Open-source software is shaping the new economic landscape

To talk about the benefits of the current economic recession, it is to thoroughly expose the tactics adopted by major software companies-to firmly lock customers through years of licensing agreements. According to these agreements, the annual license fee is rising and has almost never been lowered, even if the customer reduces the business scale.

The policies of major software companies mainly adopt discount methods, resulting in shelfware and renewal traps, supplemented by additional fees. For example, you are charged for migrating software between enterprise departments, using the latest hardware, or accessing internal data through the Internet.

This "art" has been continuously improved over the past 40 years, and has made great fortune for many people. Today's scene is still happening, even in a market that is constantly improving but still in trouble. Last year, the scene was staged at least twice: Oracle and SAP increased the price by 18% for the locked customer base.

However, many savvy enterprise customers have adopted new software business models to avoid the disadvantages of lack of flexibility and high cost for large software.

James Sims is the IT Vice President and Chief Information Officer of save Mart, a food sales company with an annual revenue of billions of dollars, headquartered in modestau, California. He has been used by large software companies. Before considering open-source software, save mart is bound by large software licenses from Oracle, Microsoft, and other software vendors for IT systems with 250 chain stores, 3 warehouses, and 20 thousand employees and freight Fleet services. James said that Oracle's attitude towards SAVE Mart has been particularly bad over the years, and he is always dismissive and arrogant. So he told the other party that save Mart would do its best to stop dealing with Oracle. As a result, he said he had done it.

James switched the proprietary software on the company's IT infrastructure to open-source technology, deployed the SuSE Linux operating system and the INGRES open-source database, and deployed the hobbit open-source monitoring tool, it is used to monitor the server, application software, and network running status of save mart. He also established alliances with Novell, RedHat, and INGRES to support the use of open source software.

James claims that open-source software is not only as useful as proprietary software, but is even better than proprietary software in many cases. He said that since the use of open-source solutions to replace the proprietary software of Oracle, Microsoft and HP, it has saved the company more than 50% of it costs each year.

James said: "Too many IT departments have chosen the current solution. Only time will prove whether we are wrong. Fortunately, food profits can reach 2%, so the cost difference is 0.1 or even 0.01 age points. Our IT department's operating expenses account for 0.37% of revenue, half of the average IT spending of food retailers. However, we can provide higher quality, better services and more choices at a lower cost than other food retailers. Every penny we save directly reduces costs for our customers ."
Daniel flax is the chief information officer of the New York-based investment bank Cowen group, dissatisfied with the high cost and lack of flexibility of proprietary software, he also began to consider open-source solutions. He hopes to replace these high-cost solutions with more cost-effective open-source solutions and complete the change without sacrificing quality, performance, or investing in legacy systems.

He aims to improve cost efficiency, enhance competitive advantage, and bring the biggest return to shareholders through a new method. Within the enterprise, he requires each IT project of Cowen to contain at least two of the three elements: mobility, software as a service (SAAS), or open-source software.

Frax believes that the performance of the Ingres Database is as good as that of the proprietary database, and the cost is only one tenth. He once compared the comprehensive cost, maturity and functions of many databases for an important program transaction project, and then chose Ingres. He also paid attention to MySQL, but worried that the prospect of MySQL was unknown after sun was acquired by Oracle.

Because of the commercial open-source solution, Cowen group does not have to pay the change fee (the cost will be paid when one party transfers the right to use the other party), multi-core, site license renewal, or rising support costs. On the contrary, the company is able to adjust most of its budget to innovative IT projects that meet Cowen and fragks' goals.

Peerless foods, an Australian-based edible oil and butter company, developed its own enterprise resource planning (ERP) system, and independently developed a set of physical control systems for Fully Automated warehouses. Chief Information Officer Adrian Hamilton was disappointed to find that there were no commercial software solutions on the market that allowed peerless to manage everything from invoices to product distribution. He considered business modules, but he was frightened by high costs.

As the business grows, peerless foods requires a more stable and flexible platform to update the production environment and support future expansion. Although companies in similar situations often choose proprietary software vendors directly, peerless decided to develop its own ERP and business intelligence solutions from the beginning.

The reason why we chose open-source technology later is that it can provide the best functions at only 1/6 of the price. Peerless developers use the INGRES openroad application development environment to build their own ERP systems. Hamilton estimates that the company can save three or 0.4 million dollars a year. For an enterprise with an annual income of $0.4 billion, this is equivalent to 1% of the income.

Peerless foods is even considering releasing its internal ERP system as an open-source or commercial ready-to-use product.

It is difficult to persuade some supervisors to accept non-traditional technologies. For example, they may feel that the internal IT department of an enterprise is relatively stable in using large proprietary software products, but they do not realize that they are in fact defending themselves and giving up the opportunity for free innovation, it is also unable to effectively save money. They have not yet fully realized how powerful and reliable open-source and SaaS solutions are.

Road pioneers such as Save Mart, Cowen group, and peerless foods give us the best way to use non-traditional IT technologies in enterprises. I believe more manufacturers will say no to large software companies in the future. Open-source technology already has the ability to shape a new economic landscape in the IT field.