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Why Buy Proprietary Software?

Originally published October 19, 2006


It's always a hard sell when the competition is giving it away. The open source movement has long posed a theoretical threat to proprietary software vendors in all markets. The threat becomes more real as venture capital is increasingly drawn to commercial open source startups actively competing against proprietary software vendors.

Back before most executives had heard about Linux or open source software, IT professionals needed ammunition to make a case for giving free software a try. For example, David A. Wheeler compiled an excellent summary of arguments in favor of open source software in: “Why Open Source Software/Free Software (OSS/FS, FLOSS or FOSS)? Look at the Numbers!”

There are still some managers who must be convinced that no-cost open source software can save them money. However, as open source vendors garner more attention, the key question is changing from “Why open source?” to “Why not open source?” That's bad news for proprietary software vendors, who increasingly face customers asking why they should pay for proprietary software licenses.

Microsoft, the leading vendor of proprietary software, has responded to the open source threat with their strategy of “Fear, Uncertainty and Doubt,” also known as FUD. Open source software uses a different license, and anyone can look at the source code, so you've got to be very, very worried.

However, this brute force restatement of the corporate aphorism “No one ever gets fired for buying IBM hardware” into “No one ever got fired for buying Windows” is not the only way to justify the continued reliance on proprietary software. First, a look at Microsoft's arguments, then a more reasonable approach.

Fear, Uncertainty and Doubt
In 2004, Microsoft launched its “Get the Facts” site to give their customers “the facts” about the advantages of Windows over Linux. This is where you can choose from a wide variety of white papers and case studies that Microsoft offers to support their argument that Windows is better than Linux.

The fundamental argument for Windows is based on six main points:

  • Total cost of ownership (TCO)
  • Reliability
  • Security
  • Intellectual property indemnification
  • Performance
  • Interoperability

Right at the top of the list is TCO. TCO as a concept was created in 1987 by Gartner and was first applied to desktop systems. In other words, Windows versus the alternatives – plus ça change, plus c'est la même chose. If you accept the evidence presented here, the total cost of running Windows is lower than Linux when you factor in all costs – the price of the license as well as support, training, salaries for support staff, the staff time expended on administering systems, installing patches, and so on and on.

The material published on the “Get the Facts” site is fascinating, and well worth the time it takes to download and study. What is also interesting is the way that the site's editors present summaries of those reports, cherry-picking quotes and statistics that favor Windows.

Consider the headline for a report titled “Concentrating on Windows Platform Leads to Financial Health for VAPs and VARs.”

According to the summary, the Microsoft-commissioned study “uncovered a strong relationship between concentrating on the Windows platform and financial success.” In other words, if your business concentrates on the Windows platform, it will be more profitable. What they don't mention is that the VAPs/VARs were divided into three categories. Those deriving less than 75% of their revenue for Windows had a “Light” Windows focus, 75 to 95% were “Moderate” and 95% or more were “Strong.” It makes sense that splitting your focus between Windows and other platforms might affect profitability, but it's not clear from the research results that companies with a “Strong” focus on Linux platforms were less profitable than those with an equally strong focus on Windows.

To summarize, Microsoft claims that Linux is:

  • More expensive, if you figure in all the expenses
  • Less reliable
  • Less secure, because even crackers can look at the source code
  • Riskier, because users might get sued over intellectual property issues
  • Slower and less efficient than Windows Server
  • Not as interoperable as Windows Server

While these are all issues that should be considered when evaluating software of any type, they are far from the only valid issues that must be addressed when evaluating commercial open source software to replace proprietary solutions.

Another Approach
Another, more rational approach, is to compare open source and proprietary solutions on their relative merits instead of acting on emotions such as fear, uncertainty and doubt. Of course, there are issues related to fundamental differences between open source software and closed source software, but closed source vendors shouldn't panic and try to play on customers' fears when they can be equally successful by treating open source competitors as they treat any other competitor.

If you are responsible for choosing a software product whether for internal use or for resale, whether open source or closed source, you've got to examine each product on its own merits in three broad categories: product, support and vendor.

Whatever software you buy must be evaluated on its own merits. That means not just what it does, but things such as how well it works, on what platforms it works, how interoperable is it, how secure it is, how reliable it is, and whether or not it solves your problems and meets your needs. No matter how great a software product is, it must work in your environment with your legacy systems.

This is the category into which software licensing falls, as does the openness or proprietariness of the source code. In some cases, license provisions are relatively unimportant (for example, for software purchased for internal desktop applications that are not meant to be copied or modified). In others, the license terms are very important, as when the software is being purchased for resale in some form.

Microsoft's TCO belongs here as well. Yes, there will be some cost that can be attributed to switching to a new vendor, and there will be ongoing costs associated with using, supporting and selling the new product; and in some cases, those ongoing costs will far exceed any short-term savings on license fees. And in other cases, they won't. Again, it is important to compare products fairly, on their own merits.

Support means far more than having a call center to take user support questions. It includes everything from having an extensive network of branch offices, partners and resellers to certification and other training programs to user groups and industry conferences – even the ability to support internal research and development labs.

Just as you compare products on their features and performance, you also compare vendors on the quality and quantity of their support infrastructure.

Although it is necessary to compare software products on their merits and on the merits of the support infrastructure that goes along with them, it is not sufficient. Even if a pair of competing vendors provide similar levels of service for software that is functionally identical, they will differ in other ways. One may be an established, publicly traded corporation, the other may be a small startup with a few million dollars in VC financing. One may have a reputation for delivering quality products at fair prices, the other may have no reputation at all. One may be teetering on the edge of bankruptcy, the other may reliably generate profits year after year.

Sales and marketing professionals in every area are in the business of fostering emotional responses in the minds of their customers and audiences, and the proprietary software industry is no different. It is much easier to spread fear, uncertainty and doubt in the minds of software buyers than to take a rational and logical approach to competing against open source software on their own merits.

However, as open source software becomes more common in business and enterprise applications, it will also become less “strange” or “exotic.” And that means executives choosing among proprietary and open source vendors will be better equipped to make an informed and appropriate decision.

  • Pete LoshinPete Loshin

    Pete is Founder of Internet-Standard.com, an open source and open standard computing consultancy providing technology assessment, needs analysis and transition planning services for organizations seeking alternatives to commercial software. Pete has written 20 books, including “TCP/IP Clearly Explained” 4th Edition, Morgan Kaufmann, 2003) and “IPv6 : Theory, Protocol, and Practice,” 2nd Edition (Morgan Kaufmann, 2004).

    Pete can be reached at pete@loshin.com or at 781. 859.9175.

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