SMEs and open source - a perfect marriage?

Small businesses can benefit from switching to open source, says Danny Bradbury - just be careful which applications you choose to move.

Vendors of proprietary software such as Microsoft are busy courting small and medium-sized enterprise (SME) customers with their products. Windows Small Business Server, for example, is designed to chunter happily away in a corner, managing the everyday computing tasks for a smaller company. But open source software companies are also targeting SMEs, offering lower cost, increased flexibility and security as key benefits. Which approach should SMEs take?

The ability to tinker with the source code in an open source application means companies can adapt it to suit their own ends and draw on input from a wide community of developers to help them.

Nik Ehmann, ISP team leader at Newtel Solutions, a Channel Islands telephone service provider with 35 employees, says: "The availability of programming languages such as Perl and PHP which are accompanied by vast libraries of contributed code has enabled us to create both ad hoc and full blown solutions in support of our infrastructure."

Newtel began purchasing Red Hat Linux Enterprise Server edition from Red Hat partner Abtech Computer Services in 2004 with 29 Red Hat Enterprise Server licences.

But unlike ISPs, most small businesses will not want to get involved with software development. Instead, the biggest benefit for them is open source's low cost. Depending on a company's level of in-house expertise, the cost of implementing open source can range from little more than the cost of the in-house staff and hardware, up to a ceiling that is considerably lower than the equivalent proprietary product.

Because open source software is generally free, companies pay only for a mixture of physical distribution and technical support but for simple open source installations it can be just as easy to download the software and install it yourself.

Taking the open source route can also reduce future costs, contends Mark Taylor, CEO of open source consultancy Sirius Corporation. "You have to think about future upgradeability and avoiding lock-in," he says. Not having to worry about software licence fees and proprietary protocols makes you less vulnerable to changes in vendor strategy.

SMEs using open source can save money on more than just licence fees. Fewer worms and viruses exist for open source products such as Linux, reducing the risk of infection and the associated costs.

Nigel Fortlage, vice president of IT at Winnipeg-based brokering company GHY International, has been using open source software for nine years within the hundred-strong company and installed Linux on older hardware to make networking more secure. "That has saved us $66,000 per year in telecommunications costs," he says.

But on the downside, it can be more difficult to configure open source systems. Graham Oakes, an independent open source consultant, says: "Microsoft has been very good at usability and ease of installation. That made it a lot easier for people from a non-IT background to get enough skills to run their own infrastructure. You probably need a little more skill to set up a stack from scratch in open source."

SMEs often depend on one or two individuals with previous experience of open source software, explains Nikos Drakos, research director at Gartner. "That is risky because it depends on the individuals staying with the company," he says. "So SMEs have tended to rely on third parties to avoid having to deal with open source directly."

Even so, open source has become increasingly attractive for SMEs at the infrastructure level - the commodity part of the computing environment that end users rely on but don't see. Infrastructure components such as operating systems, databases, email and directory services use data formats so standardised that it is fairly easy to move data between products.

With products such as the Samba file system integrator now bundled into many Linux distributions, it is much easier to integrate Windows clients with a Linux server, further reducing the barrier to deployment.

Other infrastructure applications are now available in open source too. Sirius's Taylor uses the Asterisk open source voice over IP system, for example, essentially replacing a SME's telephone PBX with free software running on commodity hardware.

But while infrastructure applications are more interchangeable, it can be harder to shift data from older, proprietary line-of-business applications such as accounting and customer relationship management into newer, open source versions. Oakes warns that shifting an accounting department over to an open source package may require so much extra data migration and training that it would negate the cost savings on the software licence.

Small businesses migrating line-of-business applications to open source may not want to do them all at once anyway, and there will be legacy applications that need to be integrated with new open source software.

Sirius's Taylor says: "The legacy applications that you can't move to Linux yet, you simply run in a virtualised environment."

Software such as VMWare (or open source equivalents such as Xen, if you have compatible hardware) let administrators run a virtual Windows server as simply another software application on top of a Linux box. This 'server within a server' scenario lets SMEs maintain their legacy infrastructure while moving ahead with an open source deployment, he explains.

But a SME taking this approach will probably need a consultant's software expertise to get the applications' different data formats talking to each other, which represents another hidden cost.

The most important thing when considering any open source application is to do your background research, says Newtel's Ehmann. "Find out as much about the particular application as possible - join any mailing list or newsgroup to get a general feel as to how things are going," he advises.

This will tell the SME how active the development is, how many problems are being raised and whether they will be relevant to its own set-up, along with how responsive to problems and enhancement requests the developers are.

SMEs will often find open source to be a cheap way to build a basic computing infrastructure, and paying for support and update services on a regular basis in a software as service model will help to regulate capital expenditure.

But when it comes to user-facing line of business applications, the criteria for evaluation will become more complex, and open source won't be a panacea for all growing companies. Companies evaluating those applications will need to consider their existing application base and the complexity of their data before taking the plunge. Still, the more open source you manage to push into an organisation, the easier your licence management will become.