Trying to make a living out of open-source software

Three years ago, a flurry of articles came out weighing up whether open-source operating system Linux could survive its growing popularity.

Linux was already being taken as a serious threat to Windows by Microsoft, and computing giants such as IBM, Oracle, SAP, Dell, Compaq, Computer Associates and others were getting on the Linux bandwagon.

But how could software created under the open-source moniker - meaning, among other things, that all code for the software must be freely available to anybody, and the software itself is often free, as well - succeed commercially?

Linux has not only survived but has continuously proven to be what many firms want - stable, flexible and highly secure.

It's also become the anchor tenant of the whole open-source movement, giving context and visibility to other software developed under its communal philosophy, such as the server application Apache, and the office productivity suites OpenOffice and StarOffice.

But the question of commercial viability remains. Yes, people want the software and, yes, the people who develop it are committed to and passionate about open source. But passion doesn't necessarily put bread on the table, much less positive cash-flow to the bottom line. What demonstrably does generate revenue, though, whether in the proprietary or the open-source area, is services - putting together hardware and software products for customers, installing the systems and maintaining them.

And that, hopes a new Dublin open-source services company called OpenApp, is where success lies both for open-source products and the people who develop and promote them.

"We felt for a long time that there was an opportunity. This stuff really makes sense. But we have to make a living in this space," says OpenApp managing director Mr Mel McIntyre.

The company has stepped cautiously into the Irish market, hoping to convince the corporate and public sectors that open source should "at least be on your agenda", says Mr McIntyre.

The public sector is particularly tricky. While the Government puts huge information technology contracts out to tender, open-source products are often free or very low cost, don't come in shrink-wrapped packages from a central vendor, and aren't backed by the massive sales and marketing departments of companies such as Microsoft.

OpenApp's commercial director, Mr Tom O'Shea, says it's hard for a small services provider to go after such contracts because they require research and analysis on a scale that can be difficult for a small player.

On the other hand, with so many of the big companies coming to market with Linux products, OpenApp sees the possibility of partnerships.

Tightening IT budgets also adds to the attraction of going with open source: there's a lower initial cost and a low maintenance cost for software that doesn't charge on a per-user basis or need regular costly upgrades. And behind them, they have the push of support from the European Union, which has begun to officially back open-source initiatives.

Indeed, open source has made some serious inroads into the European market, according to an EU study produced by Mr Rishab Aiyer Ghosh.

In a survey across sectors and EU countries a year ago, he found 27 per cent of EU companies either use open-source software or plan to use it. In the public sector, 22 per cent of organisations use it. Highest penetration was in Germany, with 43.7 per cent of companies saying they are users.

"Interestingly, respondents said stability, better performance and higher security were always more important to them than lower user fees", he said, speaking at a recent day-long seminar run by OpenApp.

Both Germany and France are particularly supportive of open-source initiatives at the official government level, noted another speaker, self-described open-source "evangelist" and research engineer Mr Olivier Berger.

What about organisations that have made the leap? Mr Tony Kenny, IT project manager at Beaumont Hospital, is very happy with the cost savings and flexibility of open-source software, although he notes that some desktop users found the migration difficult and have stuck with their Microsoft applications.

"We have not got into this out of some doctrinaire or philosophical approach. We got into this because our budgets are shrinking. Funding is extremely tight," he stressed.

His figures for the project are striking. He figures his e-mail solution cost €1,000, compared to a €110,000 commercial solution, while office software cost €27,500 rather than €120,000.

"What we're doing in the Irish market is raising awareness, with a view to, further down the line, providing ongoing support," says OpenApp's Mr O'Shea.

"There's an appetite there that hasn't been fed," adds Mr McIntyre.

Will open source keep them well-fed, though? "We'll tell you in three months," says Mr O'Shea.