Paradox about price and value-Comments on "Linux free talk"

The open-source software represented by Linux and the exclusive software represented by Microsoft software have been constantly escalated over the past two years. Among many disputes, the first reason for choosing Linux software is "free ".

However, the problem is actually not that simple. For any IT investment, the initial software purchase fee only accounts for a small portion of the Total Cost of Ownership (TCO. TCO not only includes initial procurement and execution costs, but also is subject to a number of cost factors, such as failure repair, Product Support, and all other costs that need to be spent within the entire period of use of this product.

Total Cost of Aquirement (chloroform) includes both hardware and software costs and execution costs for new systems, IT also includes the cost of IT department staff and the cost of business termination, because the ongoing business needs to be terminated when new technologies are deployed. The cost of first-time procurement and execution is easily quantified. Trained people can calculate this number within a few days.

Price is the embodiment of commodity value. The price issue is actually closely related to three factors.

First, cost.

If you ask a user who is evaluating open-source software, "are you willing to pay for it or use it for free ?" -- The answer is usually the latter. However, in fact, the business model of open source software is increasingly represented as a "service model", that is, after users buy open source software at a very low price, additional costs, such as installation and commissioning, education and training, product upgrades, and intellectual property risk factors, must be indirectly paid to TCO. In the simplest example, a washing machine with excellent services is always more expensive than a washing machine without services, because with the passage of time, uncertain repairs and services also need to pay costs.

A recent IDC survey showed that Windows has a lower TCO than Linux/Unix/Mainframe, and its learning and maintenance skills are easy to learn and use, making it easier to bring to the market. According to IDC data, apart from Web Serving, the cost of other aspects of Windows is lower than that of Linux, and its TCO is 11-20% lower than that of Linux. This example is not hard to understand. For example, in China, even in the most remote town, it is possible to find people skilled in using Windows, which makes maintenance and support very convenient.

Second, value.

Value is not only the cost of initial purchase or the cost of ownership, but the "value" of IT is to use IT to make the business more effective. Warren bayfete, the world's second richest man, is the CEO of the American Berkshire Hathaway investment company. He believes that price is what you pay, and value is what you get from the cost. The value of IT reflects the relationship between costs, risks, business department benefits and IT department benefits.

When evaluating value, an enterprise must consider not only the cost, but also the benefits IT can obtain and the risks IT may bring.

Third, risks.

For large enterprises such as China Telecom and finance, TCO may not be the primary consideration. The top priority of IT procurement is "risk ", one of the important measures to reduce risks here is the security and stability of the system. If the billing system of a telecom company goes down for half a day, or the account management system of a bank user is attacked by hackers, the losses to the business department will be huge. The more stable and secure the product, its superiority will also be reflected in the price, few people refuse to adopt because the Unix platform is expensive.

In addition, when analyzing "Linux free talk", we encountered several problems:

1. Is commercial interests an economic impetus for the development and growth of open source products?
2. What are the cultural elements of Linux?
3. Is Linux originated from the community? Is it a spontaneous phenomenon in society?

We will continue to pay attention to these issues.

Source: http://www.zdnet.com.cn/