What is a Cloud Server?

October 9, 2009 in Cloud Computing | Leave a comment

Every new development in technology brings with it a bewildering array of new names and concepts Cloud technology is no different. Never mind the “forget what you know” marketing hype. In this article you will see just how attainable the technology is and how little there is to learn. At its heart Cloud Computing consists of a few tools elegant in their simplicity yet profound in their impact, not least of all to the bottom line!

Genesis:
Cloud starts with a revolutionary, but now rather old and familiar technology, that is virtualisation. Virtualisation allows you to install an operating system on a generic layer overlaying the hardware. This simple concept offers two game-changing features.

  1. Portability: The system no longer needs awareness of BrandX hardware, it sees only the generic interfaces of the Virtual Environment. The operating system can now be moved from one physical machine to another as long as both share the virtual environment.
  2. Resource Sharing: Multiple operating systems can share a single set of hardware with the virtual environment managing allocation of the underlying physical resources.

From the operating system perspective and low-level technical caveats excepted, nothing has changed. Your Windows or Linux machine is still a Windows or Linux machine. This is the beauty of Virtualisation, it breaks the tie between operating system and hardware without impacting either. Virtualisation means vanilla installations can be archived ready to be copied and configured when the need arises.

Those familiar with products such as VMWare will know that this technology has been around for years. To understand how Virtualisation became “Cloud” we need to look at Amazon’s ingenious use of the Xen virtualization suite.

Amazon were faced with a problem familiar to many retailers with seasonal peaks. Their infrastructure was as big as their Christmas peak. Virtualisation offered them a way to scale their operation up and down to fit their business volumes leaving clean redundant hardware during lulls. Using a combination of the Portability and Resource Sharing features of Virtualisation, and adding an interface for third party consumption Amazon’s Elastic Cloud was born allowing public use of Amazon’s redundant server and storage space.

An Operational Revolution:
As we’ve seen, Virtualisation changes nothing at the operating system level, a server is still a server, Linux is still Linux, Windows is still Windows. What has changed is the process of provisioning. Until the advent of Cloud, the process of commissioning servers involved either purchasing hardware or outsourcing this to a third party in the form of a server rental agreement. The lead time could be measured in days because it involved wires, screwdrivers and racks. By contrast, Cloud uses redundant hardware, that is hardware already installed and tested by the vendor. The specification for a server is no longer translated into a physical hardware shopping list but to a “virtual” allocation of resources from the existing Virtualised pool. At a stroke provisioning times have been cut from days, or even weeks to minutes.

Shorter provisioning times and easy resource reallocation allows the consumer far greater granular control of infrastructure spend and has revolutionised pricing structures with many vendors now offering rental agreements of 1 hour rather than the more traditional months and years required for them to preserve margin against hardware bought to serve a particular client.

Cloud servers are a genuine win-win, the vendor passes on reduced overhead through better resource allocation and more densely populated data centres while the consumer enjoys flexible hour-by-hour rental charges on a platform their IT staff will already with and the benefits of rescaling only a few minutes away. For the many businesses still sitting on a depreciating asset as large as their seasonal peak, Cloud servers are ripe fruit waiting to be harvested.

Retailing Software Selection for the Multi-Channel Market

June 25, 2009 in General Comments, Retail | Tags: , , , , , , | Leave a comment

For growing retailers particularly those in the multi-channel retailng market, technology can be a major hurdle to the smooth growth of the business. Too often what would otherwise be considered a small incremental adjustment in operational strategy comes hard up against the revenue model of the business’ retail software partner.

Retail software vendors are forced to make best guess feature assignments into multi-channel retailing software modules, these modules in turn each bring with them a step change in licensing costs. As a result the retailer can find themselves at the mercy of an arbitrary business decision on the part of the software vendor that bears no resemblance to the growth plans of the retail business. These constraints can cause delays in piloting new sales channels, testing a call centre to support a mail order channel for example, can become an unnerving and expensive leap into the unknown. Innovative retailers find themselves being offered not support for a pilot sales channel but large modules of functionality that make a myriad of assumptions regarding “best practice” according to the multi-channel retailing software vendor.

Retail software vendors bring useful expertise to any business process development, yet software vendors also bring with them pre-made solutions, not to mention assumptions about received wisdom in retail operations, that left unchecked, can constrain innovation and escalate investment requirements. Having seen many retail software implementations, viewed from a technical, problem-solving perspective with the usual imperatives on quality and TCO, software vendors look for generalisations that allow aggregation over many clients, the software vendor therefore, makes trade-offs that don’t necessarily well serve the innovative retailer.

If generic productised software constrains the personality of the retailer undermining the very character which sets the business apart from it’s competition, bespoke software vendors offer a far more innovation-friendly experience. Bespoke software providers can offer unique solutions mapping directly to the changing business processes of the retailer. While this approach offers the retailer a distinct competitive advantage, the solution comes at a high cost. Bespoke software, by definition, has not previously been production proven, as a result far fewer assumptions can be made regarding it’s fitness for purpose. With this uncertainty comes a need for higher levels of due diligence, requiring the recruitment of specialist management personnel; experienced retail staff from within the business have to be repurposed to reconcile their understanding of the business’ requirements with the emerging software i.e. test the software’s suitability. Finally, building from the ground up will certainly require more software engineers! While great results can be achieved with bespoke software, a very firm hand and visionary influence is required to ensure your software development project does not become the cuckoo in the nest, draining resources and distracting focus.

For the innovative retailer without the luxury of unconstrained budget, the turnkey solution and bespoke routes are not mutually exclusive. Any turnkey solution provider will of course be capable of modifying the solution that they created. Ability to modify software however is not a pure function of familiarity with that software. Multi-channel retailing software vendors like all turnkey vendors are designed to sell the generic, their business models are formed around the idea of evangelising on why the choices the software makes out of the box are the best solution to the problem the retailer faces, not around reinventing their product to serve a one-off view of the world that makes the individual retailer unique. While turnkey software vendors perhaps don’t offer the flexibility of the bespoke route, their generic base offers a far higher degree of reassurance that the end product, complete with modifications is at least partially production proven.

In reality, no retailer of a significant size is likely to have become so by being so bland in terms of business process model that a simple turnkey software solution can serve all of their requirements. Software customisation therefore is an essential part of any system implementation. With this in mind, the wise retailer will assemble a shopping list of requirements and try to match first a software system to those requirements and then a set of modules within that system. This second step is crucial as retail software vendors typically price system licences by module. So we return to the problem that the retailer business process map seldom fits squarely into a neat set of modules, but lies across a number of more or less utilised modules which then require some customisation to leverage them in a way that best serves the uniqueness of the retailer business.

Having chosen a vendor and committed to the base license costs of the system the multi-channel retailer has perhaps without much recognition of the fact, stepped deeply into a relationship with the software vendor. The software vendor is now in a unique position to serve the changing business requirements of the retailer. As the creator and license owner of the base system, the turnkey software vendor appears to be the only outlet for customisation assistance. Large proprietary base software systems bring with them a large burden of knowledge management and transfer, software professionals can’t simply be recruited with fully fledged and relevant skills, training and retaining software professionals in the unique base system therefore accounts for the premium price tag which accompanies such customisations.

This principal of premium service costs and vendor lock-in, pivots around the retailers need to license a base system. Were the base system open to all bespoke software vendors to modify, the premium chargeable for those skills would be reduced significantly, and with the increased competition, the imperative to better serve the retailer’s needs, conversely, would increase. Similarly, if the base system came without license costs, there would be no constraint on the retailer with respect to innovative pilots, such as testing new sales channels, the functionality would be available without substantial license cost increases, software vendors would have no motive to package their software into modules other than for the obvious logical management of functionality.

Base system licenses therefore are the lever by which the traditional software vendor business model works. Removing such a lever may seem like dreamy egalitarian musings, yet the status quo is facing just such a revolutionary movement. For many years, small bespoke software vendors have recognised either explicitly or implicitly, that the components of their systems can be classified into two broad categories, asset and liability. Like the turnkey software vendors, perhaps even in response to them, bespoke software developers realised that creating a base system on which to build reliable solutions dramatically improves productivity and reliability. Yet for the bespoke software vendor, a base system while levelling the competitive landscape, is difficult to license without moving to a composite business model.

In stark contrast to a turnkey vendor, a bespoke vendor’s base system is not an asset to them, but a liability. For small bespoke businesses in particular, the overhead of maintaining and modernising a base system can be overwhelming. For a bespoke software vendor then, a new way to mitigate the liability is required. As bespoke vendors tend towards open technologies and standards due to the greater availability of skilled staff, know-how transfers far more easily from software vendor to software vendor. This phenomenon has been utilised by individuals within the software industry to create, at first, small generic solutions to frequently encountered problems such as “how do I reliably save to a database”, and then shared, first informally, among acquaintances. As the scale of these solutions grew and the number of contributing participants increased, a formal structure of open knowledge transfer was created among software professionals. This movement today is known as “open-source”.

Today the open source movement boasts many fully fledged base-system products for the multi-channel retail market and with these products a new class of software vendor has emerged. Open Plus Ltd is such a software vendor, bringing industry vertical awareness once seen only in the turnkey providers yet using license free base system technologies and open standards that allow the retailer both to swap vendor at their leisure and focus investment on the uniqueness of their business rather than on a generic system that then must be modified at a premium. Andrew Sykes, M.D. of Open Plus Ltd explains, “Because software vendors like Open Plus employ open standards in their software customisations, the ready availability of capable staff allows us to scale faster and access fully-formed knowledge workers in a fraction of the time a traditional proprietary vendor might”.

Retailers selecting a multi-channel software solution have a number of choices open to them. Traditional (proprietary) software vendors can bring years of experience with them and well formed generic solutions, yet may ultimately constrain the direction of the business, either due to inflexibility of product, or required investment. Bespoke software development services are typically far more flexible, but can have a hidden cost in internal resource utilisation required to support the development process. For retail businesses with innovative plans and a careful eye on budget, a new breed of license-free vendors can, if carefully selected, offer the vertical sector knowledge, and production proven solutions of the traditional vendor, but with the flexibility and innovative technical mindset of the bespoke software development house.

Leveraging Open Source ERP With Agile Software Techniques

June 25, 2009 in General Comments | Tags: , , , | Leave a comment

Everyone knows that ERP systems are large and costly. They take years to implement then constrain business processes for years to come. The sheer scale of the applications means that it is impossible to justify the investment for all but the most joined up and revolutionary business process overhauls.

ERP systems are incredibly complex applications and ERP vendors are designed to provide solutions to large scale problems faced by big clients. All of this big thinking leaves departmental leaders with innovative ideas somewhat under-whelmed when their small, elegant solution to a pressing problem means dedicating three months to putting together a business case and presenting to a board of directors, in the hope of securing a place on the capital expenditure budget for three years from now.

For small, elegant solutions to large problems another approach is needed: an approach that allows revenue budgets to be applied in a low financial risk profile, with tightly focussed iterative roll-outs that allow early return on investment; clear and frequent stop points that allow current investment to be retained; and no need to commit to a seven figure change programme.

This is not the domain of the traditional large ERP vendor. It requires a different approach to business and technical analysis, project management, quality control and, of course, software customisation. Such a solutions provider must of course be an ERP aware outfit. Leveraging ERP in an agile, cost effective way cannot be accomplished without strong awareness of large scale ERP and business process modelling.

All modern ERP systems allow powerful integration interfaces for other applications. This is necessary as ERP owners often leverage the ERP system to create better inter-departmental links or improve communication throughout the supply-chain. In these environments, an ERP vendor cannot assume homogeneity, so must open the application to access from other systems.

While many software development houses specialise in agile software development, and most ERP vendors have first class software customisation capabilities, there are far fewer who bridge the gap between the two.

Open Plus Ltd are a specialist open source ERP business who bring together agile software methodology experts, schooled in early ROI analysis and implementation techniques, with ERP specialists from large scale implementation and integration backgrounds. Open Plus has developed a unique set of tools and processes aimed at addressing just the kind of small, elegant solutions that are usually overlooked by the traditional ERP vendors.

This powerful combination of agile methodology and in-depth ERP knowledge brings ERP leverage to innovative departmental leaders, freeing them from the constraints of large-scale corporate strategy.

Retail Software, Vendors Without the Financial Leverage

June 25, 2009 in General Comments | Tags: , , , , , , | Leave a comment

We are often reminded that retail software implementations are a partnership. In the midst of the current global turmoil, the need to choose partners carefully has been brought into stark relief. Open Plus Ltd, bring a business model designed for difficult times that introduce a whole new selection criteria to retail partners and ERP vendors, the watch-word is leverage.

With financial strains starting to hit high street retailers, furnishings firm, Rosebys being among this week’s casualties, it’s becoming clear that innovative bottom-line savings are to be the crucial survival differentiator for 2009.

Recent developments in the financial markets have introduced the term “leverage” to the retail Zeitgeist. The act of using debt to amplify the effects of the business’s revenue generating model, or leverage, is what allows a hedge fund to generate such large returns. Leverage however is not the lofty preserve of esoteric financial transactions, but the fuel that drives our entire enterprise ecosystem.

With the cost and availability of capital increasing, prudent retailers are seeking inventive new ways to decrease reliance on the financial leverage, until recently, readily accessible from the now ham-strung banking sector.

Like great retail businesses, great retail solutions has been built, not solely on the equity investment of shareholders, but on the financial leverage extended to software vendors by banks. De-leveraging a retail business will take innovative new operational strategies and with that, innovation within the retail software industry. Yet with retail software vendors facing the same leverage constraints as the retailers themselves, innovation will inevitably come at a new price.

Just as software vendors are likely to face unprecedented downward pressure on price, they are also going to find themselves instrumental to retail de-leveraging strategies. Margins can of course be squeezed and capital reserves drawn upon, but software vendor’s pockets do not have infinite depth and the extent to which these reserves can be drawn upon will depend on the individual software vendors reading of the financial future.

The question for the prudent retailer, having carefully constructed a de-leveraging strategy, is “to what extent is my software partner leveraged?”. To answer that, the retailer must look to the vendor’s approach to product development. Heavily leveraged product development is a double edge sword for the retailer. Not only can the retailer expect to face price increases, but the rate of product innovation from the software vendor is also likely to be reduced.

Open Plus Ltd is uniquely placed to answer the leveraging question. As a specialist in open source software, product development has never been a function of how much debt or investment the business has available to it. Product development exists as a community effort aggregated over many vendors. While other vendors seek to find solutions to the debt drought open source products chosen by Open Plus continue to accelerate in their rate of innovation.

World opinion is united in anticipation of tougher times to come. Successful retailers will be those that transition to modified business models as smoothly and painlessly as possible. To facilitate this transition, retailers will need a software partner who specialises in agility and whose business model is not predicated on the easy availability of bank credit. Open Plus stands uniquely poised.

Challenges Ahead For Retail Software

June 25, 2009 in General Comments | Tags: , , , | Leave a comment

As margins are squeezed and the credit driven spending of the last ten years is replaced by a more sombre and frugal mindset on the high-street, retailers find themselves consolidating infrastructure to drive out cost, retail software faces some serious challenges to support the new economic climate. Open Plus Ltd knows retail solutions and breathes agile software development.

Just as retailers find themselves with too much floor-space or management heavy processes, the climate for multi channel retailing software has also changed radically in the last twelve months. With uncertain times ahead and unprecedented downward pressure on price, retail software must accommodate a radically different approach to the retail environment.

Retail software infrastructure and the people and processes supporting it will need to be more flexible than ever before. Just as the future of the market is now less clear, the requirements of the software that supports it are more subject to change. As bottom line pressure drives retailers to innovate, retail solutions specifications will become more emergent.

Open Plus’ experience in agile software development means that our software has always been structured with the intention of supporting rapid change and emergent strategy. With low internal operating costs, short software development cycles and years of experience in minimalist approaches to supporting business processes with enterprise software, Open Plus bring the execution of innovation through technology to the retailer.

Software vendors are fond of describing themselves as “software partners”. Partnership will now be a function not of how vast the software vendor’s array of features are, but how quickly they can respond to the rapidly changing needs of the retailer and the costs associated therein. Open Plus has been built for this challenge.

Retail Software: Proprietary, Bespoke, or Open Source?

June 25, 2009 in Retail | Tags: , , , , , | Leave a comment

Andrew Sykes. CEO of Open Plus Ltd takes a stroll through the technology options open to the multi-channel retailer and explains his own preference for open source.

For growing retailers particularly those in the multi-channel retail market, technology can be a major hurdle to the smooth growth of the business. Software vendors can foster innovation at best and constrain development at worst.
Retail software vendors package features into generic modules, typically each module is licensed separately. A retailer with specific operational needs will find themselves drawing from a shopping list of features spread across many modules, but with only partial utilisation of each.

The constraints of the vendor’s packaging policy can mean small experimental projects using new features can have disproportionate price tags if they happen to straddle the module boundary. Innovation as a result is stifled. Retail software vendors attempt to counter this problem by leading retailers down the “best practice” path for which the software was designed. Unfortunately, best practice implementation of generic software leads to homogeneity, the retailer’s nemesis.

Bespoke software while addressing the homogeneity problem, comes with far greater risks, higher costs and a more profound and continued investment of money and energy in maintaining any competitive advantage that the software provides. Bespoke is therefore not an option for most, instead choosing a software provider with a base system which can be customised.

Having chosen a vendor and committed to the base license costs of the relevant system modules the multi-channel retailer has stepped deeply into a relationship with the software vendor. The software vendor is now in a unique position to serve the changing business requirements of the retailer. As the creator and license owner of the base system, the turnkey software vendor appears to be the only outlet for customisation assistance. Large proprietary base software systems bring with them a large burden of knowledge management and transfer, software professionals can’t simply be recruited with fully fledged and relevant skills, training and retaining software professionals in the unique base system therefore accounts for the premium price tag which accompanies such customisations.

This principal of premium service costs and vendor lock-in, pivots around the retailers need to license a base system. Were the base system open and accessible to all software vendors to modify, the premium chargeable for those skills would be reduced significantly, and with the increased competition, the imperative to better serve the retailer’s needs, conversely, would increase. Similarly, if the base system came without license costs, there would be significantly less constraint on the retailer with respect to innovative or experimental pilot projects.

Today the open source movement boasts many fully fledged base-system products for the multi-channel retail market and with these products a new class of software vendor has emerged. Open Plus Ltd is such a software vendor, bringing industry vertical awareness once seen only in the turnkey providers yet using license free base system technologies and open standards that allow the retailer both to swap vendor at their leisure and focus investment on the uniqueness of their business rather than on a generic system that then must be modified at a premium. Because software vendors like Open Plus employ open standards in their software customisations, the ready availability of capable staff allows them to scale faster and access fully-formed knowledge workers in a fraction of the time a traditional proprietary vendor might.

The traditional retail solutions vendors see the value of open source too. Increasingly their product development includes open source products, yet there’s not much evidence that these cost reductions are being passed on to the client. Perhaps the reasons for this are best illustrated by their ambivalence to open source. Scare stories about the lack of security involved in community projects abound, yet since most of the vendors outsource software development to developing countries, the model differs little. The criticism not only reveals a lack of understanding of open source, but of security issues in general. To make real gains from open source software that can be passed to the client, a business needs a complimentary culture not a set of internal conflicts.

Retailers selecting a multi-channel software solution have a number of choices open to them. Traditional (proprietary) software vendors can bring years of experience with them and well formed generic solutions, yet may ultimately constrain the direction of the business, either due to inflexibility of product, or required investment. Bespoke software development services are typically far more flexible, but can have a hidden cost in internal resource utilisation required to support the development process. For retail businesses with innovative plans and a careful eye on budget, a new breed of license-free vendors can, if carefully selected, offer the vertical sector knowledge, and production proven solutions of the traditional vendor, but with the flexibility and innovative technical mindset of the bespoke software development house.

Software Is Not The Solution

June 25, 2009 in General Comments | Tags: , , , | 1 comment

Given the pace of today’s technology it’s never been easier to access business software that helps you to express the individuality of your business. It doesn’t require a degree in computer science; a geekish obsession with erp software systems or an army of consultants. When you cut through all the smoke and mirrors surrounding technology you arrive at a very simple truth, a truth that you already apply to the rest of your business.

If you find yourself terrified by business management software; overwhelmed by the seeming morass of systems and hardware required to run your business and appalled by the associated cost, it’s most likely not your fault, nor are you alone. Supporting all the complex infrastructure your business needs is a major accomplishment in itself.

But to achieve the lean business system, empowered, but not obscured by technology, we must first dispel the myths that surround business software. We must reclaim the business from the techno-babbling software vendors by looking at what lies beneath their smoke and mirrors.

If the current economic situation tells us anything, it’s that we don’t save money by going shopping. Families feeling the pinch of the credit crunch have pared back their spending to bare essentials, that is, identifying needs from the wants generated by advertising campaigns. Despite every point of sale on the high street screaming “Christmas discount!”, retailers still report slow sales. The reason is simple, shoppers aren’t looking for ways to spend money, they’re looking for the items on their shopping list.

Marketing serves a range of purposes from identification of need through to the creation of want. Emotionally it can be hard to discriminate between need and want, but as shoppers are showing, economic adversity makes the division far easier. Business software vendors, like retailers, upsell by blurring the lines between need and want.

The flagship strategy of the business software vendor’s marketing department is to redefine business management software as “solutions”. To illustrate how ludicrous this is, imagine your grocer selling a “grocery solution”. Would you allow the retailer to judge what was best for you and your family? Would you pay a premium to have the grocer train your family in the best way to cook the exotic ingredients? Would you gladly welcome the additional premium garbage collection service every week, to empty your fridge of rotting perishables? Worst of all, what would you think if your grocer told you he could only remove items from the grocery solution, as part of a premium customisation service?

It’s an absurd idea, yet this is how a software solution works. When you buy a business solution, you’re buying a generic system that suits no-one perfectly, you might not need all the features, but if you’re going to get value out of that system, you better buy the training! Of course you don’t have to use the whole system, just like you don’t have to eat all the food in your fridge, but you’ve still paid for it and you’re still going to have to maintain the whole business solution whether you use it or not. You could customise the solution to remove these items, but then you’ll pay for the customisation not to mention a maintenance premium.

No one would buy a generic grocery solution, even if it did seem like a bargain, because however much you hate grocery shopping, the cost of relinquishing control of the weekly shop to the grocer would be a whole lot worse, not to mention inappropriate. This sleight of hand transformation of business management software into business solutions has achieved with seven figure sums, what no grocer would dare try with three figures.

Like people with fridges overladen with high-margin confectionery, businesses with business software brimming with enticing features quickly get out of shape. Before long, no-one can imagine living without the features and what’s more, ill-disciplined processes lead to even greater appetite for new business software “confectionery”. Is it any wonder then that you find yourself struggling to keep business processes lean and technology costs down in the face of ubiquitous solutions rhetoric?

The business solution myth feeds on the fear that tells us technology gives competitive advantage and more technology gives more advantage. By generalising business process, the fear becomes self-perpetuating, the more like your competitors you become, the more you are required to upgrade and upscale your technology to out-perform them. Meanwhile, the business solutions vendors become more ubiquitous selling ever more licenses.

In every area of business, we strive for competitive advantage through differentiation, yet business solutions vendors are poorly equipped to serve this need, their highly lucrative licenses mean they positively penalise differentiation through high customisation and maintenance fees. Businesses are expected to compromise on differentiation, or ignore the large costs in light of the candy shop of features presented to them. This feature confectionery is the loss-leader of technology sales.

Differentiation is not impossible, nor is it the case that all software vendors base their business model around license sales. The recent abrupt about-turn in the economy has seen an upsurge in interest in open source. Open source vendors typically charge nominal license fess and in many cases no license fee at all. Their model tends to be more consultative, the open nature of their business management software means no single vendor has a monopoly on services which as a result are more competitively priced. Without recurring license costs, open source vendors make margin from consultative activities associated with differentiation, not from reselling generic systems.

Open source, is not for everyone, there are those who will be well served by the traditional solutions providers and there are those for whom the idea of stepping out of a bloody battle with highly similar competitors would involve far too much of a loss of face. The reality of course is that mature open source systems are a far newer concept than traditional solutions vendors. Stepping off the solutions conveyor belt shouldn’t be seen as a poor indictment on past judgement, but rather capitalising on modern technology trends to closer align with business goals.

Regardless of the business’ choice of vendor, software is not the solution, businesses need to leverage technology to empower business process, and that means not seeking solutions. To seek a solution is to walk into the confectionery store without a shopping list. To succeed, businesses must seek technology partners who value long-term relationships and will collaborate on finding the correct solution for the business.

Software is not the solution, there’s no quick fix, but that applies to your competitors too, like everything in business, if it’s easy it’s not a differentiator. Given the deep penetration that modern business software has on the enterprise, looking for a solution closes a vast array of competitive differentiation options that the business can ill-afford to lose. Software is not the solution, the solution is the problem.

Financial Squeeze Is Open-Source Tipping Point

June 25, 2009 in Customers | Tags: , , , , , , | Leave a comment

The recent financial turmoil may not offer many reasons for cheer, but for those evangelicals with a vision for lowering expenditure, the audience is growing and even the ranks of corporate mainstream are now listening.

Those profligate IT departments, which ran in excess of their typical 2% of revenue target during recent happier financial times, will find an increasing number of eyebrows raised in their direction as revenue figures plummet. Leading software vendors have been criticised for adding to the pressures during a recent round of hikes in support costs. Prominent among these, but by no means the only example, was SAP’s recent spat with The UK and Ireland SAP User Group over a 29.4% increase in maintenance costs. Despite strong protestations from SAP spokesman Bill Wohl – “I can state emphatically that no component of this decision is about improving SAP revenues in reaction to industry market slowdown. This is purely a reaction to changing customer needs.” – strong downward pressure on technology budgets was no doubt a major contributor to the frosty and rather cynical murmuring among clients left to balance the books.

Waiting in the wings are a new breed of software vendors. Their view of the world is radically different, offering software at dramatically lower license costs or in some cases, no cost at all. Andrew Sykes, Managing Director of open source ERP vendor Open Plus Ltd explains it like this; “we do this because we are passionate about software and believe passionately in the positive impact it can have. We want nothing more for the legacy of our R&D than to see the world benefit from our endeavours”. Open Plus is one of a number of new companies whose goal is to level the playing field for software buyers. These “third way” companies offer the low cost benefits of open source while adding the industrial rigour required of mission critical systems.

The old maxim “no one ever got fired for hiring IBM” may have taken a beating in recent years, but in the current economic climate the real career-stopper could turn out to be renewing licenses and support agreements at an increased rate against a backdrop of shrinking revenues.

Business Turns to Open Source Software to Beat the Recession Blues

June 24, 2009 in General Comments | Tags: | Leave a comment

With recession biting, open source provides a route to continue ambitious business development plans and it’s good for the environment too!

As belts tighten, ambitious and expensive business software plans are being viewed in a new light. Yet in a time when competition becomes increasingly tough businesses can ill afford to take a bunker mentality and simply sit out the turmoil. Un-watched business management software systems quickly turn into legacy problems further compounding and delaying hopes of recovery.
Businesses who have taken an irreverent attitude to the status-quo, looking beyond the marketing scare tactics of the big vendors to make their own judgements on open source technology find their technology plans in rude health. Angus Gow, Technology Programme Manager for iwantoneofthose.com, explains “open source was a no-brainer for IWOOT, for the price we were quoted for a single year’s license from a big proprietary vendor, we have been able to deploy and continuously refine our back-end systems allowing us to make big savings while maximising control and responsiveness to changing business needs”.

The darkening market conditions, leave IWOOT’s technology partner Open Plus Ltd similarly unperturbed. Andrew Sykes, CEO of Open Plus cheerfully reports “businesses don’t want to shelf long anticipated retail software plans, but big price tags from proprietary vendors don’t stack up against a bleaker cost benefit landscape. This doubtlessly explains the near five fold increase in enquiries coming through http://www.openplus.co.uk.”

Open source software adoption was already accelerating before the phrase “credit crunch” was coined. Apache, the open source web server has 70% Market share; corporate desktop administrators have migrated users to the vastly more secure Firefox web browser finally laying to rest years of security threats from Internet Explorer; and even Carphone Warehouse and Tesco are selling crunch-busting laptops with Linux operating systems, challenging the Windows XP status quo.

For businesses the cost savings invoked in choosing an open source route are so profound they often invoke incredulity. Further, due to the permissive licensing of open source the ways in which money can be saved, or investment recouped are limited only by the imagination. The headline cost savers include:

Licensing: typically, though not exclusively, use of open source software is free. Experienced technology managers know that buying a license is not a solution, but rather, it is permission to begin tackling the problem using the vendors toolkit. Six and seven figure price tags on licences alone are common and frequently accompanied by a similar implementation cost. Finding a comparable open source product to that proprietary application can slash a project budget by 50% at a stroke!

Maintenance: Angus Gow comments “maintenance costs are a real innovation inhibitor, each time you want to bring the vendor’s generic solution closer to your business, maintenance costs take an upward leap”. Open source is different, because the product is continuously being developed by a highly motivated community, you pay only for that customisation that adds specific value to your business, the base product is the responsibility of the community.

Hardware: Commercial software vendors typically have a “preferred” hardware vendor and lock the customer into hardware upgrades. Proprietary software is typically compatible with a far smaller subset of hardware, so the ability to recycle is limited. By comparison open source software by nature of it’s diverse community of creators has a “run anywhere” mentality. Couple this with the greater reconfigurability that accompanies an open software architecture and you have a system that not only drives down your hardware budget but allows you to reduce your environmental impact into the bargain.

Customisation: Software professionals themselves are not immune to the powerful revenue generating techniques of the proprietary vendor. With a promise of higher earning potential, they pay premiums for training and certification and annual fees to retain membership to special information networks. All of this is free to the open source technician, little wonder their rates are lower!

Re-licensing: choose your open source project carefully and you can turn a liability into an asset. Not only is it possible to implement your technology project at a fraction of the price, but some open source licenses such as the Apache Software Foundation’s ASL license allow you to sell the customised product to others.

Every cloud, it is said, has a silver lining. Open source technology offers an egalitarian approach, driving out the big margins of the traditional vendors and empowering businesses to develop at their own pace while reducing hardware consumption demands and therefore carbon footprint. The gains of open source are hard to ignore in a bear market.

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