Open Source And Cloud Computing: Open Source Is The Key To Cloud Economics

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Regular readers of this blog know that I am a strong advocate for Open Source in this cloud based world. In fact, I have argued many times here that Open Source is equally important as Open Standards in ensuring the freedom of the users. I am going to push this meme again here quoting a back of the envelope calculation regarding the costs associated with proprietary license path and open source path in the case of a scale-out model.

Old wine in a new bottle, Huh?

I am sure many would have heard the arguments regarding better ROI, lower TCO, blah, blah, blah about Open Source economics. Even though there are some hidden costs involved with Open Source, it does offer better economics than proprietary software. In fact, there are not many proprietary software that can win the game on pure economics alone. They need to bring in other factors to make it competitive. Please check out this post to learn about relevant use cases. The economic advantage of Open Source is even more visible in the case of cloud computing because it is a scale-out model than scale-up.

Jeff Atwood of Coding Horror has this great post where he does a back of the envelope calculation that shows the cost difference between scale-up and scale-out architectures. He is approaching the topic from a different angle (deciding between scale-up and scale-out architectures for a datacenter) but I want to grab his calculations to push my thesis here. In his calculations, the software licensing costs for scale-up and scale-out architectures for a fixed capital spent on hardware is as follows

	Scaling Up	Scaling Out
OS	$2,310	$33,200*
SQL	$8,318	$49,800*

What I am doing here is not an apples to apples comparison per se but it conveys the idea. If your shop is relying entirely on proprietary software, a move to cloud will not make much sense. If you are a Microsoft shop, you can mitigate these costs by moving to Microsoft Azure cloud than any other cloud provider, where your licensing costs for Microsoft software is going to be big. If you rely on other proprietary vendors, you are terribly out of luck and your software licensing costs are going to blow up big time, defeating any logic you might have used on saving money by moving to the cloud. Two years back, before Cloud Computing space matured to this level and before we even had any hint about Azure, I wrote this post and argued that proprietary vendors should change the way they license their software.

I am not advocating that we need to ignore the proprietary systems in the Cloud Computing era. Even though I would prefer to use only Opensource and Open Standards based vendors, I am also happy to see proprietary vendors participating in this space. The idea behind this post is to highlight the inherent limitations of the proprietary licensing in its current format and to suggest that vendors using proprietary licensing for their products should adapt themselves to the changed computing landscape. If they fail to adapt and modify their licensing to the cloud computing environment, they will end up losing the game in this marketplace.

Even though there is some progress now on that front, there is still a lot to be done before proprietary software can become competitive along with cloud economics. Even if the proprietary vendors change their licensing costs drastically to meet the challenges of the scale-out cloud world, the advantage of open source economics is going to stay.

Conclusion

If you are a startup or a SME, you should definitely take the open source route to the cloud. Otherwise, you will lose out the economic advantages of using clouds. Even if your organization is a big enterprise, the ROI is going to be much better with open source than a pure proprietary approach. I am sure big enterprises cannot change completely to open source but they could tap into open source wherever possible and save big when coupled with the cloud economics. What do you think? Feel free to poke holes in my argument.

Related articles

• Guest Post: The Apache Software Foundation’s Open Source Approach (ostatic.com)
• NASA, Rackspace Join Forces in Open-Source Cloud Computing Venture (dailyfinance.com)
• What does Cloud.com do? (zdnet.com)
• Lew Moorman discusses how the Cloud is ready for Enterprises (rackspacecloud.com)
• Cloud Computing Calms Open Source Warfare (tjantunen.com)
• Reducing the Cost of Business Intelligence with Open Source (itexpertvoice.com)