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Contrary to rumour, proprietary, licensed software is neither dead nor dying.

Here’s a prediction from Gartner, the research group, to underscore the point: “Through 2008, Linux [the open source operating system that is a direct competitor to Microsoft’s Windows] will not be suitable for all desktops in 80 per cent of companies.”

It points to the hundreds of thousands of applications and documents in companies’ computer systems that require Microsoft Windows, Internet Explorer and Office to run successfully.

It concludes: “Although many companies would like to pay Microsoft less of their IT budgets and have investigated open-source replacements like OpenOffice.org or Linux for their desktops, the migration costs frequently prove too high to make wholesale migration worthwhile.”

An example from the UK will suffice. A year ago, Newham Council in east London signed a 10-year strategic relationship with Microsoft, bringing to an end an extended trial in which Microsoft products were compared with open source alternatives.

A study by the consultancy Capgemini suggested that using open source software would provide only half the cost-savings of the Microsoft solution but would cost three times more to implement.

That study was sponsored by Microsoft, and Eddie Bleasedale of Netproject, which devised the open source alternative, suggested at the time that the trial had been been a tactic to get a better deal out of Microsoft, a claim rejected by Richard Steel, Newham’s IT chief.

One year on, Mr Steel has no doubt the decision was right: “When we announced our partnership with Microsoft, my decision received a hostile reaction from members of the open source camp, but I am more certain I made the right choice today than ever before.

So how much open source or free software will companies be using over the next few years? Roger Fulton of Gartner puts the percentage in the “low teens”.

The hard fact is that the benefits of open source software have been oversold. Proprietary software can have an the edge in terms of the financial return for both producer and user, security and performance.

For the vendor, the economics of open source software, where money is made from selling additional features or services rather than the basic product can seem a little risky.

Mark Webbink, deputy general counsel for Red Hat, which packages Linux for ease of use and sells it with a service contract, says proprietary software has a distinct advantage where special code has to be written for a specific application.

He gives as an example a suite of dental software which had no other application in medical practice: “Red Hat will not go into these areas without the full financial support of the company wanting the product.”

Martin Taylor, Microsoft’s general manager of platform strategy, argues that there has been a recent change in customer perception: “There has been a shift from a romantic love of open source to a more practical approach with customers saying they need technology to solve a business challenge.”

He sees four main reasons why companies stay with Microsoft or return to it. First, cost: “People don’t think of Linux as free any more. They got excited originally about the opportunity to save money but they find it costs more to deploy, maintain and administer.”

Second, reliability. Mr Taylor says problems arise if the user tries to extend or develop the system.

Third, vulnerability to malware. Mr Taylor says Microsoft’s apparent weakness is simply a result of the huge number of Windows systems. In tests it fares well against versions of Linux, he claims. And Microsoft gets its patches out more rapidly.

Finally, indemnification. Customers feel more secure if there are mutual contractual obligations. As Mr Longbottom puts it: “Knowing you have a full commercial licence means that when things go wrong, you know who to shout at.”

IN A NUTSHELL: LINUX OR NOT?

FOR: The most compelling reasons for switching to open source are the potential savings on licence fees.

Even with volume discounts, the cost of licensing a proprietary program such as Microsoft Windows for a large organisation can swallow a significant chunk of an IT budget.

Other advantages claimed for open source are greater robustness and reliability, faster resolution of bugs, and lower labour costs, as open source programmers tend to be cheaper and training costs are lower.

AGAINST: Lack of technical support has traditionally been the big fear of businesses considering switching to open source.

It is less of an issue today, as leading vendors and service companies now support the more popular products.

However, even with outside help, businesses remain reluctant to embrace open source because of the time required to master a new program.

Proprietary products tend to be more familiar and easier to learn and to use.

Copyright The Financial Times Limited 2017. All rights reserved.
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