Better Negotiating Through Open Source

By Allen Bernard

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Using open source software to save money is not a new idea. Linux, Apache, mySQL, and many other established open source "brands" have done so well they are even bundled into proprietary ISVs products.

As well as these and many other established open source solutions have done, however, there are plenty of applications large and small that are consumed every day by companies that do not have a Linux-like equivalent.

But that doesn't mean you have to throw in the towel and accept whatever terms your ISV is offering.

If you take the time to look (there are literally tens of thousands of open source projects going on this very minute) you can probably find something out there in that may meet your needs—at least in part anyway. And, even though you may not want to work with open source products, you can still benefit from their existence by using them as leverage when negotiating with proprietary software makers for what you really want.

"The beautiful thing about open source is, at it's heart, open source is all about is keeping a single entity from having exclusive rights to technology," said Mark Driver, research vice president for Application Development and Open Source at Gartner. "The very fact that I can have mySQL—it may not be a real competitor to Oracle at all, but when I have it in my organization Oracle has to stand up and take notice."

And that, in a nut shell, is one of the great strengths of open source software: that, by it's very existence, it is a threat to established order.

It was not so long ago that no one outside of the developer community had even heard about "open source" or could believe that software could be free for the taking. Today, most enterprise software vendors, while not worried about market share quite yet, are aware that one day, open source equivalents to their products may rise to challenge their dominance.

"Clearly any ISV that's conscious is aware that, in the future, they are going to have to face up to this," said Michael Goulde, an analyst in Forrester's Application Development & Infrastructure group.

But, said Goulde, until open source starts making in-roads into higher end enterprise application suites that you negotiate for individually, many ISVs are not going to feel threatened by a SugarCRM or Compiere mug sitting on your desk.

Yet, argues Clinton Begin, a senior software consultant at ThoughtWorks, much of the software enterprises consume today has direct competition from open source.

"For example," said Begin, "if I spend $2 Million on Oracle today (before my solution is built), I have to make at least $2 Million just to break even. What is my ROI, and how fast can I realize it? If I spend $0 on PostgreSQL, then the first dollar I make is ROI -- realized from day one."

You may not want to use PostgreSQL, and you may even be contractually limited in how far you can stray from Oracle in your upcoming projects, but the point is, that the option is there and it can save you a lot of money whether you use it or not.

"I think it concerns (ISVs) a lot more than they're willing to say," said Gartner's Driver, "because it's not just about comparing Linux for that matter or mySQL against Oracle or what have you, it's about allowing an alternative into an organization."