[LINK] Panelists consider the 'business case' for open-source
Wed, 02 Oct 2002 08:48:39 +1000
Panelists consider the 'business case' for open-source
BY STACY COWLEY
2 October, 2002 8:00
NEW YORK, U.S.
Two years ago Merrill Lynch & Co. Inc. executive Robert Lefkowitz became
intrigued with Linux and decided to install the open-source operating
system on his PC at work. The company's higher powers took exception to
that, and, invoking Merrill Lynch's policy against unauthorized software
installations, confiscated the computer. It took Lefkowitz six weeks of
explaining to reclaim his PC. He left Merrill Lynch soon after.
But then, last year, Merrill Lynch's executives became intrigued themselves
with the possibilities of open-source software -- and they recruited
Lefkowitz to return to the firm as head of its open-source development.
Lefkowitz joined executives from IBM Corp. and Red Hat Inc. Tuesday for a
panel discussion on "The Business Case for Open Source Software," organized
by Manhattan law firm Patterson, Belknap, Webb & Tyler LLP, whose practice
includes work on intellectual property issues. Around two dozen attendees
gathered for the discussion of how enterprises are using open-source
products and the benefits and challenges those early adopters are
No technology takes off until a killer app emerges, and for open-source
software, that catalyst was Apache, said Scott Handy, IBM's director of
worldwide Linux solutions marketing.
The Apache open-source Web server offered users a free tool able to compete
with expensive commercial alternatives, and by 1998 it had built up a
double-digit market share and established itself on IBM's radar, Handy
said. By 1999, IBM was treating Linux as a top-tier operating system and
using open-source code as a foundation for some of its own commercial
products, including its WebSphere Application Server.
IBM's embrace of the open-source community -- and its much-publicized US$1
billion commitment to Linux -- was the spark that convinced companies such
as Merrill Lynch to take a more serious look at the open-source movement,
Lefkowitz said. Once they did, the advantages of running software not owned
by any one vendor became clear, he said.
"When you look at the Free Software Foundation's Web site, they have an
explanation right on the page: 'Not free as in beer, free as in speech,' "
Lefkowitz said. "We're not terribly interested -- from a business point of
view -- in 'free as in speech,' but we don't think of 'free as in beer' as
the best way to build a business either. We like to think of it as 'free as
in market.' ""Free, as in market" means that when modifications or repairs
are needed, an open-source software customer can solicit for competitive
bids, where a commercial software customer would be forced to turn only to
the software's creator. That's an attractive proposition for a business,
Still, in the year Merrill Lynch has been working with open-source
software, the savings it's seen have been on hardware costs, not software,
he said. Replacing proprietary operating systems such as IBM's AIX or Sun
Microsystems Inc.'s Solaris with Linux have let Merrill Lynch trade pricey
hardware for cheaper alternatives, but the products Linux is replacing are
generally software vendors bundled in for free with the hardware, and
maintenance and development costs are fairly analogous, Lefkowitz said.
Merrill Lynch is happy with the value it gets for the money it spends on
hardware; where the company would like to drive down costs is on desktop
software spending, Lefkowitz said. Toward that end, Merrill Lynch is
beginning to evaluate desktop set-ups based on open-source software, with
the eventual hope of running 20 percent of its desktop using open-source
"Our primary reason to do that is our sense that the desktop market is not
a free, competitive market. Prices are higher than they need to be," he
said. Migrating 20 percent of supported desktop PCs would create a
sufficient user base to show vendors Merrill Lynch has an alternative, he
Merrill Lynch also plans to release as open source some of its own tools,
once an under-development corporate policy becomes official. The company
has decided that it will not create any new projects, but will contribute
to the development of software it uses by releasing such items as
documentation and benchmarking suites, Lefkowitz said.
Several in the audience said they are evaluating open-source software for
use at their companies; others said they came to the panel discussion to
hear about what issues are on the minds of colleagues.
Attendee Sergio Fanchiotti, a software engineer with Citibank, said he came
out of curiosity about the current state of the industry. Fanchiotti has
been working with open-source software for several years, and said one
aspect of the movement he finds particularly intriguing is the dedicated
hobbyists it attracts -- hobbyists who gain skills at home they can then
use at work.
"If you see that on someone's resume, that they've installed and
administrated something, it shows you that there is some extra step, some
extra drive," he said. "(Open-source) offers a way to train yourself, at
home, not just on the job."
The human mind treats a new idea the same way the body treats a
strange protein; it rejects it.
-- P. B. Medawar
For Link list information see http://sunsite.anu.edu.au/link/