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!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
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

Toys for Boys

Family Friendly

Stocking Stuffer

SmartLens - Clip on Phone Camera Lens Set of 3

Learn more >

Christmas Gift Guide

Click for more ›

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Aysha Strobbe

Microsoft Office 365/HP Spectre x360

Microsoft Office continues to make a student’s life that little bit easier by offering reliable, easy to use, time-saving functionality, while continuing to develop new features that further enhance what is already a formidable collection of applications

Michael Hargreaves

Microsoft Office 365/Dell XPS 15 2-in-1

I’d recommend a Dell XPS 15 2-in-1 and the new Windows 10 to anyone who needs to get serious work done (before you kick back on your couch with your favourite Netflix show.)

Maryellen Rose George

Brother PT-P750W

It’s useful for office tasks as well as pragmatic labelling of equipment and storage – just don’t get too excited and label everything in sight!

Cathy Giles

Brother MFC-L8900CDW

The Brother MFC-L8900CDW is an absolute stand out. I struggle to fault it.

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Featured Content

Product Launch Showcase

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?