Is ROI a 'Bogus' Indicator of IT Value?

By Peter Galli  |  Print this article Print


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ROI is not being seen as the best way to measure technology decisions and rethinking IT strategy with open-source software will better support the business, says Stephen Walli, a former Unix expert at Microsoft.

PHOENIX—The focus on return on investment as an indicator of IT value is actually bogus and is increasingly not being seen as the best way to measure technology decisions, Stephen Walli, a former employee of Microsoft and Optaros, said at the Gartner Open Source Summit here September 28.

In an address entitled "Enterprise Open Source: Delivering Value Versus Cutting Costs," Walli said that rethinking IT strategy with open-source software enables the IT organization to get back to supporting the business rather than focusing on simple cost management.

Walli worked at Microsoft for five years, first as its Unix go-to person and then, later, was tasked by Jim Allchin [who is currently co-president of Microsoft's platforms and services division] to examine exactly what open source was and what it meant for their business.

"I was not tasked to try and kick the legs out from open source," he quipped.

While it is often said that open software is free like a puppy, which can be acquired for free but then is an ongoing cost, Walli said that applied to all software, not just open source.

To read more about how companies that use both Linux and Windows are finding that Windows has no cost advantage over Linux, click here.

Good software is also designed by good software developers, regardless of the licensing strategy, he said, adding that FOSS (free and open-source software) projects start when a designer writes software and was willing to share that under a FOSS license.

"FOSS projects are not products; they are interesting buckets of technology. But, yes, some of these projects become products that are packaged, tested, documented, supported and maintained for customers," he said.

Click here to read more about why some analysts say that Microsoft Windows will not suffer irreparable damage on the server side at the hands of the Linux operating system over the next five years.

Companies build products as part of their value proposition to customers, he said, noting that no one is working for free in a real economic sense. But developers and contributors to those open projects get back more than they give, Walli said, pointing out that "if you want influence you have to participate and contribute."

Good FOSS projects are the ultimate reuse strategy, and great engineering practice is to design to the scarcest resource—time, he said, adding that being able to rapidly assemble custom solutions is a real advantage.

The joy of using open-source software is that it's free, as there is no licensing cost, and the code can be changed. This allows amazing prototypes and development to be done at no cost, Walli said.

"But, of course, at some point you are actually going to want to buy some software and open-source software is no different here. But open-source vendors have a profitable business based on different margins. While you may not 'buy' the software, you do buy the product," he said.

The most compelling and competitive aspect of open software is that users could buy competitive support and maintenance with their commercial open source product, he said.

Click here to read more about what the father of Wiki had to say about community and collaborative development.

Turning to the controversial issue of licensing, Walli waded in deeply, saying that there is nothing inherently different about FOSS licensing from other software licensing, as it all depends heavily on copyright laws.

"Dual licensing is an attribute of IP law; you can license your property to as many people as many times as many ways as you choose. Collected works also have licenses, but it's all just software licensing —there is nothing particular—or peculiar—to open source here," Walli said.

Walli ended his session by saying that open source is really all just software, just economics and just business.

"But the open-source collaborative development processes are proving to be the best reuse strategy for customers and vendors alike."

Check out eWEEK.com's for the latest open-source news, reviews and analysis.

Peter Galli has been a financial/technology reporter for 12 years at leading publications in South Africa, the UK and the US. He has been Investment Editor of South Africa's Business Day Newspaper, the sister publication of the Financial Times of London.

He was also Group Financial Communications Manager for First National Bank, the second largest banking group in South Africa before moving on to become Executive News Editor of Business Report, the largest daily financial newspaper in South Africa, owned by the global Independent Newspapers group.

He was responsible for a national reporting team of 20 based in four bureaus. He also edited and contributed to its weekly technology page, and launched a financial and technology radio service supplying daily news bulletins to the national broadcaster, the South African Broadcasting Corporation, which were then distributed to some 50 radio stations across the country.

He was then transferred to San Francisco as Business Report's U.S. Correspondent to cover Silicon Valley, trade and finance between the US, Europe and emerging markets like South Africa. After serving that role for more than two years, he joined eWeek as a Senior Editor, covering software platforms in August 2000.

He has comprehensively covered Microsoft and its Windows and .Net platforms, as well as the many legal challenges it has faced. He has also focused on Sun Microsystems and its Solaris operating environment, Java and Unix offerings. He covers developments in the open source community, particularly around the Linux kernel and the effects it will have on the enterprise.

He has written extensively about new products for the Linux and Unix platforms, the development of open standards and critically looked at the potential Linux has to offer an alternative operating system and platform to Windows, .Net and Unix-based solutions like Solaris.

His interviews with senior industry executives include Microsoft CEO Steve Ballmer, Linus Torvalds, the original developer of the Linux operating system, Sun CEO Scot McNealy, and Bill Zeitler, a senior vice president at IBM.

For numerous examples of his writing you can search under his name at the eWEEK Website at www.eweek.com.


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