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Open source applications sit at IT strategy table during recession

Open source applications look attractive in cost-cutting times, but solid IT support is essential for long-term success. Here, some CIO experiences.

In tough times, the "free" price tag of open source software is too good for some CIOs to pass by without at least a second glance. But it can be buyer beware: Despite short-term cost benefits, open source applications require sufficient IT staffing resources for the long term to keep up with code changes.

For many CIOs, open source applications have been part of the infrastructure for a while, often as part of tactical projects. But with competitive pricing for enterprise editions and incredible flexibility, some CIOs are now looking strategically at open source options for everything from phone systems to operating systems.

The aggressive rates of the products are catching the attention of midmarket CIOs looking to cut expenses, but Rob Enderle, principal analyst at Enderle Group in San Jose, Calif., advises CIOs to proceed with caution and not overlook the staff resources needed to install and maintain open source tools, which might not include the application support that's standard with other applications. Without sufficient support, any issues will fall in the hands of the IT staff, which may or may not be familiar with the applications.

"Everyone is thinking, 'cut, cut, cut.' CIOs may save some cash in the short term, but if they don't have the necessary resources to support their decisions, they will end up shooting themselves in the foot," Enderle said.

Properly allocating staff to support the day-to-day tasks of the IT shop is crucial, especially as departments get leaner. But that isn't stopping the open source growth spurt.

For example, a recent survey of more than 6,000 IT executives conducted by The Eastern Management Group Inc. found that open source PBX solutions claim an 18% share of the private branch exchange (PBX) market. The vast majority of those open source customers use Asterisk, Digium Inc.'s flagship offering. Digium, the Huntsville, Ala.-based developer of the first open source telephony platform, is seeing an increase in CIO attention, according to John Todd, Asterisk open source community director. He attributed the interest to the low capital required and high flexibility offered by open source applications.

"CIOs are attracted to it because the cost is zero to implement and chances are the systems administrators will know how to install it and make it work. CIOs are even able to reuse their old phone systems. They want to move up to a more sophisticated back-end platform without ditching their indestructible Nortel handsets; they can do it in phases with Asterisk," Todd said.

But, Todd added, there are some costs associated with installing Asterisk, such as a "forklift upgrade," or an overhaul of the entire system, which is charged per user, per seat. For CIOs looking to just swap out their PBX, he recommended hiring a one-time consultant to install Asterisk, leaving IT personnel to maintain it. Of course, for a larger, more sophisticated integration, such as with sales platforms or at call centers, the costs will be higher, he noted.

Open source business benefits

For some companies, the switch to open source has been more expansive, ranging from applications to full operating systems. Kelli Davis, CIO of Castle Branch Inc., a background screening service, is no open source newbie. Looking for flexibility and savings, the 130-employee company in Wilmington, N.C., decided six years ago to run 95% of is workstations on Linux, Davis said.

Everyone is thinking, 'cut, cut, cut.' CIOs may save some cash in the short term, but if they don't have the necessary resources ... they will end up shooting themselves in the foot.

Rob Enderle, principal analyst, Enderle Group

Although finding all the Linux-compatible software needed to run the business has been a challenge, Davis said she's thrilled with the flexibility open source offers and credits much of its success within her organization to a good support staff.

"It has been challenging at times; it's not as cut and dry when it comes to finding the proper software, and you need programmers," she said. "But as long as you have a good support staff and your executive board supports you, it works.

"If you're in a very small company and if you don't have the support staff, it may not work out financially," Davis added.

With a solid IT staff of 22 people, Davis had no reservations about open source when it came to choosing a customer relationship management (CRM) system to replace the company's original, "much less functional" CRM. Davis chose SugarCRM Inc. last year and has not looked back.

"The business thought has been, 'If you don't have it, how do you know you need it?' But the flexibility and the customization has been key for us. We have other departments looking at it, seeing how it's working, what it can do, and it has really opened up people's eyes as to what's available out there," Davis said.

Finding room to grow

In a down economy, implementing anything new can be a challenge, and open source is no different. Bill Miller, executive chairman and chief technology officer of XAware Inc., a commercial open source data integration software provider, said he understands that with fewer resources, a transition can be difficult to get off the ground. He said CIO should ditch the "fear, uncertainty and doubt" and start investigating their options.

"Adopting new technologies today almost seems irrational if you don't know the expenses or understand the commitment. But if you can rationally look at what others are doing and how it can free up time and money, there's net benefits there," Miller said.

Miller agreed that a leaner staff should be a consideration but not a roadblock for moving forward with an open source project. "For the IT guys out there who are trying to figure out a way to keep moving forward in an environment where the options are smaller, they're looking at open source," he said.

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