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Issue of January 2003 
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Techscope 2003: Open Source Software
Exploiting the benefits of Linux

The business of software is changing from providing licenses that confer a 'right to use' to delivering technology and services that enable customers to use technology with greater effectiveness. by Javed Tapia

Open source is a disruptive technology. Disruptive technologies change our relationship to the world—how we travel, communicate, and work. The railroad was a disruptive technology to the horse and carriage; the automobile to the steam engine. Technologies that don't evolve, disappear.

We believe the proprietary software development model is a horse and carriage whose time has come and gone.
The business of software is changing from providing licenses that confer a 'right to use' to delivering technology and services that enable customers to use technology with greater effectiveness. In the past, too many software packages became 'shelfware' for the customer, because vendors focused on selling the license. In the Open Source model the focus is on providing high value technology and services to customers. Open Source vendors provide these more effectively because their technology development model is more scalable and their business focus is customer service, not technology licensing.

Red Hat software is the distributor of the open-source Linux operating system. Although in the past few years there has been considerable hype concerning Linux, we do think that Linux represents a compelling technology for use in server and desktop applications. Recently we have seen a significant up-tick in the enterprise use of Linux as a server operating system, a result of server consolidation and Linux's lower total cost of ownership (TCO).

Linux, the open-source operating system, is now running on powerful government computer systems, and technology giants are increasingly providing support. Linux is also being looked at for large high-end processing applications. CSFB, a leading investment bank, migrated a large financial trading application from Unix to Linux to achieve significant performance enhancements. Linux is running on several Air Force computers, along with systems run by the Marine Corps, the Naval Research Laboratory and others.

There are potentially significant benefits to the customers of Open Source. One of the benefits that open-source customers derive from the licensing terms of the software is the ability to access and modify source code. This can be beneficial to those who need changes made to the software.

Another benefit to customers is a lower TCO partly due to reduced licensing costs, because open-source software is generally provided at a low cost. However, another factor in open-source software's cost is the ability to run the software on commodity-level hardware. This helps to reduce costs by allowing customers to work with numerous hardware vendors to obtain beneficial pricing. It also allows customers to recycle unused hardware or
access unused capacity on existing hardware.

Backed by expert support, Linux is inexpensive and can be easily customized to meet specific operating needs. On the enterprise front, Linux remains an ideal choice for IT Managers, as it allows them to confront their daily tasks with much greater reliability. Servers running Linux have been known to run for months, even years together without needing to reboot. Affordability is another factor. Even though the initial price of the Linux software puts it in a class by itself, initial price isn't the only consideration. Ongoing operational expenses, licensing fees, and support costs can make initial costs seem insignificant. The open source code makes Linux simple to administer; users have no licensing fees to contend with, and support means getting in touch with experts, seeking help from the Linux community, or fixing it on your own through the open source code.

Control comes next. Because Linux resembles Unix, many administrators find the transition to Linux an easy and welcome one. With source code in hand, you can modify the operating systems you deploy for maximum memory
efficiency or individual user preference.

Support is not available in an organized manner. Companies like Red Hat offer their own support initiatives. Red Hat Network, is an Internet service for software delivery, support and management. It's the pipeline that lets customers tap into real-time open source innovation. To date it has delivered five million software packages to more than 300,000 Linux servers. Red Hat business model revolves around providing consultancy, support and engineering services to customers on a professional basis.

From the small and medium-sized businesses point of view, Linux goes hand-in-hand with building a business and providing a computing solution that grows with the business, especially in the case of Internet-oriented organizations that demand speed, flexibility, and reliability. A new business venture/service provider may want to put up a company website, or create a corporate intranet, and the budgets may be tight. The efficiency of Linux takes care of the same. It also enables the reuse of old computers as more-than-capable Linux Web, e-mail and print servers. But that's not all. As the company grows, Linux proves its flexibility as one can cluster a number of Linux servers together to create an efficient server solution.

A study by WR Hambrecht predicts revenue from the market for Linux products and services is expected to explode with a compounded annual growth rate of 90 percent growing from $2 billion in 2000 to over $12
billion in 2003.

Linux enjoys the support of many of the world's largest and most powerful computing companies, including Oracle, IBM, Sun, HP, Silicon Graphics, Veritas, CA, Checkpoint, Legato, Trend Micro, command and so on—all of whom have contributed significantly to improve Linux.

Linux is increasingly becoming a platform of choice for ISVs and there is a whole gamut of applications available on Linux for all purposes.

Open source software is for free. This is a myth which is very often exploited by the critics of Open Source to justify that the cost of maintaining an Open Source system is equal to the cost of licensed software in the long run. Nothing in life is free and if it is, then it isn't worth it. Open Source software has a cost associated with it but despite what its critics may say, it costs far less to support, maintain and upgrade. If one vendor charges too much, the customer is free to select another vendor without any proprietary lock-in. In this kind of competitive situation,
costs have to be reasonable and market-driven.

Linux has started to become a mainstream operating system in all sizes of organizations, in all markets, worldwide. Linux has moved up in the value-chain and crossed the chasm. It has become a potent environment for some business critical applications like database, clustering solutions, ERP, SCM and so on. The reliability, stability and ease with which the software can be customized, installed and operated is quite appealing to organizations. The fact that many application development and deployment, middleware, server-ware and application products are freely available on the platform helps as well.

Specifically in the Indian context, enterprises are warming up to the idea of moving to Open Source technologies. They have understood the benefits it has to offer and have decided that they need to have the freedom of choice.

The writer is Director, Red Hat India

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