Expert: With open-source software, ROI tough to peg

For businesses looking to move to open-source software, the metrics used to compare return on investment with proprietary software may not always give the best answers. Basing such decisions on the costs associated with licensing fees, hardware, support and maintenance -- all traditional ROI factors -- ignores the expertise of workers who can create and use open-source software.

That was the argument made Thursday at the seventh annual O'Reilly Open Source Convention by Robert M. Lefkowitz, vice president of research and education at Optaros, an open-source consulting and systems integration vendor for large businesses.

In his presentation, Lefkowitz talked about how companies need to devise their own ROI models when evaluating open-source solutions rather than relying on ROI calculations done elsewhere. The idea, he said, is that traditional business measures of ROI focus on monetary savings, while today's IT companies should also consider expertise gained.

"If the best people are using open-source, then that's a reason to go there," Lefkowitz said. "And if the best people are using something else, then you'd want to go there. Where the best people want to go, that's where the future is."

The problem with traditional ROI calculations, he said, is that it is expensive to gather detailed, timely information inside a company for an ROI analysis. Instead of getting accurate data about their own operations, companies often use generic data gathered about similar-size firms that have done their own ROI studies or gotten help from analysts, he said. But that generic data doesn't usually give an accurate picture for every company.

"You can find a study that proves a point, and you can find a study that disproves a point," Lefkowitz said.

Traditionally ROI arguments are made by companies to figure out where and how to grow, while vendors create ROI maps to help figure out sales pitches to customers, he said. "The ROI is the document to build consensus around the plan," he said.

ROI for developers and other staff people is not easy to measure or recognise, Lefkowitz said, but it should be made a part of the equation when looking at whether a company should adopt open-source software.

"Open-source provides a mechanism to identify the good [workers]" because "good people invest in themselves, learning technologies they can use throughout their careers," he said. "Expertise matters. If you have better people, you'll manage the hardware and software better."

One example he cited is search engine company Google, which built a huge IT system with generic white box computers -- creating a powerful network that is unique and efficient with the hardware available to anyone. What made Google different, he said, is that the developers there have done the creative work with open-source software and thinking.

"That's what Google did," Lefkowitz said. "The scarce resource there is the expertise."

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Todd R. Weiss

Computerworld
Show Comments

Cool Tech

SanDisk MicroSDXC™ for Nintendo® Switch™

Learn more >

Breitling Superocean Heritage Chronographe 44

Learn more >

Toys for Boys

Family Friendly

Panasonic 4K UHD Blu-Ray Player and Full HD Recorder with Netflix - UBT1GL-K

Learn more >

Stocking Stuffer

Razer DeathAdder Expert Ergonomic Gaming Mouse

Learn more >

Christmas Gift Guide

Click for more ›

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

George Khoury

Sharp PN-40TC1 Huddle Board

The biggest perks for me would be that it comes with easy to use and comprehensive programs that make the collaboration process a whole lot more intuitive and organic

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?