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Linux Means Business

  • Jan 31, 2003
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TCO: Totally Confusing Observations

What we are really talking about here is the much-ballyhooed TCO, or Total Cost of Ownership. IANAE (I Am Not An Economist), but I have always found most "studies" of TCO to be in the "statistics" category of Mark Twain's famous hierarchy of untruths: "Lies, damned lies, and statistics." That said, although Free Software obviously wins on price (there is little chance that the purchase price of any closed commercial package will ever approach the zero dollar price of Free Software), license price is clearly not the only component of cost.

Often, it is assumed that employees will come in knowing how to use commercial software, and that substantial retraining will be required for the transition to Free Software. I think this argument is flawed. For many specialized software packages, such as commercial accounting packages, it is difficult to find employees with knowledge of the particular package. Often, even when an employee has knowledge of a package, it may be with a newer or older version, and retraining must still occur. Upgrades to some specialized packages quite frequently require as much administrative and training effort as conversion to an entirely different product.

Even in the case of products so ubiquitous that it is indeed reasonable to assume that virtually all qualified applicants will know the products (MS Office and the Windows Desktop itself leap to mind), the Free Software alternatives require only a few minutes for such people to become functionally productive. Also, the time to reach full proficiency is not much greater than the time required to master a major new version of the closed product.

What I am certain of is that there are many businesses for which time is more available than money (although not necessarily by much). When a business is run with very narrow margins or is in an economic slump, the price of software may be the difference between having a tool that is of use and not having the tool at all. In these cases, Free Software may have distinct advantages.

To demonstrate this, I want to rapidly run through the business areas and introduce you to one or two pieces of Free Software in each area that you might want to take a look at and perhaps evaluate for yourself.

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Last Update: November 17, 2020