The Real Cost of Open Source Software
We are all witness to the controversy over the relative cost of ownership of open source software (OSS) versus that of proprietary software offerings. While articles and case studies from some of the proprietary software vendors may be considered a defensive move, they do bring up points that address the total cost of ownership, helping users to consider issues beyond the initial and annual licensing costs.
Perspective
Total Cost of Ownership (TCO) can be defined as all of the costs of acquiring and maintaining a network of computers. This includes the cost for
- Hardware and software technology – client computers, servers, software, printers, networking equipment, external service providers
- Direct labor - those responsible for purchasing, training, implementation, management and support of the computer environment
- Indirect labor – time spent by users in training, dealing with computer and networking issues, and effect of computer or network down-time.
When we look at K-12 TCO, based on eight CoSN TCO case studies, the average software cost is $71, which is only four percent of the total cost of ownership. If we subtract out indirect labor, software is then ten percent of direct (budgeted) costs (see chart). This number represents all in-house software costs that are not included as a part of hardware purchases, such as operating system included in the price of a client computer.
This implies that use of open source software can affect some portion of ten to thirteen percent of your technology budget, or four to five percent of your total costs, as there are not reasonable open source alternatives for many of the applications.
The Costs and Savings
While software is not a large percent of the TCO for computers, it still manages to represent a seemingly big number when it is time to renew licenses, and a study of alternatives is certainly worthwhile for most K-12 schools or districts.
The British Educational Communications and Technology Agency (BECTA) has performed several case studies looking into the relative costs and advantages/disadvantages of for several UK schools, documenting them in “Open source software in schools: a case study report”. A full report on the relative costs of OSS schools and approaches to OSS implementation by schools is given in the Becta publication “Open source software in schools: a study of the spectrum of use and related ICT infrastructure costs” (http://www.becta.org.uk/publications).
There is no universal formula for determining the best solution and each institution needs to determine the merits of open source versus proprietary software based on application and their environment. We will not discuss the pros and cons of issues such as comparative functions and support here, but will instead focus on cost considerations.
Technology Cost Savings
Besides the low cost (usually free or nearly so), OSS often requires a less powerful hardware platform (either server or client computer) in terms of memory and processing power.
Direct Labor Costs
While most of the more popular OSS offerings are reliable and require no more support effort that their proprietary software counterparts, there is generally a start-up training and support effort. The training costs of the support staff and their time in training users needs to be considered. For TCO purposes, these initial training costs can be amortized over the expected life of the project, not to exceed five years.
Another direct labor cost is the cost of planning, managing and implementing the OSS project.
Indirect Labor Costs
End users need to be trained in any operating system, productivity software or application software that they use. Incorporation of OSS to replace existing software requires training the users to whatever extent they interface with the new OSS. Whether user time or use of substitute teachers for training is a budgeted cost or not considered as part of the budget, that user time and/or use of substitutes is a real cost to the school or district, and needs to be accounted for. Further, consideration needs to be given to the extra support users need as they get up to speed with the new OS or application.
Value of Investment
As a part of a new effort by CoSN to help schools measure the value of investment (VOI) for technology projects, a free web-based project cost estimator is being developed, and is scheduled to be available by fall of 2006. This cost estimating tool can help you to think about and include all of the costs of implementing and maintaining specific OSS initiatives. Watch CoSN’s Taking TCO to the Classroom website, http://www.classroomtco.org/, for availability of this tool.
It should be noted that cost savings are not the only reason for implementing OSS projects. As the BECTA study indicates, flexibility, culture, reliability and security also come into play. The effects of these issues on school mission, goals and mandates need also to be evaluated. The focus of CoSN’s VOI project is to provide a methodology and tools to make these evaluations.
Read another article by Rich Kaestner on Total Cost of Ownership- Follow this link:
Article by Rich Kaestner Project Director Taking Total Cost of Ownership to the Classroom
