Navigating the Economic Downturn:Strategies for Cutting Costs with Open SourceWebinar on Oct 29, 2008

Presented by Kim Weins and Rod Cope of OpenLogicRecording available at: www.openlogic.com/downloads/webinars.php

OpenLogic Company Confidential

Agenda

How Open Source Can Help You Cut CostsCalculating Open Source SavingsOpen Source Migration Opportunities

OpenLogic Company Confidential 3OpenLogic Company Confidential

About OpenLogic

OpenLogic enables enterprises to safely and securely

acquire, manage and control open source software,

and thereby realize significantly higher savings.

OpenLogic Company Confidential

Aggregating Open Source for the Enterprise

One throat to chokeConsolidated SLA supportSupport

Provisioning

GovernanceRisk reduction

IndemnificationSaaS Governance platform

Trusted sourceCertified library of 460+ projectsManaged updates

OpenLogic Company Confidential

Polling Results from Webinar Attendees

Are you seeing pressure on your IT budgets from the economic downturn?

0 20 40 60 80 100

Don't know

No, and don't expectwe will

Not yet, but Ianticipate we will

Yes

OpenLogic Company Confidential

What the State of the Economy Means to IT

61% of CIOs are currently re-evaluating their 2009 budgets 59% percent are trying to save money by renegotiating contracts with their vendors 59% are putting all nonessential projects on hold 49% are cutting the amount they spend on consultants and have restricted travel 25% are freezing IT hiring

Source: CIO Executive Board Survey, Sept 2008

OpenLogic Company Confidential

What the State of the Economy Means to IT

"The next big thing in IT is not a technology—it is cost reduction, risk management and compliance,"

Peter Sondergaard, SVP Research, Gartner.

OpenLogic Company Confidential

Polling Results from Webinar Attendees

Will your company use more open source because of economic uncertainty?

0 20 40 60 80 100

Economy isn't aconsideration

We are unlikley to

We are considering it

We plan toWill your company use more open source because of economic uncertainty?

OpenLogic Company Confidential

How Open Source Can Help You Cut Costs

Cut Licensing Costs Zero (or near zero)

Reduce Support & Maintenance Costs A competitive market means support for open source typically costs less than support for proprietary products;

Reduce Development CostsAvoid reinventing the wheel; leverage the community

OpenLogic Company Confidential

How OpenLogic Can Help You Cut Costs

Commercial OSS Support at Low CostSignificantly lower cost than proprietary alternativesAggregate open source support for cost savings

Low Cost Services to Accelerate Use of Open Source

1 to 5 day engagements for Policy Creation, OSS Selection, Training, Migration and Tuning

Mitigate Concerns that Limit the Use of OSSCommercial support for almost 500 open source projectsIndemnification Governance solutions

OpenLogic Company Confidential

Polling Results from Webinar Attendees

Have you recently replaced any commercial proprietary software with open source because of economic uncertainty?

0 20 40 60 80 100

No

In progress

Yes

OpenLogic Company Confidential

Case Study: Cost Savings with OSS

Proprietary AlternativeProprietary Alternative

License cost of $1.7M per year to License cost of $1.7M per year to startstart

Expected cost to rise to $10M per Expected cost to rise to $10M per yearyear

OSS AlternativeOSS Alternative

Free to startFree to start

Able to prototype solution in a matter Able to prototype solution in a matter of daysof days

Costs for subscription and support Costs for subscription and support <10% of proprietary alternative<10% of proprietary alternative

OpenLogic Company Confidential

Case Study: Cost Savings with OpenLogic

Existing OSS VendorExisting OSS Vendor

Support costs of $300K+ /year for Support costs of $300K+ /year for one open source productone open source product

Less than 5 support tickets per yearLess than 5 support tickets per year

OpenLogic AlternativeOpenLogic Alternative

Significantly reduce costsSignificantly reduce costs

Aggregate support for hundreds of Aggregate support for hundreds of open source projectsopen source projects

Enable development teams to use Enable development teams to use more open sourcemore open source

How to Calculate Open Source Savings

OpenLogic Company Confidential

Polling Results from Webinar Attendees

Do you think replacing commercial proprietary systems with open source could save your company money?

0 20 40 60 80 100

No, we won't use more open source

No, we use open source for other reasons

Maybe

Yes, we anticpate saving money

Yes, we've already saved money

OpenLogic Company Confidential

Increase Cost Savings with OpenLogic

OpenLogic Company Confidential

Cost Considerations for Open Source

Costs to find, evaluate and certify open source.Tip: Create a central repository of certified open source

Sourcing

Costs to support open sourceTip: Shop around, open source support is a competitive market

Support

Zero cost (typically)Tip: There are some commercial OSS companies that do charge a license fee for “enterprise” editions.

Licensing

Costs to manage open source in productionTip: Commercial support contracts can reduce these costs

IT Services

Costs to review open source licenses and requests to use OSSTip: Automate governance processes & maintain an audit trail

Compliance & Legal

Open Source Cost ConsiderationsAreas

Hard C

ostsSoft C

osts

OpenLogic Company Confidential

Example: Hard Cost Savings with Open Source

88%$450,000$3,712,800Hard Cost Total

77%$450,000$1,944,800Support (5 yrs)

100%-$1,768,000Licensing

Commercial Proprietary

Use OSS with OpenLogic

Savings Commercial vs

OLCosts

Assumes:DB, App Server and Web Server (12 CPUs each)SOA Suite (8 CPUs) and BI Suite (4 CPUs)

OpenLogic Company Confidential

Four Actions You Can Take Now

Gartner• Get the best pricing and

terms for your IT purchases• Identify major cost-saving

opportunities • Implement cost-savings

technologies• Implement cost-saving

process improvement

Open Source• Shop for Open Source Support

OpenLogic supports 460+ OSS packages

• Identify Opportunities to use OSS

OSS Opportunities Workshops OSS Selection Workshops

• Implement Open Source where appropriate

Migration Planning• Remove Roadblocks to OSS

Usage OSS Policy WorkshopOSS Governance Solutions

OpenLogic Company Confidential

Polling Results from Webinar Attendees

Other than the operating system, what types of software would you like to replace with open source to lower costs?

0 20 40 60 80 100

Other business appsERP

CRMContent management

Development toolsOther middleware

Business intelligenceSOA

App or web serversDatabases

Open Source Migration Opportunities

OpenLogic Company Confidential

Questions about moving to Open Source

What are the differences between proprietary and open source from an implementation point of view?How do I know if my particular situation is compatible with the change?Which types of applications should I migrate first and why?

OpenLogic Company Confidential

Proprietary vs. Open Source: Implementation

ProsEasy to know where to get supportUsually well-integrated with other products from same vendor

ConsSlow to respond to customer requests and adopt new standardsSupport quality sometimes lackingSecurity only tested in-houseProprietary extensions may create lock-in

ProsQuick to respond to popular requests / can modify yourselfFlexible, focus on industry standardsSecurity tested publicly

ConsHard to find support on hundreds of packages *Effort required to monitor package updates & security vulnerabilities *Documentation may be more limited

Proprietary Open Source

* Provided by OpenLogic

OpenLogic Company Confidential

Quick Hits for Open Source Migration

Migration opportunitiesExpensive proprietary licensing and maintenance costsStandards-based technologiesDepartmental or non-mission-critical deployments

Green field opportunitiesOpen to solutions beyond incumbent vendorsIntegration with legacy systems is initially minimal

OpenLogic Company Confidential

Proprietary vs. Open Source: 4 Key Categories

WebSphereWebLogic

OracleDB2Sybase

WebSphere ESBTIBCOSonicFioranoiWay

Business Objects/CrystalActuateIBM/Cognos

Application Server Database

SOA/ESB BI/Reporting

JBossTomcatGlassfishGeronimo

MySQLPostgreSQLHSQLDB

ServiceMixJBoss ESBCXFActiveMQMule

Jasper ReportsPentahoMondrianWeka

OpenLogic Company Confidential

Application Server

WebSphere, WebLogicCommercial

Start with departmental apps, minimal integration with proprietary systems

Quick Hits

JBoss, Tomcat, Glassfish, GeronimoOpen Source Alternatives

Medium, depends on features usedEase of Migration

Java Enterprise Edition (JEE)Standards

OpenLogic Company Confidential

Database

Oracle, DB2, SybaseCommercial

Evaluate on case-by-case basis, starting with simple applications

Quick Hits

MySQL, PostgreSQL, HSQLDBOpen Source Alternatives

Easy to Difficult, depending on usage ORM makes it easier (e.g., Hibernate) Database-specific extension usage makes it harder

(e.g., stored procedures, warehousing extensions)

Ease of Migration

SQLStandards

OpenLogic Company Confidential

SOA and ESB

WebSphere ESB, TIBCO, Sonic, FioranoCommercial

Possible to integrate local SOA/ESB tools with central ESB; New projects

Quick Hits

ServiceMix, JBoss ESB, CXF, ActiveMQ, Mule

Open Source Alternatives

Medium, depends on use of proprietary extensions, routing, plug-ins, etc.

Ease of Migration

JMS, SOAP, SMTP, FTP, HTTP, BPEL, many others

Standards

OpenLogic Company Confidential

Business Intelligence and Reporting

Business Objects/Crystal, IBM/Cognos, Actuate

Commercial

Start with open source reporting for department or division

Quick Hits

Jasper Reports, Pentaho, Mondrian, WekaOpen Source Alternatives

Difficult if reports must be rewrittenEase of Migration

SQL, no standard for report designStandards

OpenLogic Company Confidential

Conclusion

Start with low-hanging fruitNon-mission-criticalDepartmental appsPrimarily using standard features, not vendor-specific add-onsNo need for deep integration with legacy systems

Gain experience with OSS tools, support vendorsTrusted partners experienced with OSS can ease the transition

Expand on your successEstablish a beachhead, demonstrate savings, grow from thereDon't try to boil the ocean

OpenLogic Company Confidential

Contact Information

Contact OpenLogic:

www.openlogic.com

Get recording of webinar:

www.openlogic.com/downloads/webinars.php

Get a quote on support: www.openlogic.com/products/support.php

Get a quote on governance solutions: www.openlogic.com/solutions/governance.php

Get a quote on professional services: www.openlogic.com/products/professional-services.php