Tuesday, April 07, 2009

Good Summary of Proprietary Versus Open Source

From Paul Ramsey's Blog comes a link to an arcticle entitles Open Source and Software Procurement.

Paul like one part of the article, but I like it for another part. The part I like explained the difference between the up-front license cost of software versus the implementation/customization cost.

Here is the part I liked:

One thing he said that suddenly made the bulb above my head light was to do with procurement. At Netsight, we pretty much gave up on responding to blind tenders we were sent many years ago due to the overhead of responding to them. Not just that but we always thought that the tenders generally asked 'the wrong questions' which made it very hard for us, as an Open Source implementation company, to really give a decent answer. Many of you, no doubt, will be familiar with this scenario as an example: The tender has a cost table you have to fill in the blanks in. You are not allowed to deviate from the format of the table (because the tenderer wants to try and compare apples with apples). So you fill the table in, but your numbers just don't quite fit in the boxes right. We've even had feedback from tenders we've lost saying things like 'Well your solution costs 0 for licensing and 50K for implementation; the solution we chose cost 40K in licensing and 30K in implementation, so must be the more appropriate solution for our needs'.

Now I can see their thinking here. Our solution cost 50K and 100% of the cost is in implementation/customisation so obviously wasn't the correct solution to start with. The one they chose cost 70K but only 42% of that was implementation/customisation. What they don't realise that (especially in the CMS market) any large software procurement is only going to give you a fraction of your requirements out of the box. That is because every business is different, and so no one piece of software can do everything you need. Open Source might give you slightly less out of the box than a commercial offering, but that is generally because Open Source software focusses on delivering a lowest common denominator out of the box, whereas commercial software has loads of bells and whistles (many of which you will never need), but more on that later. You are still going to need professional services to tailor the software to your specific business and its requirements. The problem is looking at ratio of costs and the perception of these ratios.


The Sunburned Surveyor

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