It is often said that open source software will reduce costs.
Those with little or no experience of implementing computer systems assume these savings come from the fact the free and open source software does not carry a license fee. However, this is not usually the case.
Anyone who has rolled out an software solution, even in a small organisation, will tell you that there are hidden costs. These include training, support, customisation and maintenance.
In 2005 BECTA published “A study of the spectrum of use and related ICT infrastructure costs” which concluded that training and support costs accounted for 60% of total cost for any software solution. The report also found that open source software reduced these costs by 40-50%.
Further to reducing training and support costs, open source can reduce the cost of customisation for specific environments.
It is extremely rare for a back-office software solution to be a perfect fit for any specific organisation straight out of the box. Consequently, the software needs to be customised to suit specific needs. In a closed source environment there is a single provider, or a limited set of approved providers, who can make these modifications. However, in an open source environment anyone with the appropriate skills can make these modifications, including internal staff.
As a result of this competition, market forces can often result in a lower cost for a tailored product. Just how much can be saved here depends on the customisations you need to make.
Finally, the open source culture of code sharing results in lower development costs for the software in the first instance. That is, once one user has commissioned a specific feature or configuration option the results of that work is available to all. As a result, the more a product is used and developed within any given domain, the more widely the development costs are shared. In addition to a reduction of costs open development can significantly increase the rate of innovation as it brings together great minds to collaborate on shared solutions.
Where there is no pre-existing solution to match ones needs the open developent model can be an extremely cost effective way of reducing cost. This process is examined in more detail in our document “Meritocrats, cluebats and the open development method: an interview with Justin Erenkrantz.”
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