Here's some really BS from another M$ lackey.
It would seem Mr. Ng here never even bothered to question the financial analysis of his "client", and instead used what were probably major errors to push for M$. He also completely misunderstands the GPL when he thinks open source software mauy not remain free. He seems to think it refers only to license costs. He also conveniently omits the fact that Fedora and the RHEL "clones" (WBEL and CentOS) are free.
God bless! ----------
Ng: Mulling migration to open source By Wilson Ng Wired Desktop http://www.sunstar.com.ph/static/ceb/2005/04/14/bus/ng.mulling.migration.to.open.source.html
SAVING ON LICENSES. I was talking to a top executive of an international computer services company. They now use a lot of Microsoft products, but he said they are considering some open source products to save on licenses. The following are some of the things we talked about.
But first, I must tell the readers two things. First, I have been using Microsoft products for the last 23 years, and our company has been a Microsoft partner for the last 10. I am also a designated Microsoft Most Valuable Professional, whose job is to educate people on the uses of computers, again, specifically, for Microsoft.
Second, I idolize Bill Gates. I particularly like the fact that he helped shape the technology revolution as well as donated over $30 billion to charitable causes.
This executive I was talking to said he likes Microsoft products, and the decision would purely be a financial decision.
He also told me that if they wanted to migrate from Microsoft to open source, it would mean reinvestments in hardware, rewriting some computer software programs, massive reorientation and migration of data, as well as retraining of their people. They also expect some confusion, downtime and possible loss of data or productivity. They also took into consideration the employee man-hours needed to rewrite and deploy programs and other changes.
Taking these into consideration, they came up with a financial model showing that they would end up losing money in the first three years, break even at around the fourth year, make money (actually save money on software licenses) starting on the fifth year, and recoup the losses of the first three to four years by the seventh year.
I started to kid him that you dont invest in something, especially information technology (IT), that will give returns only after eight years, especially if your current system seems to be running fine.
It is not as if you dont have a choice, I told him. After all, when
you change your technology infrastructure, it is extremely risky and also entails a lot of work with precious IT people that could have been used to do something else.
Moreover, in eight years, the technology landscape will have changed massively. I asked him how he did his computations. After five or six years, were they expecting the current open source software to still be free? And were they expecting Microsoft to charge the same prices as before?
He admitted those were the assumptions, so I warned him that these might be too optimistic. Every enterprise is obligated to maximize shareholder return, so companies cannot be always giving things away for free.
Listing in Ebay was almost free before. When they got a good market share, they started to charge. Texting using cell phones was free before. Now telcos are charging.
Red Hat Linux is hardly free nowadays. It is listed in the stock exchange and valued at over $2 billion.
With sales of only over $100 million and net income of slightly over $10 million, why would a company be valued over $2 billion? Obviously, the market expects them to enjoy a ten- to twentyfold increase in revenues in the next few years. To gain that kind of revenue, you have to gain both market share AND better prices. As a result, there is scarcely anything now from Red Hat that is considered cheap.
There will be two scenarios that can happen after five years.
The first is that Microsoft keeps its market share and remains expensive, and open source will continue to have a small market share and be free. Then it may be worthwhile for a service firm to pay extra to work with a technology which 90 percent of its customers also use.
This makes everything easierless training, easier interchange of files, easier time getting the business etc.
The second scenario is that Microsoft will have lower market share and open source will have higher market share. When that happens, you cannot expect open source firms not to start charging. In both cases, I told him, the financial model may not hold.
Over the last six months, almost a million people got a Sun Cellular phone because they could make unlimited calls for P250. They justified the cost of another cell phone with the savings they would get. They assumed that Sun would continue at P250 per month and the other providers would continue the same pricing.
But as Sun gained market share, it increased its price to P350, while we now have responses from both Globe and Smart.
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