Open Source is Not Free

Open source software is heavily used in the enterprise space. There are several instances where open source has become the de facto standard like Linux for operating system and Apache for web server. But open source is not for everyone and can prove to be quite challenging if the software has not reached the right level of maturity like Linux and Apache web server.

The following enterprises can benefit from open source:

1. Cultural Fit: Enterprises that have a culture of using an internal IT team to build software solutions & support those solutions internally are an excellent fit.

2. No Urgency to Go-To-Market: If an enterprise is still working on identifying & refining their use cases and there is no urgency to go-to-market with them, then they can have their team spend time experimenting with open source.

3. Not Mission Critical: Open source software does not come with support. An enterprise can buy support or if the software is being used in an environment that is not mission critical, they can support it internally.

4. Love Opex, not Capex: This is an unusual reason but I have heard this reasoning a few times to make it worth including in this list. The benefit is that operating expenses / opex can be fully deducted in the accounting period during which it is incurred where as capex only allows depreciation of tangible assets and amortization of intangible assets. Software purchases are capital expenditures (capex) and an enterprise may prefer spending money on resources (opex) versus buying commercial software to save tax dollars.

5. Encourage Innovation: Using open source software is another way to encourage innovation by setting aside time for employees to build solutions. This will also motivate employees to solve the challenges in their work environment by using open source software and make them feel empowered. Additionally, this will help attract talent.

But open source is not free and an enterprise needs to keep the following in mind:

1. Competitive Disadvantage: While the enterprise is trying to build something using open source, a competitor can purchase the commercial version and launch a solution to beat the enterprise. This could result in losing revenue and market share.

2. Customer Frustration: Most software vendors follow a strategy where they provide the basic features in the open source version and then add more features that makes the software easier to use, perform better and is more user-friendly. This means that a solution built using open source could run into performance challenges or other limitations leading to customer frustration.

3. Higher Resource Costs: Internal IT teams are required to work on open source software but since the software is not commercial-grade, it can have more bugs. This will result in requiring more time from employees to resolve the bugs or find a workaround to build something that can be used by the enterprise, leading to higher costs.

4. Sporadic Release Schedule: Most open source software offerings do not have a well-defined release schedule. This means an enterprise that needs to get a few bugs resolved before moving forward could be waiting for a very long time before they get a release with the fixes. Also, the bugs that impact one enterprise may not be of the highest priority for the open source team to work on. In this situation, the enterprise can fix the bugs internally, wait for the release that has the fixes or decide to go commercial.

5. Fear of Attrition: Several enterprises that build internal teams to work on open source software also fear attrition. Losing a key resource that understands the ins-and-outs of the solution can be a huge blow. This can force the enterprise to buy support (or convince the key resource to stay) which can end up being more expensive for a customized open source solution.

In short, evaluate the pros and cons before going the open source route. My recommendation is that if software is not your core business then an enterprise should not spend time & money on developing an open source solution. The only exception is if the enterprise has requirements that are so unique that no commercial offering is available. Even in this situation, they should hire an experienced SI to build and support the solution versus taking on the risk themselves.  

What has been your experience with open source software?