Business Management

David Blakey (South Africa): The Economics of Free Open Source Software

The Free Open Source Software (FOSS) sector has reached ZAR40 Billion globally and it is not stopping there. Gartner predicts that by 2012, over 90% of businesses will use enterprise open source in direct or embedded forms. Globally and locally governments, and other large institutions, are driving the open source initiative in an attempt to save costs, whilst improving efficiency.

Almost all South African Government software tenders now have rules forcing open source collaboration as a priority. Almost all online learning is now carried out on FOSS systems. From banks and big brands through to the SME next door, the current South African software climate demands greater efficiency, accompanied by an affordable price tag.

That is why FOSS is especially attractive in rapidly developing economies like South Africa. For a small hardware cost anyone is able to get their own servers up and running and with no software cost. Open source and entrepreneurship go hand-in-hand, and the government knows it. The CSIR (Council for Scientific and Industrial Research) runs an Open Source Center specifically designed to stimulate the adoption of open source technologies into South African business.

The Impact and History of Open Source Software

Historically the impact of open source software is that it has continually driven progress in the software environment. Look at the browsers - most come from FOSS development. South Africans have heard the call and are contributing to open source on a daily basis. South Africans have always been supportive of FOSS, but we are also aware of the pitfalls...

Enterprise Open Source Consulting

Currently the expertise and technical know-how required to move to FOSS is not present in most companies, and hiring (or outsourcing) can be very expensive. Companies can end up with unqualified individuals posing as enterprise open source consultants charging exorbitant fees, with sub-par delivery. This all makes for difficult negotiations and decision processes both for clients and genuine providers.

Herein Lies the Gap

But open source software has long been technically sufficient, and often superior. Better performance on cheaper hardware is almost always expected. Yet, in many cases it is still not business ready - no management platforms, no accountability, no reporting, and irregular support. An expert staff member leaving your business can put you to sea. Malfunctioning software, open source or proprietary, can cripple a business overnight.

But opportunities exist, and reputable vendors are quickly scaling up to the challenge: enabling businesses to use the best of breed open source applications, whilst saving costs by delivering on support and performance promises. Even big vendors like IBM are strengthening their Linux divisions.

Business Intelligence and Open Source

The cost savings and opportunities offered by FOSS cannot be ignored, and in today's economic climate it has the potential to revolutionize South African business. That being said, you have been warned, make sure you do your due diligence. Time is always a factor in IT, but rather be sure that you are making the right choice when choosing an OSS provider. Check their track record and make sure they are here to stay, the industry is small enough here for word to get around. Also make sure that they give you the keys to the program, don’t let them hold you ransom.

If you are a FOSS provider you simply do not have a choice - you need to enable your clients to utilize the system and you need to come up with a solution for the gap between what they want, what is available, and the ethics of offering the appropriate support and customer service.

Fundamentally, South African Companies should no longer be paying huge fees for software - free open source software should be at the core of every business, and supported professionally. Hopefully companies will soon know which providers they can rely on for the best open source support and services, and these providers will build stable, renewable income businesses around this model. The best part of course?

It’s cheaper for everyone.

By David Blakey, Snapt


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