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Measuring total cost of ownership. A claim that is often made by free software detractors is that free software is not really cheaper. Initial licensing fees, it is said, make up a very small part of the "total cost of ownership" (TCO) of a computing system. Once you figure in the costs of ongoing operations and support, free software no longer looks like a very good deal.

In reality, there is very little in the way of real data which demonstrates, one way or the other, whether a free or proprietary software shop is cheaper to run. So it was refreshing to see information from two separate sources which fills that gap this week. The bottom line from both sources is the same: running an operation with free software costs less.

First, consider a survey done by Cybersource (available in PDF format) which looks directly at the TCO issue. The folks at Cybersource look at two scenarios for outfitting a company with a server and desktop infrastructure, with and without the need to buy new hardware. The survey considers hardware and software costs, and the costs of the staff required to keep things going. The final conclusion: a Linux-based infrastructure has a 25% lower TCO over three years if new hardware is part of the deal; 34% lower if existing hardware is to be used.

The survey could be attacked as being simplistic. The only software cost for the Linux-based network is $79.95 (Australian) for a single copy of a commercial distribution. The possibility that a company may need to buy any proprietary packages is not considered. The survey also does not consider retraining and other migration costs - a point which is often made by proprietary software companies, and which should be taken into account (but see the next item, below). Cybersource found that Linux system administrators cost a bit more than Windows administrators, but does not account for the (generally unmeasured) perception that Windows systems require more administrative time than Linux systems. And so on.

No such survey is going to be perfect, however - real-world networks are complicated things. This survey is, however, a useful contribution to the debate.

The other data point comes from a very different source, and was never meant to be presented as a TCO comparison. Consider Dell's new dedicated hosting service, and, in particular, the D-2800 offering. This service offers a respectable system (Pentium 850, 256MB, 20GB, 21GB/month bandwidth) in two configurations:

  • Red Hat Linux 7.1: $189/month.
  • Windows 2000: $239/month.

The folks at Dell are not out to prove a point about which system is better. They are running a business, and have figured out a competitive price at which they can offer each service. The total cost of ownership of each system will have been figured into the hosting costs they charge their customers. The result is decisive: with identical hardware and bandwidth provision, the Linux system is 21% cheaper. Not a bad result.

Microsoft vs. Peru. These events transpired in late March and early April, but we in the North can be a bit slow at times.... Peru, like a number of countries, is considering legislation which would require the use of free software within the government whenever possible. Microsoft, strangely enough, does not like that idea. So, on March 21, Juan Alberto González, general manager of Microsoft Perú, sent a letter to Edgar Villanueva Nuñez, the Peruvian congressman behind the free software bill. This letter is available on the net translated to English; those wanting to read the original Spanish version can find it (as a set of scanned images) on this page.

The letter raises the usual points heard from Microsoft when it is worried about free software:

  • Use of free software will "discourage local and international software manufacturers who make real and important investments in the country."

  • Free software presents security risks, comes with no warranty, and may violate "the intellectual property rights of third parties."

  • Free software is not really free (of charge), and, in any case, licensing costs are a small part ("8%") of the total cost of ownership.

  • The state could benefit from Microsoft's volume pricing schemes (despite the fact that Microsoft just claimed that licensing costs are almost insignificant).

  • Moving to free software imposes migration costs.

  • The level of service available for free software is inadequate.

  • Using free software will discourage creativity in the Peruvian software industry. "With a law encouraging the use of open source software, programmers lose their intellectual property rights and their most important source of remuneration."
And so on.

Government officials in many countries seem to eat that sort of stuff up. So it is delightful to read Mr. Villanueva's highly clueful response (in Spanish or English translation). We'll present a few excerpts here, but it is worth the effort to read the whole (somewhat lengthy) thing.

Mr. Villanueva starts by reiterating the goals of the free software bill, which Microsoft passed over entirely in its criticism:

  • Free access to public information
  • Permanence of public data
  • Security of the state and its citizens

These goals, he argues, can only be achieved with free, open source code and file formats. Not all free software users are much concerned with freedom, but governments should be. Microsoft's arguments pass over freedom and look at economic issues; it is good to see that this congressman is able to keep the freedom argument in view.

Once that is done, however, Mr. Villanueva proceeds to demolish the economic arguments as well. Concerning, for example, the claim that the local software industry would be damaged:

In addition, a reading of your opinion would lead to the conclusion that the State market is crucial and essential for the proprietary software industry, to such a point that the choice made by the State in this bill would completely eliminate the market for these firms. If that is true, we can deduce that the State must be subsidizing the proprietary software industry. In the unlikely event that this were true, the State would have the right to apply the subsidies in the area it considered of greatest social value; it is undeniable, in this improbable hypothesis, that if the State decided to subsidize software, it would have to do so choosing the free over the proprietary, considering its social effect and the rational use of taxpayers money.

With regard to Microsoft's security claims:

What is impossible to prove is that proprietary software is more secure than free, without the public and open inspection of the scientific community and users in general. This demonstration is impossible because the model of proprietary software itself prevents this analysis, so that any guarantee of security is based only on promises of good intentions (biased, by any reckoning) made by the producer itself, or its contractors.

Mr. Villanueva also sees through the "no warranty" argument:

If as a result of a security bug in one of your products, not fixed in time by yourselves, an attacker managed to compromise crucial State systems, what guarantees, reparations and compensation would your company make in accordance with your licensing conditions? The guarantees of proprietary software, inasmuch as programs are delivered ``AS IS'', that is, in the state in which they are, with no additional responsibility of the provider in respect of function, in no way differ from those normal with free software.

Mr. Villanueva takes issue with the cost of ownership arguments, making many familiar points: there is a more competitive market for services, fixes only need be done once, far fewer problems with downtime, "blue screens of death," viruses, etc. He also has an answer to the claim that migration costs make free software uncompetitive:

Once a policy of using free software has been established (which certainly, does imply some cost) then on the contrary migration from one system to another becomes very simple, since all data is stored in open formats. On the other hand, migration to an open software context implies no more costs than migration between two different proprietary software contexts, which invalidates your argument completely.

For what it's worth, Microsoft is far less concerned about migration costs on its Migrating to Windows from Unix and Linux pages.

One last point worth careful study is Mr. Villanueva's analysis of the failure of Mexico's "Red Escolar" project, which has backed off from its goal of running free software in all of Mexico's schools. Red Escolar failed because it emphasized licensing costs over the other benefits of free software, because it lacked support from the federal government, and, crucially, because there was no real plan for moving over to free software:

...the assumption was made that to implant free software in schools it would be enough to drop their software budget and send them a CD ROM with Gnu/Linux instead. Of course this failed, and it couldn't have been otherwise, just as school laboratories fail when they use proprietary software and have no budget for implementation and maintenance. That's exactly why our bill is not limited to making the use of free software mandatory, but recognizes the need to create a viable migration plan, in which the State undertakes the technical transition in an orderly way in order to then enjoy the advantages of free software.

This is an important realization: you can't just mandate free software and expect it to work. The fact that Peru is thinking about how this change is to be made, and that it is not "free beer" free, is a hopeful sign.

Increasingly, governments are realizing that the goals of freedom of information and security conflict with the use of proprietary software. Most national governments are also well at ease with the notion that they don't have to send all that money to a large, U.S. corporation which has been convicted of antitrust violations. Said corporation does not like this trend, and can only be expected to fight back fiercely. In Peru, however, the company has so far found itself rather outclassed.

LWN now accepts credit cards. Numerous people have asked us for an alternative to PayPal as a means for donating to LWN or paying for advertisements. We may be slow, but we don't forget...we now have secure credit card processing working on the site. If you have been waiting for a non-PayPal way to donate to LWN, now is your chance.

Inside this LWN.net weekly edition:

  • Security: Honeynet Reverse Challenge; tcpdump & FreeBSD; GnuPG 1.0.7
  • Kernel: The end of /proc/ide; kbuild 2.5 and modversions.
  • Distributions: Yet another revision (to the LWN Distributions List); The Arabization of Linux.
  • Development: Samba 2.2.4, SocketCC, Google search modules, Rosegarden 4v0.1.5, GARNOME preview 6, game contest, FLTK 1.1.0rc1, GnuPG 1.0.7, SBCL 0.7.3, Parrot answers, OProfile 0.2.
  • Commerce: Red Hat Launches New Channels to Support Education; EUCD status Wiki established.
  • Letters: Mandating the GPL.
...plus the usual array of reports, updates, and announcements.

This Week's LWN was brought to you by:

May 9, 2002


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