The Truth Behind The Windows/Linux Cost Battle

So, yet another survey has attempted to answer the question of whether running a system on Linux or Windows is cheaper.

On the face of it buying Linux software is cheaper because it is open-source and Microsoft has a famously pricey licensing system for its products. However, it is the Total Cost of Ownership (TCO) that is the important factor. How much does it cost all in - maintenance, development, training - to run both systems?

We've had numerous surveys, reports and studies in the past two years that have pointed first way one and then the other. In fact, the only thing the reports have had in common is their shameless bias and careful twisting of scenarios to come out in favour of their preferred operating system.

Among such worthy competition, however, last week's study by Giga Research nevertheless manages to amaze with its sheer bravado. Even considering it was sponsored by Microsoft.

The authors point this out early on and begin their executive summary: "Will Linux inevitably dethrone Windows as the leading operating system? Is Linux the better choice?... Giga Research [examined] the relative benefits... by comparing the cost incurred and benefits achieved by two sets of organisations: those using Linux as the basis for their applications and those using Microsoft Windows." Sadly this is as balanced as it gets.

Its conclusion incidentally - just to get it out the way - was that it is cheaper to develop certain programs in Windows rather than Linux. By up to 28 percent.

Discovering how it got there reveals a litany of bizarre unexplained assumptions and selective blindness. In short, this is an entire study geared to producing a single headline. And it has worked. "Windows cheaper than Linux," says CNet; "Microsoft Has Better TCO Than J2EE/Linux," says InternetNews; "Linux Cheaper Than Windows? Think Again," says E-commerce Times; "Windows can be cheaper to use than Linux," says Reuters - and so on and so forth.

Maybe Windows is cheaper than Linux in certain situations but when the evidence is so flawed, you have to question the entire premise.

The study's "primary conclusion" is that there is a "substantial cost saving" of Windows over JTEE/Linux "as a development platform for the applications considered". What applications in particular? We never find out, only what "business goals" the applications would be used for.

We find out that the survey spoke to seven companies running Windows and five running Linux. The report then "extrapolates from these users' experiences" to come up with a brand-new form of TCO that Giga has called Total Economic Impact (TEI) - a method so rich in its extrapolating potential that the company has even trademarked the name.

Why is TEI so great? Because it covers not only all those things that are "typically accounted for by IT" but also "benefits, risks and flexibility". Yes, TEI "weighs the enabling value of a technology in increasing the effectiveness of overall business processes".

Once you've weighed the enabling value of effectiveness in overall procedures, you come up with some interesting figures. For example, it takes 12 months to complete a project on Linux but only nine months with Microsoft. Why? Who knows? Also you need 10 days of training for people on Linux and just seven for Windows. Why? Dummy - everyone knows that Microsoft-trained staff are more readily available and more productive.

Not only this but for a large organisation Linux may cost half in terms of "computer platform", but it is four times more expensive than Windows in terms of "software platform", four times more expensive for "software maintenance" and a third more expensive in terms of skills training.

For a medium-sized organisation, computing platform is somehow double, the software platform an incredible seven times more expensive, software maintenance two-and-a-half times larger and skills double.

How? Well, first of all, it is assumed that anyone using Linux will automatically go for BEA WebLogic and Oracle's database and cough up the surprisingly high licences for each. Why this would be the case when the companies could use highly-rated open source databases and scripting languages like MySQL and PHP for almost no cost is somewhat of a mystery.

Software maintenance is also calculated in a very strange fashion. It is assumed that each year it will cost 25 percent of the list price for the licences. This assumption more than anything shows how skewed by Microsoft this report has been.

Under Microsoft's new licensing rules there is a compulsory annual maintenance fee for ownership of its software which is calculated at 25 percent of the licence. Microsoft says it helps keep customers up to date. However the report assumes that exactly the same is true for all other companies, when it isn't. And, of course, the licences that the report decided everyone was buying were vastly more expensive than Microsoft's in the first place, so the gap just gets bigger.

The report gives two figures for the cost, over four years, of a system on both Linux and Windows: $2,289,000 compared to $1,643,000. Assume for a second though that a Linux user decides to use other open-source software in conjunction with Linux and you find that figure rapidly drops to below that of the Windows figure. Remove the assumption that it takes a third longer in development or training on Linux and that figure falls even further.

If you then take into account the stated assumption that the new Windows Server 2003 is just as stable as Red Hat 9 (something that seems as likely as an iced tea in hell) and so ignore all the extra associated maintenance costs, then Windows really does start losing the case in this carefully constructed scenario.

In a study done last year by the Robert Frances Group, which was just as fervently pro-Linux, though far more ethical with its figures, great play was made of the fact that in the Microsoft set up, when something went wrong, external maintenance help was often needed. This meant, it estimated, that one sysadmin could look after four times as many Linux servers than Windows servers. And yet, Giga has software maintenance running four times higher for Linux.

And while we're on the subject of old surveys. In December last year, IDC ran an equally suspicious survey that argued almost exactly the same point as Giga - and, would you believe, that of Microsoft executives - that Windows (2000 this time) was cheaper than Linux "in the long run" and "for some tasks". That survey considered five years of ownership, Giga's was four, maybe by the middle of next year, we'll have a survey that proves Windows is cheaper in certain cases over three years.

Both studies also argued that software and hardware only account for a small percentage of the TCO. Interestingly, at the time, one analyst had a major problem with this assumption - it was Stacey Quandt from Giga.

The Robert Frances Group survey also had a variety of points that it said made Windows's TCO higher than you would expect. For one, the cost of carrying out an audit on licences (something Microsoft has got stroppy about in recent years). Then, there's the cost of downtime on servers that had been compromised by security holes. And finally, the fact that Linux can be run on a host of hardware architectures whereas Windows cannot.

There is also the issue of migration. If you are running a Unix system, even the Giga report agrees that moving to Windows would be massively expensive "in new systems infrastructure, new skills and perhaps replacement applications". A shift to Linux would be far cheaper. But then Microsoft's aim in all this is not to stop a move from Unix to Linux but prevent people from deciding to jump from Windows to Linux.

If it wants to achieve that, it will find that reducing its licence fees would be far more effective than commissioning dubious research.

However, there is another article regarding this article--

Editor's Note: How Analysts Get Paid
Sep 20, 2003, 00 :00 UTC (18 Talkback[s]) (2572 reads)
(Other stories by Brian Proffitt)

By Brian Proffitt
Managing Editor

Analyst's report reveals that Linux is more expensive than CP/M!

News at 11!

And so it goes. Analyst reports on the so-called expense of using Linux are a dime a dozen these days, with one analyst group praising Windows and another anointing Linux with the same praises. It is hard to know who is right and who is wrong. It becomes even more frustrating when it is revealed that some reports are sponsored by Microsoft and other proprietary software companies, for the seemingly express purpose of detracting Linux and open source software.

But are analysts' opinions really bought and paid for, as so many Linux advocates maintain?

Here's a shocker: they are, but not in the way you think.

Looking at the typical analyst firm's business plan, there are few ways to generate revenue for the company. One is to do some research, create a report, and then hope enough people are interested in the subject of the report to buy copies of it. Or, better yet, hire the analyst to do more in-depth research for them on a longer-term basis.

Another way, a more stable revenue-maker, is to supply research based on a client's request. The client sponsors the costs of the research and the creation of the report, and is given a copy of the report at the end of the proverbial day.

So, if a client sponsors a report, than the analyst will always have the report conclude the end results the clients wants, right?

Not if the analyst is honest or wants to stay in business very long.

Microsoft commissioned Giga to do that study on Windows vs. Linux development costs a while back, the results of which were released this month. Clearly, Microsoft liked the results, but did the very fact that Microsoft sponsored the report automatically ensure that the results would be favorable to Microsoft?

To reach that conclusion, either one of two things would have has to happen: Microsoft requested a specific "study" with specific end results or someone at Giga decided to please their client and give them the results they thought Microsoft would want to hear.

Let's tackle the first scenario. If Microsoft did do such a thing, and Giga submitted to the request, then both companies are foolish. By not commissioning an honest study, Microsoft would be blinding itself to the realities of the marketplace and, in this case, of honest development practices. By accepting such a request, Giga--if discovered--would be forever branded as a data cooker and would never be treated with any amount of respect (or revenue) again.

If Giga voluntarily provided soothing conclusions to Microsoft, then Giga is more the villain by sending fraudulent data to its client, and Microsoft is more the fool for listening to such information.

With billions of dollars of sales at stake, it would be surprising to me if Microsoft were deliberately cooking the data or surrounding itself with sycophant "yes-men." Yes-men may soothe the ego, but ultimately they will be wrong and lead you down the garden path to destruction.

So, would Giga's report immediately be dishonest because of Microsoft sponsorship? With so many negatives for such a scenario, I think this answer is no. I think most honest analysts will deliver what they believe to be honest information to a client. If, for instance, Giga's report had gone the other way and they found Linux to be cheaper to develop than Windows, that information would still be useful to Microsoft, and would give them a goal to shoot for.

The only difference would be that had that specific report gone the other way, no one outside of Microsoft would ever see it.

I know honest reports are delivered to Microsoft (and other companies) all the time. Linux has too many advantages for proprietary software companies not to receive bad news about one thing or another. After all, if all the analysts' reports were rosy and cheery for Microsoft, why would the company ever take action against open source?

No, I think company-sponsored analyst reports are more honest than we would believe. But the release of reports is dictated not by the analyst firm, but by the company. Which is why the media and the rest of the community very rarely see reports negative about the report's sponsor released to the general public.

In many cases, when a company hires an analyst to create a report, the final dispensation of whatever information revealed in that report belongs solely to the hiring client. Which means that report and its conclusions belongs to the report sponsor and no one will ever see it... unless the sponsor decides to release the information.

In other words, Giga's report was bought and paid for by Microsoft, but not the conclusion of that report.

Which is clearly what happened in the case of this report. Microsoft liked what it saw, and they authorized Giga to release the information. Without that authorization, Giga would never have revealed the outcome of that report. To do so would be legal suicide. If a report is created that Microsoft does not feel is favorable to them, then they do not release the information.

We know such reports exist. Specifically, some of Eric Raymond's Halloween documents recently revealed that analysts were reporting that Microsoft's continued attacks on Linux and open source software were backfiring. Sure enough, the company changed its tactics. But we were never supposed to know about those reports. If it were a perfect world for the kids at Redmond, their tactics would have just changed and we never would have known why. But the information was leaked (intentionally or otherwise), and now there is a kinder and gentler Microsoft.

This is my reasoning for maintaining that corporate-sponsored analyst reports are not inherently dishonest. I am concerned that the media and the community is far too eager to dismiss such reports because of the implied fakery that is believed to be in such reports. There may indeed be some grains of truth in any analyst's reports, no matter who sponsors them. Would we be as dismissive of a report sponsored by Red Hat stipulating that Open Source Rulez? The media would, but the community might not.

My point here is to try to focus arguments on the content of such reports, and not so much their origins. Crying fake just because we don't like a report's sponsor may be a tactical mistake. The origins of an analyst's report should be noted but it should not be the crux of any argument against that report. The methodology of the report, the cited examples, the data-gathering... these are the areas that should be focused upon, if we disagree with the conclusions.

I am not, nor do I intend to be, an apologist for analysts. But knee-jerk cries of foul will not help win any case against their conclusions. The focus should not be on analysts' honesty--something which would be hard to prove, regardless--but on the accuracy of their claims.

Because even if analysts are being honest with what they conclude is the right answer, that in no way means they are right.

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.