospital, pharmacies, food, shelter and distribution centers)OSS communications and speech recognition software, including Asterisk and Cepstral, Verbio and others allowed the developed of a communications system that allowed callers to receive info in their native language – and the speech rec permitted those with injuries to use the system
• #21: In a similar vein, not-for-profit organizations are adopting OSS for similar reason. One such organization is Inveneo …Inveneo is addressing the challenge that over 1B people are without access to clean water, electricity – or communicartions
• #22: Inveneo is using OSS software and solar powered PCs, to build a basic computing and communications capability for remote villages. The project has been successful in improving the quality of life for the inhabitants of these villages, by improving their access to medial care and education – and in one example, helping the villages to protect themselves by simply being able to receive warnings of advancing rebel forces.
• #23: Now, while those case studies are both very meaningful in terms of their impact on helping to make the world a better place – most of you are here to understand how you can make you company a better place.So, I’d like to review some case studies where OSS is being adopted by business of all sort.And I couldn’t come up with a better smb case study than Digium. So, Can you lower the cost of running the IT infrastructure of a small to mid sized, growing company, by using predominately Open Source Software?Well, it turns out that Yes You Can
• #24: In Digium’s case, we’re a mid sized company by most definitions – and while we are an OSS company – we don’t have an OSS edict in our IT philosophy – even though we do have a OSS preference.
• #25: While we’ve not done an extensive study on what the total savings have been as a result of our use of OSS software, our educated guess yields numbers in the several hundreds of thousands of dollars. The savings apply not just on the backend systems, but also to our desktop strategy, and our engineering development efforts, Today the most popular desktop operating system within Digium is Linux, the most popular productivity suite is Open Office. Our entire company runs on the Zimbra collaboration suite. The most popular web brower is Firefox – and we’re in a migration where Android either is or is becoming the most popular Mobile OS.
• #26: You might envision that we run the entire company on an Asterisk-based PBX, and we make extensive use of OSS in all areas of our corporate IT infrastructure. Our web site, both front end and back end runs on OSS, our chat server, business intelligence, knowledgebase, and elements of our ERP system are powered by OS software. Many of our systems run on an open source virtualization engine – and we even utilize open source tools to monitor the health and document the topography of our internal networks.
• #27: Open source is used extensively in our R&D department, where we use open source tools and systems to help develop, track, manage, and maintain the development of Digium products – and we make sure of open source scripting languages to help improve the efficiency in writing open source software.So, do we have any proprietary software in use at Digium – in fact we do – but it’s the exception rather than the rule.
• #28: So, if you can run a mid sized business on OSS – can you run an Enterprise size business on OSS? Well, turns out the answer is yes you can
• #29: The operators of the London Stock Exchange migrated from a commercial product, TradElect,a system that is Microsoft .Net based. However, what’s interesting about this case study is the way LSE went about the project. Given the $65M price tag for TradElect, the LSE bought MilliniumIT – a Sri Lanka based consulting company, and commissioned them to build and maintain the new system using OSS – and now estimate they are saving roughly 10 million pounds per year. Not only are they saving money – but now making changes to the system is in their own hands – and Trading speeds went from 2.7 milliseconds to 0.4 milliseconds per trade.
• #30: So, if you can run a large company on Open Source Software, can you run a large city on OSS. Well, Turns out Yes you Can, the city of Amsterdam is doing it today!
• #31: Amsterdam might be viewed as a very progressive city – but usually for reasons other than those that are IT related. However, in the world of IT they are very progressive there too. They set out to move as many proprietary applications as practical to OSS based alternatives. Today they are in the process of converting nearly 30,000 city desktops to OSS – including the Operating System – the typical desktop productivity packages, and the phone system. They are estimating millions of euros in yearly savings.
• #32: So, if you can run a city on OSS – could you run an entire island on OSS? Well, turns out that ‘ Yes You Can!’The island of Nuie is a very small island in the south pacific – and it is a LONG way for anywhere. There is no GSM service provider there – and the inhabitants of the island wanted a mobile communication system.
• #33: So, a small group of consultants developed, installed, and made operational a wireless infrastructure were each inhabitant received a mobile phone, and using OSS software like OpenBTS and Asterisk – built a system that provided connectivity for everyone on the island. Since the system is built on off the shelf hardware, open source software, the the inhabitants have copies of the source code – the system can easily be recreated in case of disaster – like a Hurricane. They are in the south Pacific afterall.
• #34: So, if you can run a island on OSS – could you run an entire country on OSS? Well, turns out that ‘ Yes You Can!’
• #35: Malaysian government today has targets of 80% adoption for backend and 30% for desktop adoption – but by 2010 had remarkably hit 97% adoption
• #36: And others are following suit. Russian Prime Minister, Vladimir Putin, issued an order in 2010 that all Russian federal bodies and agencies switch to free and/or open source software by 2015And, there are those that believe the US Government should do the same thing. Open Source for America is an industry group advocating open source adoption in the US federal government
• #37: So, if the software if free, does that mean it doesn’t cost anything?
• #38: Well of course not. What’s free is the software acquisition cost – but that’s only a portion of the total cost of any software project.
• #39: TCO normally includes acquisition cost, hardware cost, training costs, system adminstration/development/configuration/customiation costs and ongoing maintenance/support
• #40: The OSS model normally eliminates Software acquisition cost – potentially reduces hardware cost given that off-the-shelf hardware is typically used, and can significantly reduce on-going maintenance costs – or at least change the maintenance model.OSS does typically transfer some of the responsibility that normally falls on a vendor – to the user of the software. Therefore, internal administration costs typically go up.
• #41: So, if that’s the case, what type of organizations benefit most from OSS. It’s those with in-house skill and expertise, like technology companies, larger organizations that have the benefit of lots of employees – like Enterprise and Government agencies , and those organizations that have access to talent at low costs – like UniversitiesOSS is often a very attractive alternative in cases where the application that’s being replaced comes with per-user licensing fees
• #42: So, does that mean that other organizations that don’t fit this profile can’t benefit from OSS? Well, NO it doesn’t. This is where the COSS model makes sense. If you are a smaller organization – or don’t have the in-house skill – or the desire to apply your in-house skill to creating or maintaining an OSS solution – you can still gain benefit from the OSS model by purchasing the service or in some case a product under a COSS arrangement. There are a number of COSS products and services on the market. In Digium’s case, we package a IP PBX based upon Asterisk as a turn-key solution – a product that’s sold under the brand name of Switchvox. And many other OSS organizations do the same.
• #43: So, it’s virtually impossible to make a cost comparison analysis with specific numbers that can apply in broad-based situations – each company, each project will require it’s on dedicated TCO analysis to make an informed decision. However, you can generically relate the relative costs of Free and Open Source, Commercial open Source, and Proprietary alternatives. In our experience, from a TCO perspective, proprietary solutions are typically the most expensive – and the characteristics of you own company’s structure and internal capabilities dictates whether or not traditional open source or commercial open source alternatives will produce the lowest cost for you.
• #44: Ok – hopefully by now I have convinced you that the open source train is rolling. But if your company is not yet on the train – how do you get started? Gartner interviewed a host of companies that had recently adopted open source and asked what they wish they had done differently.The two most common answers were one …- that they wish they had spent more time up front understanding the different open source licenses- And two – that they wish they created a policy ahead of time – and used in making their decisions along the way
• #45: Some of the most popular OSS licenses include the GPL (GNU Public License) (GNU = GNU not Unix) version 2 and 3 – the Lesser GPL (often applied to libraries) the Apache license, the Mozilla Public License, and many others. Understanding the license requirements is important – but most licenses are much more permissive if your not planning to redistribute the software.
• #46: So, how do you learn from their mistakes?With regard to license issues, there are a number of on-line resources that will help you understand the obligations and restrictions of the popular OSS licenses. Opensource.org – gnu.org – are both good resources – and there’s even a consulting company that will help you sort this out – who has some helpful on-line tools – called Protecode. There are also a number of lawyers that now specialize in OSS licenses.
• #47: To address the policy issues – Gartner suggest that you develop a use policy – and once again there are on-line resources to help with this, and then adhere to the policy, train your in-house resources on the policy, and use tools to track your source code portfolio – which by the way there are open source tools to do this with – and then periodically review completed projects for compliance with the policy.
• #48: So, in summary – if you’re just getting started – thendive in and determine the best method for your organization to benefit from open source- spend some time to understand OSS licensing- develop a use policy- carefully consider the success and adoption of any open source application you considerIn areas where you need supplement talent – consider COSS to augment you internal capabilities
• #49: WelcomeThanksGreat time to be in MiamiHere to discuss the question ….