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Execs weigh open source, virtualization

Posted on: February 24, 2009

By Anna Valmero
First Posted 12:23:00 10/29/2008

Filed Under: Technology (general), Software, Computing & Information Technology

MANILA, Philippines — How do you do more with less spending on information technology?

Going open source and adopting virtualization are ways for companies to reduce IT spending and eventually achieve innovation, executives from information technology firms said.

“Going open source in IT means significant savings for companies in terms of license fees since the code comes free,” said UR Solutions general manager Patrick Reidenbach said during a Computer World Executive Briefing.

For example, total cost of ownership is 5 to 10 times cheaper when using open source solutions than proprietary offerings.

Meanwhile, virtualization can allow enterprises to multiply its existing hardware, said Edwin Chua, ASEAN regional business manager of Red Hat Asia Pacific Pte Ltd.

He said virtualization is a good option for businesses with growing IT needs to scale its current infrastructure cost effectively.

Open source is now a solution that large enterprises consider. What used to be a geeky programmer’s project is today a cost-effective IT choice for small, medium and big companies. Five years ago, SMEs were the target for open source solutions. Today, big companies in the telecommunications, finance and government sectors are using open source solutions.

Deploying open source solutions entail significant benefits, Reidenbach pointed out.

Unlike proprietary IT offerings, open source software, for example in IT security, does not require license fees since the code is free.

“Open source development is community-driven and is powered by tens of thousands of developers worldwide who further test, debug and enhance the code,” Reidenback said. “It offers transparency, as in the case of an open hand unlike a proprietary code that is like a closed fist.”

Thus open source software has better if not superior code, fewer bugs and is more attuned to the needs of a user community compared to proprietary products, he said.

Open source solutions continue to evolve, as it takes on a commercial proposition in which companies offer to support the use of open software via subscription services, as in the case of UR Solutions and Red Hat.

“There is no such thing as free beer,” Reidenbach said. “The freedom in open source software involves using the code. You can have the software license for free and the option to get or not get support for it. If you want support, you have to pay for subscription services since not all companies have Linux gurus in their staff.”

The low cost alternative offered by open source IT solutions is paving the way for pricing innovations in proprietary offerings.

Currently, Microsoft has introduced an easy payment plan for its software offerings, which Reidenbach says is an effect of the growing popularity of open source solutions among enterprises.

“In terms of security, open source solutions are more resilient and have lesser attacks because of the number of developers collaborating in the code development,” he said.

On the other hand, Chua said virtualization helps firms of different sizes reduce management cost, increase asset utilization and system performance.

For example, virtualized machines can help companies maintain legacy and new applications on one physical server, which before required two or more units.

Virtualization optimizes use of assets and can bring down costs related to cooling and power consumption, which are increasingly a headache in maintaining a growing number of computer servers within organizations, for instance.

The business process outsourcing (BPO) sector can benefit from going open source and adopting virtualization, said Ronald Gaerlan, vice president for business development of Advanced Contact Solutions.

BPO firm ACS, for one, noted that IT spending is growing by 50 percent every three years with the new upgrades or updates of proprietary solutions.

When the BPO firm turned to open source solution Zimbra, it reportedly achieved 30 percent savings in software license fees.

Even search giant Yahoo! which acquired Zimbra last year, is implementing open source solutions for its own products, Gaerlan added.

“Going to open source can be a key differentiator for any company,” said Gaerlan.

Chua agreed, as he cited Red Hat as example which taps the global open source developer community for debugging, testing and enhancing virtualization codes before integrating them into its portfolio — in this case the Linux Enterprise version 5.

Collaborating with the open source developer communities also helped Red Hat protect itself from buyouts since software code assets are free.

At the same time, open source helped Red Hat maintain a manageable workforce of 2,500 programmers, while reportedly earning $533 million in business last year.


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