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Software decisions are a critical part of business strategy. Software powers everything from marketing websites (content management systems — CMS) to student and customer records. It stores employee records, provides communications infrastructure, and creates and distributes marketing campaigns (marketing automation, customer relationship management — CRM).
When we discuss software purchasing and usage with our partners, we need to take into account the different contexts and uses of that software. The question of context is central to how we think about software decisions. What are your constraints? Are you constrained by budgets? Security policies? License agreements?
One of the main reasons that we work with open source software like Drupal is that it helps remove business constraints. The fundamental tenets of open source software are:
- Included source code and the ability to modify that code
- The right to freely redistribute the software and any modifications
- Bans on discriminating who may use the software, and for what purpose
- Non-restrictive licensing, so the software is neither tied to a specific product nor restricts the development or functioning of other software.
These freedoms have a direct effect on the cost of acquisition and maintenance for your software project. Need to connect disparate systems together? An open source license makes that easier, since it removes any restrictions on how you might integrate those systems. For marketing applications, the use of open source software platforms such as Drupal and WordPress ensures your content management system can be extended and adapted to meet your needs.
Open source software frequently runs on community contributions such as money, time, or expertise. You need to factor this aspect of open source into your software decisions. Do you have the resources to devote to supporting the software? If not, is your goal to encourage adding the needed resources within your organization? For example, a 1,000-person organization may need to dedicate three full-time employees to supporting an open source application.
The pros and cons of a commitment to maintaining open source systems must be measured as a question of total return. In the example just given, having three developers devoted to the project may be less expensive than purchasing an application that could be licensed to all users. It may also be cheaper than building and maintaining the software in-house. The skills and training that the three people develop, and putting them in an active, committed role of improving the software, may produce a better return on investment than having them install and maintain proprietary software.
When planning your budgets, look for these items, and consider where you get the best value for investing your time and money:
Licensing. Proprietary software solutions charge license fees. I’ve worked on projects where we replaced proprietary software that had a 7-figure license fee. These used to be one-time fees but now tend to be annual subscription costs (such as you might pay on a smaller scale for Adobe Creative Suite). In extreme cases, the license fee can be per user (also called per seat licensing). In such cases, moving from a team of 3 to a team of 5 can have exponential cost increases.
Support. Before I joined Palantir, I worked at a company that made and sold software. We included a fee of 20% of the purchase price per year as a support fee, which is still fairly standard for enterprise software. The fee was collected regardless of the level of support actually provided. Without it, security and other critical updates wouldn’t be provided.
Hosting. Many software applications have moved into the cloud. While this lessens the cost of hosting applications internally, it can increase the chance of vendor lock-in, as the entire application is outside of your direct control. With both Drupal and WordPress, there are good, effective hosting options that lower your total cost of ownership without locking you in to a specific software or service provider. (Full disclosure, we partner with both Acquia and Pantheon, who provide such services.)
Hidden costs. When we talk about lock-in, we refer to a business model that forces the customer to become dependent on the original service provider. (Lock-in, put simply, is why cable and telecom companies have such horrible customer service ratings.) A software system that doesn’t give you access to the source code — or, even worse, access to your data — is trying to lock you in long-term. That software is restricting the freedom to run your business they way you want to.
It’s that final cost that makes the open source software movement so attractive to many IT professionals. We work with software all day, and we don’t want to be restricted in how we can use it. So we resolve to work together to provide tools that are freely given to all.
In the end, consider the logic behind your decisions. Return on investment and staff commitment are metrics that matter internally. For instance, does your support of LibreOffice, an open source alternative to Microsoft Office, make it possible for your organization to save money? Quite possibly.
But are there larger issues at play? Advantages can also accrue outside your organization. We began by making the case for the free exchange of information that should apply to both medicine and software design. So when you ask the question “What could we do?”, consider expanding the scope to include “What could we do that would help us and others?” That small change in thinking could have profound effects on the way you evaluate your ultimate return on investment.