|
|
Posted Feb 11, 2005
Part II: Corporate Desktop Linux - The Hard Truth
|
by W. McDonald Buck, Retired CTO of World Bank
 In Part I (of IV) of Corporate Desktop Linux: The CTO's Hard Truth retired CTO of World Bank W. McDonald Buck wrote about the difficulty of making accurate real world assessments of Linux vs Windows TCO analyses: If Windows laden computers are less expensive or equal vs. no OS in cost for Joe Hacker.. where's the savings for a large buyer who gets a volume discount? In this, Part II, he addresses the hard cost savings for companies of switching the desktop operating system, as distinct from the applications, as he sees it.
Part II: The Hard Cost Savings of Corporate Desktop LinuxA number of cost studies have been published. In addition to their biases and their other flaws, they generally evaluate replacing both servers and desktops with Linux. There is no question that Linux is successful in the server market, where almost any fair analysis concludes it will save money. This article focuses exclusively on the desktop side of the equation, since for a decision maker, these can easily be separated into separate business decisions.
A different way of framing the question will help get at this. Say a smart company makes the decision to save a lot of money by moving all its servers to Linux. Many have begun doing so. And of course you don't have to change operating systems to save money on applications. The press is full of reports of people dumping Internet Explorer for Firefox. Switching from Office to OpenOffice for all but the most demanding users is a smart move with a high payoff. Having done those things, the company now wants to know, how much extra can be saved by the final step of changing the operating system itself? And, what are the other costs, risks and benefits of doing that. To keep the scenario simple, we're assuming too that this will be done at a time when the desktop equipment is also being replaced.
The news is good, but not as good as we like to believe.
We know that Windows costs money, and we believe that overall, a Linux desktop must cost less. If this is so, why is the cost benefit analysis unable to sway more migration on the desktop? Part of the reason is that switching the operating system is a more drastic step, precisely because it forces the migration of all the applications at the same time, increasing the switching costs. The hard truth is that for the majority of the desktop market, the capturable, present value cost advantage to the operating system change (as distinguished from the other changes) doesn't seem to outweigh the costs and risks of doing it, unless you put a high value on the benefits of Linux. Those benefits, which are so compelling to us, are not compelling to the target audience. This article explores the hard dollar cost side of this heretical assertion. A follow-up article looks at the benefit side.
Before getting to the analysis, I want to also briefly pay homage to the idea of changing the whole computing model, as many suggest, to more of a thin-client central server architecture. I think companies will increasingly do this, but corporate environments change slowly, and for many of them this is a big change. In large part this whole series is about pressing for the winnable victories first, rather than the more radical changes. Since thin-client looks like a more radical change to the corporate world, I'm going to stick with analyzing the less radical move, acknowledging that the other may be a big win if it can be sold.
As a point of reference I'll use the 2004 update of the TCO analysis done by Cybersource Pty. Ltd, entitled Linux vs. Windows, Total Cost of Ownership Comparison (.pdf). This is a very pro-Linux report (egregiously so in my view). Unfortunately, I found a number of errors (11), including 5 pretty obvious arithmetic or transcription errors. Still it has the virtues of trying to be fair, of exposing its calculations for everyone to see, and of documenting almost all its sources; so no matter what its mistakes it beats the pants off the hidden analyses done with Microsoft's money.
Once the arithmetic errors in the Cybersource analysis are corrected, the all Linux solution looks even better: their 3 year cost savings increase from the reported $354,622.05 to $392,642.69. This includes an offsetting $120,000.00 advantage which they casually gives away to Windows in "operating costs" for training and consultants, which I'll ignore here, and taken up later under soft costs. This makes the hard savings $512,642.69 ($370,130.39 workstations and $142,512.30 servers). I think some other corrections need to be made to their analysis, where they don't seem defensible. A number of these are discussed below. This includes things like assuming that a company would purchase Office at shrinkwrap list instead of (at least) taking advantage of the OEM price; an error in the calculation of how many CALs are needed, assuming the 250 seat company needs Enterprise rather than Standard Edition Exchange, and similar things. These don't change the big picture too much. My calculation of defensible 3 years savings is $461,137.29 ($299,455.39 workstation, $161,681.90 server).
Cybersource's $370,130.39 three years savings for workstations consists of four parts. The smallest pieces are anti-viral software ($9,475), and client acccess licenses (CALs) for Windows 2003 server and Exchange ($18,425). The former is a true cost savings from the switch, and we count that. The latter is real (although calculated wrong, it should be $25,938.50), and needs to be moved from a workstation cost to a server cost. If you switch the servers to Linux, you don't have to pay for CALs (even if you continue to use Windows on the desktop). If you leave the servers on Windows, then you must pay for CALs for all desktop users, whatever their operating system.
The biggest piece is savings from avoiding costs of Windows applications. Cybersource's figure is $202,447.89, and my "defensible" figure is $184,947.89. This includes license fees plus software assurance for 3 years for 250 seats of Office and graphics tools & developer tools for those engaged in that work. This is a very real, and very important savings for business. But operating system migration is not necessary to obtain this. Nearly all1 these savings can be obtained (at much lower risk) by simply replacing Office, Visual Studio and Photoshop with open source counterparts (e.g. OpenOffice, Eclipse and the GIMP) which are all capable of running on Windows.
The final, and second largest piece of workstation savings is based on savings of $559.13 per workstation from licenses and software assurance fees for Windows XP Professional. Cybersource calculates savings of $139,782.50, but I think only $105,032.50 is defensible. The difference is in how much to ascribe to savings for the Windows XP license. I wrote an article last week making the point that it isn't realistic to claim saving of $299 for avoiding a Windows license. Even for single computers the maximum that a consumer would pay for an OEM license with a white box computer is $160, and much less than that from the first tier vendors. But that analysis focused only on the OEM license, not on the additional volume licensing agreements that a company requiring 250 seats would need to enter into. Still, it isn't accurate to use the $299 shrink wrap price. But how much is fair for the analysis?
You can't talk about licensing for a corporate setting without also talking about Software Assurance. Because of the structure of the Microsoft licensing agreements, even if you think, as I do, that Software Assurance agreements aren't worth the price, the licensing deals are structured so that many companies feel they are forced into the higher end agreements in order to obtain the more advantageous licensing agreements on the needed licenses. Pay for software assurance, or pay more for the licenses.
The price of Software Assurance for Windows XP is 29% of the full license, or $21,677.50 per year for the 250 computers. The price of the license under volume licensing agreements varies under a complicated point system, but for the purposes of this analysis, let's use the larger figure mentioned before of $160 per workstation. The total is 75% of full shrink wrap price over three years, and is probably high, but is more defensible than saying 100%. With these changes, the maximum license and SA savings attributable to avoiding the Windows XP licensing is $105,032.50 over three years.
So what is the bottom line? After the corrections described, the total savings in the 250 seat scenario are $461,137.29. This consists of $161,681.90 (35%) for the server switch (including the CALs), $184,947.89 (40%) from switching applications on the workstation, and $114,507.50 (25%) from switching the os (XP + anti-virus).
Our objective was to figure out what the incremental savings were from doing the last piece, switching the operating system, if a company were already resolved to do the other parts. This is the "hard costs" answer to that. This isn't the full story though. We have to answer the question whether there are other costs, besides these hard costs which should be counted, and we have to explore what the benefits will be from the switch. These cloud the issue and will be addressed in Parts III & IV.
1: $598 for Acrobat might still be required.
Corporate Desktop Linux - The Hard Truth is a four part essay: [Part I | Part II | Part III | Part IV]
|
|
|
|
Re: Part II: Corporate Desktop Linux - The Hard Truth
(Score: 3, Informative)
by Anonymous on Feb 11, 2005 - 08:13 PM
|
The other cost of Windows. In passing, you mention "+ anti-virus". I work in IT and fully 25% of all the time we spend on Windows is maintenance is patch after patch after patch after re-install because a virus got in, to restoring of mail systems when joe blow didn't think that playing online poker at home with the laptop could transfer the virus, securely I might add, over the VPN connection. Several techs are on the move 100% of the time, from desktop to desktop fixing Windows. It has gotten so bad that everyone in the company had to take a mandatory 1 day course on "security" learing such things as "Yes, email can spread a virus" and "virus checkers must be kept up to date". We have over 1K people. 1000 person-day salaries, added to TCO that is windows. it keeps us busy. If you add in the lost productivity while peoples computers are down, it adds up. The UNIX side of our shop (we are mixed Windows managers, UNIX grunts) which is 4 times as large as all windows machines, 1/3 the maintenance staff.
I look forward to reading the "soft" costs analysis coming up, because, from personal experience, UNIX/Linux maintenance costs are between 1/4 to 1/10 (of course anecdotally, I only work at one company) per machine.
Steve
|
Re: Part II: Corporate Desktop Linux - The Hard Truth
(Score: 0)
by Anonymous on Feb 12, 2005 - 12:15 AM
|
Doesn't every copy of Windows (the professional versions at least) also include a single free CAL in the price?
|
Re: Part II: Corporate Desktop Linux - The Hard Truth
(Score: 2, Informative)
by Anonymous on Feb 12, 2005 - 01:20 AM
|
I think the thin client central server architecture is the big winner for Linux in terms of cost, but also the biggest potential for mindshift in the company. Linux and X were designed as multi user systems from the ground up. It's made for this kind of thing. The kind of resource sharing we've taken for granted in Linux is only just starting to be developed in the Windows world.
So many people say "We can't go Linux - how to we solve all these problems we've had to solve in Windows? I can't see the push installers, the remote desktop management, the inventory tracking. How do we stop people accessing USB pendrives in Linux? How do we ensure that user data is backed up?" All these questions go away when you shift away from the "Personally Yours" model of Windows and move to central server with thin or netboot clients.
One of the biggest fears with thin client is what happens if the central server fails. How many people lose work when the central Windows file server or domain server or database server fails? The implied feeling that a fat client network is any more immune to this is false. Run your terminal servers in a cluster for extra fault tolerance. Look after them well. Get a good storage solution for the home directories. Be happy that you have fewer machines to look after than if you were caring for each client desktop - and thanks to time sharing you need a lot less processing power in the company as a whole than you needed before.
I've worked in a thin client environment. I've seen a big customer use a netboot environment with fat clients cacheing data on their local drives, but otherwise running everything off the network. Want to upgrade the application? Just install it centrally. The client caches will update on next access. I've seen these system work really well with far less admin hassle. I've also enjoyed features such as true roaming - great across a multiple site or multiple building companyinstitution where you can access your desktop or data or applications from anywhere! Machine packs in - just swap in a new one. Much less hassle.
|
Re: Part II: Corporate Desktop Linux - Migration?
(Score: 2, Informative)
by Anonymous on Feb 12, 2005 - 06:51 AM
|
The article is based on the scenario of a "pure Windows" company migrating to Linux, and this in the context of hardware replacement, which may be a frequent scenario, but by no means the only one to be considered in the Linux vs. Win equation. I was myself faced with other three evaluation:
- the establishment of a new IT system from scratch;
- the decision whether to go through a pure-software upgrade from Win 9x/ME to XP or from the former to Linux
- the decision whether to go through an hw-sw upgrade from OS/2 to new XP PCs or to Linux PCs.
I suspect that in all those cases the edge of Linux is decidedly more dramatic, to the point of being almost a no-brainer.
This is way medium-to-largish US IT budgets will be probably the last, if ever, to switch, unless they are faced with some substantial framework restructuring
Stefano Sutti
Studio Legale Sutti
|
Re: Part II: Corporate Desktop Linux - The Hard Truth
(Score: 1, Informative)
by Anonymous on Feb 12, 2005 - 11:59 AM
|
One more "cost savings": Upgrading doesn't require changing hardware. Trying to run WinXP on a Pentium 1 or 2 is absurd, but take that same machine with 128M or RAM, a 4G HD and a 16MB graphics card, and it will run Linux, OpenOffice, Firefox, etc just fine. A perfectly good office workstation, an excellent thin-client, and hardware so cheap people are giving them away.
|
Re: Part II: Corporate Desktop Linux - The Hard Truth
(Score: 0)
by Anonymous on Feb 14, 2005 - 01:04 AM
|
Every 3-year TCO study misses out one of the greatest benefits of FOSS.
The ongoing licence and software retirement issue. I would love to see this article cover the next 3 years, where the MS route has retiered one or more of its OS/apps and the replacement requires beefier PCs. If you want MS support you can't just keep the software you already use. With Linux you have the choice, after all you're paying for the support not the software.
If the initial 3 years is even (or possibly favours MS if you already have MS trained staff who have never seen anything else) I think the you'd find that from then on FOSS wins by a much bigger margin.
The bean-conuters usually want to write-off investments over 3 years but make them last 5, so they should look at the bigger picture in the first place.
|
Re: Part II: Corporate Desktop Linux - The Hard Truth
(Score: 0)
by Anonymous on Feb 14, 2005 - 07:45 AM
|
Another variable in the equation that didn't seem to get any consideration is the EFFECTS of an OEM license versus an off-the-self license. If I purchase a computer with an OEM copy of Windows, I am legally obligated to use that copy of Windows ONLY on that hardware--it is tied to the hardware. In fact, the product key sticker is intentionally made to be destroyed if I try to take if off the box.
If I wanted to wipe Windows off this box after receiving it from the OEM, I am currently in the free to do that; however, I can NOT currently install this Windows on another computer if I honor the legal agreement that an OEM license carries.
Thus, the OEM software might be good for only the life of that computer and only for that machine. How does this figure into the cost equations? In reality, the software's usable life is dictated by the lowest common denominator--either the machine fails first or the software becomes unsupported. This may be every two or three years considering the versions of Windows (95, 98, 2000, ME, XP). This idea in not tied to only the operating system. Consider an OEM MS Office as another example.
Put another way, do I really own the software when I buy the software under an OEM license? Maybe only for the duration of the lowest common denominator.
|
Re: Part II: Corporate Desktop Linux - The Hard Truth
(Score: 0)
by Anonymous on Feb 15, 2005 - 05:15 PM
|
|
I have to say I'm not impressed by this analysis or better, I'm negatively impressed. I assume that math is correct so I'm not entering into that but when dealing with software I'm sorry to notice that only price has been considered while <U>quality</U> of software has been ignored. Expecially when considering costs of dealing with software-specific functions which would need to be ported / converted or dropped.
A few examples:
somewhere I read that you can replace Photoshop with TheGimp. Sure, but you forgot to mention that TheGimp doesn't deliver the same quality of Photoshop, which is an industry giant in its field. Sure you can switch to TheGimp but any decent (pro) graphic / designer will tell you that TheGimp cannot do what PS does... not even near. So if you just need to resize a few JPEGs, that could fine but you wouldn't need Photoshop as well. If you need Photoshop (for real), you won't be willing to switch to TheGimp;
another simplistic remark is about switching from Office to OpenOffice. Sure you could do that, but what if you have your 3-4-5 years old scripts? What about dozens, tens or hundreds scripts which allow you to exchange data among Word, Excel and Access, print graphs, do whatever you need and that you needed YEARS to develop the way they are and the way you actually need? Sure, you could switch to OpenOffice (which, for the records, has no Access counterparts...) but then you should convert / port or drop your application-specific settings. Switching to OpenOffice could be fine if you're starting now, or if you don't use such features. But if you just need a Word-like editor to type some files, then you don't need Office as well. What about AbiWord?
finally, here comes Visual Studio, which could be replaced by Eclipse. Uh? Really? Do you mean switching language and compilers too? Do you mean dropping your old applications and building new from scratch? I can't see how VS and Eclipse actually relate, given that they were born to conceptually do same thing.
Many people ignore such arguments. A well-done comparison should instead also include such things and, most of all, compare if you will be able to find in a Linux system same features you find in a Windows one. It's not merely adding 1 to 1.
After all, that's MS is stating too: sure you can switch, but will new system be as good as your old one is? Please notice that I'm not against Linux and I think that is a good platform. I'm just saying that comparing costs is not like 1, 2, 3 as many Linux fans like to state.
Regards.
The Bitland Prince
|
Re: Part II: Corporate Desktop Linux - The Hard Truth
(Score: 0)
by Anonymous on Feb 16, 2005 - 03:57 AM
|
The Bitland Prince makes a great point, but does not go far enough. I do kernel work in both Windows and Linux so I am well aware of the technical superiority of Linux over Windows. This is great for the Hackers and the like. Unfortuately I.T. Managers have more to concider. Like the whole reason for having I.T. in the company is to lower the cost of doing business AND to enable the company to capture more business from its competitors. Even if you half the TCO by migrating to Linux this does a company no good if doing this breaks the business processes it needs to function, and most of the time such a migration will. This can mean opportunity costs far in excess of what the company saved on TCO of it's computers. Microsoft are very good at writing there software so that it becomes part of the company that uses it so that it is very costly to get rid of.
A perfect example was given in the comparision between TheGimp and Photoshop (althought I am a paintshop pro man myself). No point in a product being free if it does not help you make money, which is what businesses do.
All most business do is buy/sell stuff, maybe add some value. They tend to have the attitude if it aint broke, don't fix it. And since they are happy making money they would concider Windows/Office to be not broke. It does what they want and they are not about to put $millions of business are risk just to save $thousands on IT. These are the real reasons most companies dont migrate, and they are not technical but business reasons.
Now if you were starting out from scratch you would be crazy to buy into Microsoft cancerware, but that is another story........
|
Re: Part II: Corporate Desktop Linux - The Hard Truth
(Score: 0)
by Anonymous on Feb 16, 2005 - 02:39 PM
|
I hope in part three you explore some real world big business scenarios where despite having all the patches and anti virus solutions they still got massively hosed with some virus or trojan. It isn't carved in stone it will happen all the time in a windows environment, but who wants to really bet against it happening? that's a wild card variable that is almost imp[ossible to compute, but, it can be looked at in hindsight at various corporations. The only way to insure that won't happen is to not have windows there in the first place. The bug world is 99% windows more or less, seems a prudent step to take nowadays. And the excuse many desktop users have is "I need windows for my games!", shouldn't fly in the corporate world. That leaves inertia, and psychological denial as the primary reasons to not switch in todays computing reality. Now that could well swing back sometime in the future,who knows, linux might turn out to be a horrid design and be even more insecure,or Mac, or the BSDs, etc, but today, nope, reality is quite clear that windows is way too insecure to trust your livelihood and your customers private data and etc to their new improved promises which are no different from their past promises and they a long track record of being this way despite billions of dollars of patches thrown at it and an entire billions of dollars security industry grown up around it. It's still broken.It is broken, busted, malfunctional, not designed for networking on the internet, it can't be trusted any longer. Time to admit reality and move on. You wouldn't keep buying yugos for the corporate fleet if they kept breaking down, and especially if you had been buying into every new model change for the past decade and about zip hasd really been fixed, just some bolted on wings and neon fender lights. Nope, that doesn't make a reliable car.. Nope, you'd switch brands at a bare minimum. any corporate fleet manager who wouldn't would get fired, and probably investigated for bribe taking if they kept recommending and buying the busted yugos because it would be so obvious a bad decision.
A machine is a machine, and a manufacturer is a manufacturer, they are either reliable or not, end of story.
|
Re: Part II: Corporate Desktop Linux - The Hard Truth
(Score: 0)
by Anonymous on Feb 16, 2005 - 03:43 PM
|
|
Keep in mind that most larger corporations will not switch to an unsupported desktop distro - they will go with RedHat Advanced Workstation or something like that. It would be useful to factor the price for AW licenses into this comparison.
|
Re: Part II: Corporate Desktop Linux - The Hard Truth
(Score: 0)
by Anonymous on Mar 03, 2005 - 02:56 PM
|
"In large part this whole series is about pressing for the winnable victories first, rather than the more radical changes. Since thin-client looks like a more radical change to the corporate world, I'm going to stick with analyzing the less radical move, acknowledging that the other may be a big win if it can be sold"
Then:
"Why not have a Linux thin client server to run a web browser ( firefox )and a email client ( evolution or thunderbird )applications. And have all output from these applications displayed back on the Windows Desktop PCs ( in a manner like Windows terminal services or Linux thin clients ).
In this way, you can still have all your Windows applications and familiar Desktop environment, but have a measure of "insulation" against new viruses and Trojans "
THis change is easily done and not as radical as moving an entire enviroment to a Linux Desktop or thin client model. In this way you ( the system admin )centrally managed or administer one the of the application environments that are most pressing.
|
|
|
| 