05

Aug 2013

Open Source Software Cuts Costs for Startups – Expert

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Open source software offers a number of compelling advantages for new businesses. Dave Koelmeyer looks at why it could be a good fit for your startup.

According to a local IT expert, open source software provides Softwarestartup businesses with valuable relief from overheads at a crucial phase of the company’s development.

Software that is “free and open-source” may be freely installed, used, and copied without restriction. There is no initial purchase cost, nor are there any ongoing subscription fees for continued use. Far from being watered-down versions of their paid counterparts, open source applications are powerful and business-grade.

The zero cost aspect of open source software is its most obvious benefit for businesses looking to save on commercial software spending. For even a small business, the cost savings of (for example) an open source office productivity suite can run to thousands of dollars compared to the well-known proprietary alternatives. Budget which would otherwise be spent on software can be allocated instead to the other critical areas of establishing your startup. The cost aspect however is but one of a number of important features of open source relevant to new businesses.

Proprietary, commercial software is generally loaded with restrictive licensing terms that prohibits its use under certain conditions. Using again the example of an office productivity suite, a single copy of a proprietary office software product generally cannot be installed on multiple computers or used by more than one employee at a time. Certain editions of the software (typically those branded for “home” use) while appearing affordable may in fact be illegal for business use, without paying considerably more for the “professional”-branded edition. The penalties for businesses in breach of these licensing terms (either unwillingly, or deliberately in an attempt to avoid paying license fees) can be highly damaging.

There are no such restrictions when using open source office software (an excellent example is LibreOffice). As a new business owner you can legally distribute the software to all your employees. This makes an ideal use case for startups looking to reduce capital costs by implementing an employee remote work policy, as the same software can be freely installed on office and remote computer systems alike. As your business grows and new hires are made, open source software will scale with your business effortlessly. There is no change in the upfront cost (it remains zero), and no need to negotiate complex, time-consuming and expensive multi-user licensing with a vendor.

A critical benefit of open source is the freedom it affords businesses from vendor lock-in and ongoing forced software upgrades. There are two aspects to this. First, the use of non-proprietary file formats (that is, approved by international standards bodies) means that the familiar scenario of files from earlier software versions not opening correctly (or at all) in newer versions can be avoided. Storing your electronic documents in any proprietary file format (either in-house or in the cloud) presents a long-term archival risk.

There is no guarantee in the future you will be able to access archived documents using the original version of the format they were stored in, or if the application you used to author the files to begin with would even exist. With proprietary software the remedy involves paying for expensive software upgrades or consultants, with all the attendant complexity and disruption. By adopting open source software early in your startup phase, both the cost and the risk can be eliminated.

The second aspect is knowing that the underlying code open source software is built on can be freely examined and modified. With proprietary software, this is prohibited by vendors’ license terms. Businesses wanting specific features or long-standing bugs fixed have to wait for new versions of the software to be released, and then commit to an expensive upgrade process. With cloud-delivered software this situation can be even worse, as the cloud provider can choose to modify and remove features at any time, with no control or input on the part of the customer.

By using open source, your business is free to engage a software developer to customise and tailor the software to suit your business needs in any number of ways. The freedom to do this gives startups a powerful competitive advantage over other established businesses still using traditional proprietary software controlled solely by a single vendor.

The low exit cost of open source is another important benefit. Exit cost as a factor of software TCO is very rarely discussed by proprietary software vendors, and for good reason. Their sales model is often based on enticing new business customers with nominally low introductory pricing, or in the case of cloud providers low monthly subscription fees. As your business grows and becomes dependent on software with closed code and non-industry-standard file formats, the cost of migrating to an alternative when the need arises (that is, the exit cost) can become prohibitive.

The vendor exploits this by increasing the license fees, knowing that customers will likely pay the new amount rather than face the considerable expense and disruption of an alternative. This is a textbook example of vendor lock-in.
By using open source, migrating your business systems to alternative software in the future becomes significantly easier and less costly. Standardized file formats can be freely adopted by other competing software vendors, which translates to a wide variety of other applications that your business can move to. And with freely accessible underlying code, a software developer if needed can be engaged by the business to speed and ease the migration.

There is an entire universe of open source software available online for every conceivable business purpose, and putting it to work simply involves downloading and running it. There is no need to talk to a sales person, no time-limited trials or monthly subscription fees, and no restrictive licensing. To ensure successful adoption, business owners can look to companies that offer professional open source support and training. This combines the many advantages of using free
software with the safety net of professional help as and when needed.

For more information contact Dave Koelmeyer owner of Apertura Designs, a New Zealand-based company providing support for small businesses and startups. www.apertura.co.nz

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Mark Devlin
With more than 20 years in public relations and marketing Mark Devlin has an impressive portfolio of clients who trust him with their brands. His ability to translate a commercial story into an informative and engaging business piece has seen his clients secure cut-through media coverage, position them as market leaders in their respective fields and grow their businesses substantially.
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