March 5, 2005

Linux and ROI

by roy

A lot of businesses have talked about Linux over the past few years, especially when they learn that Linux can be less expensive to operate than one of the Microsoft OSes. Some large corporations, including Google, Burlington Coat Factory, Orbitz and Dell have switched to Linux network and web server software. Judging from the amount of traffic their sites get, this is solid evidence of Linux’s stability.

The trend toward Linux has not yet filtered down to small businesses; however, if you’re trying to decide whether to implement Linux in your business, there are a number of surveys available on the ‘Net to assist you.

The CyberSource Survey

A survey, conducted by CyberSource in April 2002, evaluates a total cost of ownership (TCO) comparison between Windows and Linux. The study is for an audience of non-IT executives within small to medium-sized businesses.

This study’s results showed that the percentage saved by using Linux over a 3-year period would be 34.26%, using existing hardware and infrastructure. If new hardware and infrastructure is purchased, the saving is 24.69%.

CyberSource takes four major topics into consideration: hardware platforms, applications, salaries, and service charges. These topics include factors like the cost of new hardware and office-specific software, IT staff salaries, and Internet connectivity fees. It’s a fairly exhaustive survey and well worth reading.

The Robert Frances Group Survey

Another study, made by the Robert Frances Group in July 2002, surveyed 14 executives of mid- to large-sized companies. Here again, Linux was the least expensive platform to deploy and operate. The study concludes that the cost of running Linux is roughly 40% that of MS Windows, and 14% that of Sun Microsystems’ Solaris.

(A more recent study by IBM explains how that company has successfully integrated Linux into its overall business structure.)

Both studies agree on a number of return-on-investment topics:


Some companies are really irked by Microsoft’s new licensing policy. Windows is licensed on a per-server basis, but client licenses are issued only at high prices. MS also charges a 25% yearly maintenance fee to upgrade the software with the latest features, patches, etc., whether or not the user needs these. The company can also sue you for non-compliance.

However, Linux is not licensed in this fashion. The Open Source contract for Linux software usually states the opposite of MS’s demands; namely, that the software can be installed on as many units as necessary, but cannot be sold for a profit. This policy is sometimes called “copyleft” (as opposed to “copyright”).

System Support and Administration

Administration is the highest expense for Linux, because that’s where Linux distributors and developers make their money. These expenses include costs to employ system administrators to manage the deployment. These costs can also include fees paid to consulting providers or product vendors for technical support.

Even if you factor in the above costs, however, Linux still comes out as less expensive. When serious problems occur on a Windows system, administrators often require assistance directly from Microsoft, which is always at a fee. On the other hand, support costs for Linux averaged less than $10 per processing unit per year, accoring to the Frances Group’s study. Many administrators are taking advantage of free support resources, including mailing lists, news groups, Web site knowledge bases, and so on. The same costs for Windows averaged $200 per server per year.


Microsoft has had a shakey reputation in regard to security matters; in fact, MS has also become a “political” target for hackers seeking to prove the point. Additionally, Microsoft’s latest venture, the .Net project, has alleged security problems.

Yes, Linux can be hacked as well, but not nearly as easily as MS products, because, for one thing, Linux has inherited many of Unix’s safety features.

One criticism of open source software has been that if a security problem does occur, there is no one to hold responsible. On the other hand, it is obvious that no one has ever held Microsoft accountable for outbreaks of Code Red, Nimda or the macro viruses that have been carried through Outlook or other MS products.

If security or other problems do arise, there are many no-charge Linux newsgroups, forums, discussion boards, mailing lists, and developer’s web sites.

Even MS Office can run on Linux, thanks to Codeweavers and WINE.


Many businesses and their employees are reluctant to install Linux because they fear the learning curve. Linux certainly looks different from Windows, and its command line looks like a step backward. But consider the fact that every 2 or 3 years MS Windows presents us with a new and different interface which, of course, means there has always been a training period for users to “get up to speed” on Windows 98, Windows NT, Windows 2000, etc, etc.

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