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Open source gaining traction: Government departments, more businesses seek alternatives to Microsoft, others

February 27, 2006

The Indiana Department of Education's effort to outfit high schools with computers is a costly endeavor for a state strapped for cash. But installing what is known as open-source software is softening the blow.

As the name implies, open-source programming is available for users to study, modify and share freely-a sharp contrast to the proprietary software sold by behemoths such as Microsoft Corp. and Oracle.

Expensive licensing fees associated with the proprietary software sent the Education Department looking for alternatives. And if a 2005 market research report is any indication, it's not alone. The movement toward open-source programming is gaining momentum.

For the 12th quarter in a row, sales of Linux servers grew by double digits, analyst firm IDC reported in September. Linux is the most popular operating system in open-source software.

The 25 high schools in Indiana receiving computers so far through the state's IN Access program run three versions of Linux, saving the state more than $1 million, said Mike Huffman, the Department of Education's special assistant for technology.

The goal is to equip each high school student with a computer.

"If we add Microsoft [Windows] and everything else, we're looking at close to $100 a machine, Huffman said. "When you're comparing $100 to 50 cents, that's a dramatic difference."

More than cost, though, proponents cite two key benefits to open-source software. The source codes are open, allowing programs to be tailored to specific needs, and users need not fret about violating licensing agreements.

Garth Dickey, president and CEO of locally based Progeny Linux Systems Inc., which markets its Debian version of Linux, uses this analogy: Purchasing software without having access to the source code is like buying an automobile with the hood welded shut. To make repairs, he said, you have no choice but to take the car to the dealership.

Skeptics, however, warn open-source zealots to proceed at their own risk. They argue the quality of service and support, as well as the open-source products, can be low-grade.

Auri Rahimzadeh, president of the Indianapolis Computer Society who operates his own information technology company, is among the critics.

"It's free software; you get what you pay for," he said. "At least with Microsoft, I have a one-stop shop for everything I need. There's one phone number I call." Interest on rise

That hasn't stopped the curious from dipping their toes in the water. According to the IDC report, vendors sold $1.4 billion worth of Linux-based servers in the second quarter of 2005, a 45-percent increase from the same quarter in 2004. Computer heavyweights Hewlett Packard and IBM are the top sellers. Progeny sells its Debian version, developed by Ian Murdock as a Purdue University student in 1993, to HP.

Despite the growth, the Linux server market still trails that of Microsoft Windows, which recorded roughly $4 billion in revenue during the second quarter of last year. The gap is closing, however, and Microsoft is taking note, Dickey said.

"They don't know how to compete against a movement," he said. "People have the impression open-source software is written by a bunch of hobbyists. The fact is, it's written by a whole group of people all over the world."

That consortium of experts, which skeptics sometimes dismiss, convinced Ed Keen, systems architect for locally based OneAmerica Financial Partners Inc., to take the plunge.

OneAmerica, parent of American United Life Insurance Co., began using opensource software on a Java platform about a year and a half ago to process e-commerce transactions. The work had been done manually, so Keen cannot compare any cost savings the new system may have generated. But he is satisfied with the support he has received.

To solve problems, Keen visits Web site forums in which software users post questions viewed by subscribers, who offer guidance and answers. Oftentimes, he said, he searches the forums and finds his answers from somebody who encountered a similar problem, even before submitting his question.

Keen then can fix the bug immediately, instead of having to wait for the proprietor of the licensed software to make the changes.

He said OneAmerica is exploring additional open-source solutions he could not divulge yet.

A niche business

To capitalize on the trend toward opensource systems, integrators that offer their own support systems, which save companies from searching the Web, are taking advantage of the niche.

As managing partner of Server Partners LLC, Kim Brand is the developer of FileEngine, a Linux-based file server he markets as a simpler and worry-free platform for sharing files.

Because open-source software is free and can be installed on a wide array of hardware, Brand has used it since 1999 to configure servers for a number of local private schools, saving them the expense of a software license.

Clients pay on average $235 a month for his handiwork, which can be found at schools such as Immaculate Heart of Mary School, Saint Jude Catholic School and Nativity Catholic School. For that price, he delivers, installs and maintains the software.

"This is a new rail to the New Economy that people are jumping on," Brand said. "It's a train that's running down the track at 100 miles per hour."

A newcomer to the market is Moongate Technologies, founded by Julie Kennedy nearly two years ago. Kennedy, who has a decade of technology consulting experience, has grown the company to eight employees and generated $2.5 million in revenue last year.

Moongate offers support for several open-source products, including Alfresco, which contracted with the company to be its consulting partner in the Midwest. It's performed projects for a dozen companies, including Carmel-based Adesa Inc.

Moongate is seeing so much demand for open-source products, Kennedy said, that the company is attempting to raise money to build a support infrastructure similar to what might be found at commercial software companies.

Whether more companies follow FileEngine and Moongate into the fray remains to be seen. Mark Strawmyer, an executive at Crowe Chizek LLC in charge of its Microsoft custom application development practice, recognizes open source as a viable competitor. But he thinks support services will remain a niche more than a threat.

Apart from the Department of Education, the state of Indiana is staying with Microsoft as it standardizes and consolidates infrastructure services among all the agencies, which could save the state up to $20 million annually.

The process will be finished in June, said Gerry Weaver, chief technology officer and director of service operations. The state then will develop a "technology road map" to track what software the state is using and what should be considered.

"When we get into that, we will start looking more at what open source has to offer," he said. "Is it the best solution?"
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