We are in an economic downturn, perhaps even a full-blown recession. Any doubts I had about that were removed by two related, recent phenomena.

The first is that whenever I walk down a high street I see almost every single retailer involved in near permanent 'sales'. Looking into the figures confirms the picture - sales on the high street have fallen for four of the past five months. The second is that high street retailers are now deep in conversations with Open Source companies. Some, like Specsavers, are so far into migrating to Open Source that they are essentially running on it end-to-end. Retail's economic challenges will soon be everyone's.

We all know that with profit margins of 10% it takes £10 of sales to generate £1 of profit. As sales continue to fall, even those in the relatively comfortable position of 10% profit margins have to look everywhere they can to cut costs - every £1 saved goes straight on the bottom line, and can make the difference between business survival or business failure.

In these circumstances the IT budget is one of the first places to come under scrutiny, and most IT departments are coming under increasing pressure to save every penny. And there is a particular lack of grace to the position the IT department finds itself in - not only is it's own budget falling, but the proprietary vendors with which it deals need to ensure their own survival during a recession, and I'll let you imagine how flexible those providers will be in price negotiations if they are in a monopoly position and know you have no choice.

Open Source software has many virtues, but one above all others is suited to the current economic environment - it enables you to strategically cut costs more than any other IT tool available to you. When I say strategically, what I mean by that is simply this. There is an Open Source product that does the job of every single piece of software you are currently using in your business. You choose if you replace it, when you replace it, and how much of it you replace. What is elegant about this is that Open Source fits in so well with proprietary software you can leave the rest of your IT systems undisturbed. You can create a strategic migration plan that delivers consistent cost savings over any time period you choose.

There are two ways Open Source software cuts costs, directly and indirectly. It cuts costs directly by virtue of the fact that there are no licence fees associated with it, that is to say the software is freely available in perpetuity at zero cost. IT projects attract cost in three broad areas, hardware, software and know-how (whether internal staff costs or external consultancy, support or training costs). With Open Source you can remove an entire category of costs at a stroke.

It cuts costs indirectly in a number of ways, three of which we will briefly examine here.

1. The first is that Open Source extends your hardware budget. In terms of new hardware it does this by having a far lower resource requirement than alternative proprietary solutions. In terms of old hardware it does this by extending the lifetime of existing hardware.
2. The second is that Open Source drastically reduces the administration overhead on your staff. One, it 'just works' - Open Source systems are widely and justly lauded for incredible reliability and robustness once set up. Two, it is also justly famous for its resistance to viruses and other malware - a major time-sink in most IT departments. Three, it eliminates at a stroke the requirement to track licences for legal compliance and removes the threat of enforcement tactics from people like BSA, FAST and proprietary vendors.
3. Finally, Open Source in the mix at any organisation has some wonderful effects on the account management you are experiencing from your proprietary vendors. The first is that vendors attention on your account is revitalised in a way that nothing else seems able to do. The second is that prices will be held down and discounts offered in any situation where you are comparing the vendors products with Open Source (this happens much more where you are serious about Open Source, and are already running several Open Source systems).

In conclusion, Open Source software offers businesses a powerful strategic tool in their armoury to survive, perhaps prosper, in the economic downturn. Businesses of all sizes, from corner shops up to the largest high street retailers are turning to it strategically, and your business could benefit from it too.

Welcome to the first episode of "Open for Business", a regular column intended to examine Free Software/Open Source from a Business perspective, and to do this in plain English. In fact this should probably be OfB 'the next generation' as the column is returning to Linux User and Developer after an absence of a few years. Time has treated the business of Open Source very well indeed, and I can happily report that we have never been stronger in the enterprise, and that companies everywhere, UK and abroad, are enthusiastically migrating to Free Software as we speak.

For our starting article we are going to do a lightning survey of Free Software in Business, focusing on the UK. Oh, and the rest of the world is doing pretty well too...

We will begin with exactly what 'Open Source' means to business, not the Free Software philosophy, not discussions about licences, but plain English why 'Open Source' is becoming more and more popular in business and what it gives us.

Next we will take a look at the Free Software 'stack' and answer the question of whether it is possible to run a business entirely on Free Software. Having answered this we will look at just how far you can take it - how big a business you can run entirely on Free Software.

We'll have a look at the kinds of businesses which are looking at Free Software, and why, before finally zooming out and looking at the current business and economic environment. Everything will be illustrated with real UK household names...

Let's get started!

Much of the debate about 'Open Source' has been in technical terms, or increasingly in political terms. I'm not criticising either approach, but I suspect many potential business users are left cold by discussions that border on the religious in their fervour. What companies really need is a direct and clear discussion about the tangible benefits of Free Software, without the political baggage.

At heart, the business arguments around 'Open Source' are simple. They are about cost, and they are about how to give an organisation the freedom and flexibility to run its IT for itself. It's about escaping the world where the tail wags the dog, and reclaiming the agenda to make technology serve your goals.

Look at any organisation, and you'll see that IT consists of three broad groups: hardware, software and the "know-how" that makes it all work. It has been said that "IT doesn't matter", and increasingly, that's true. The purpose of IT is to serve the goals of the organisation, not the other way round.

We don't create IT systems for their own sake; we create them to communicate internally and externally; to create, manage and store our documents; to help run our organisations; to gain control of our finances and accounts. If we can do all this while figuring out how to do it better and reduce our costs, we are meeting the economic imperative of doing business.

The first part of the IT equation — hardware — is now a commodity. You and I don't buy hardware as an end in itself — we buy it to do a job, which is to run software. The most successful hardware companies are those that figure out how to deliver products for the lowest price.

The second part, software — or, more accurately licence cost — is heading the same way. Free Software represents the logical end-point in this process. Again, you and I don't buy software as an end in itself; we buy it to do a job. In a free market, the most successful software companies would be those that work out how to deliver applications for the lowest price. If you can acquire software that is fit for purpose, but without buying it over and over again in licence fees, why wouldn't you?

But the real key to IT in business is the third part of the equation — the "know-how" to make it all work, and to make it serve the goals of the organisation. Whether that's user know-how, administration know-how or external know-how, the system won't achieve your goals until you provide it.

The new business IT success formula is simple:

commodity hardware + Free Software + appropriate know-how = competitive advantage

Free Software is not the best business solution in all cases. There are enterprise-class Free Software projects that are the very best in their field, others that are way behind, and many that are simply at parity or rapidly approaching parity with their proprietary alternatives. What is true is that there is an enterprise-class stack that your organisation can run on, or can be included in the mix of software that runs your organisation.

The sheer number of organisations now taking advantage of this stack is overwhelming, and it's time to discard the notion that they do it because they 'can't afford' proprietary software. Take a look at some of the emerging technology giants (and if you thought of Google, for example, you're probably not the only one), and you'll see that massive usage of Free Software is a fundamental part of their competitive advantage.

So let's take a closer look at this stack...

What we mean by the term is the pile of software that organisations use to help them run their business. For a small company the stack is quite simple - a file server, a print server, internet access and email... maybe throw in an authentication source with a user database and you're good to go - your employees can connect to this and get on with their work using their windows desktops (and increasingly MacOSX and GNU/Linux desktops). As businesses grow there are many, many more layers that can be added to this 'stack' - databases, accounting systems, Document Management, CRM (Customer Relationship Management), ERP (Enterprise Resource Planning), various security and intrusion detection layers, and a whole host of more arcane systems enabling the various things that businesses do. The major old-world IT suppliers make a big deal about their own proprietary systems covering the whole of the 'Enterprise Stack' and compete on their ability to supply all of it. Naturally they do not spell out the downsides, chief of which is usually non-standards compliant proprietary lock-in.

The rate of development of Free Software is astonishing to the point where we now have a complete Free Software stack. The 'basic infrastructure' story has been strong for many years. Recently this development has raced up the application stack to the point that it is now possible to run a business end-to-end on Free Software. Not just infrastructure and web services, but document management, ERP, CRM, databases and so on, right out to the desktop.

Let's pause for a moment and look at some real UK enterprises working with parts of the Free Software stack. Samba is being used for file and print in household names like Pentax and Specsavers, internet access is being provided to hundreds of thousands of users by Squid and other Free Software at the Yorkshire and Humberside Grid for Learning and ISPs everywhere. PostgreSQL has replaced a well know proprietary databases (Oh!) for Yellow Pages and Sony Ericsson, MediaWiki (which Wikipedia is built from), does the knowledge management for BOC/Linde and Linklaters. Standard Life does all it's email, anti-spam and anti-virus processing with Free Software... The list goes on, and these are just individual components - we'll get to enterprises going the whole way with Free Software shortly...

The industry, or, for want of a better word, the ecosystem around Free Software has sprung up to the point that every aspect of the 'software stack' can now be commercially supported. The supplier landscape is rich with companies that can handle a part, or even the whole, of any deployed combination of Free and Proprietary software within an enterprise.

The emergence of the whole enterprise stack has gone hand-in-hand with awareness of the individual parts that make it. By this I mean that the modular integration historically boasted by the proprietary players is now seen in the Free Software world. We can take it for granted that Samba plays nicely with OpenLDAP, plays nicely with Apache, plays nicely with PostgreSQL, plays nicely with Alfresco, plays nicely with KDE, and so on. Not only this, but Free Software goes out of its way to fit in with proprietary infrastructures in a way that simply doesn't happen in a world driven by warring 'not-invented-here' proprietary vendors seeking to permanently lock-in their customers to maximise their own profit.

On the desktop, the emergence of KDE4 has brought a Free Software desktop that is at least as good as MacOSX, and leaves Vista trailing a poor fourth (just behind XP).

In parallel with this, we are seeing the emerging industry working hard to fill in all the areas that, historically, purely community-driven projects have had the hardest time with. Things that are important to paying customers, things like clear and complete documentation, easy to use 'management' interfaces, recognisable support structures with associated Service Level Agreements, and all the things that give confidence to end users of software to invest in it for the enterprise.

All this has made way for the rise of companies running their entire business on Free Software. The phenomenon began in the mid-2000s with companies like Killby and Gayford Group and ESR Technology (formerly the risk-assessment arm of AEA plc) replacing *all* of their proprietary software and running end-to-end on a complete Free Software stack. Today we have billion-pound companies like Specsavers pushing the Free Software stack into all areas of their business. Specsavers runs all of its directory services and authentication on OpenLDAP. All file and print is through Samba. Email and webmail are Free Software. Even out in the stores this usage continues right up to the line of business application that they run on, developed in-house with Free Software and running on an embedded GNU/Linux platform. In fact Specsavers' IT Director, Michel Khan, attributes the remarkable growth in stores to over 1000 (opening at a rate of 2 stores per week!) to the rapid deployment capabilities of a desktop and back-end Free Software Stack.

Finally, some brief notes on the Free Software state of the nation:

Free Software is here to stay, and is the key to success of a vast and growing proportion of enterprises around the world. In the UK it is used in individual components by multi-billion pound companies, and as a whole integrated stack by its first billion pound company. Sadly, this is not widely noticed in the UK Public Sector, far too many of whom do not appear to realise that Free Software is now the textbook way to build a large, potent, service-based enterprise in the shortest time and the most cost-effective way. There are notable exceptions, and some very fine large-scale implementations of Free Software in a growing number of Public Sector organisations, but broadly speaking it is true that our current government are well behind the adoption curve.

In terms of real structural obstacles, I'm sorry to report that UK Government policy is a barrier to the wider use of Free Software. Whilst many of the largest businesses in the UK are quietly and happily adopting it all over, the Public Sector is actively discouraged by bureaucracy and poor policy, Becta's procurement list for Schools being a prime, but not lone, example.

In terms of Government and Political acceptance, the European Commission has been increasingly flagging it's view that 'Open Source' represents a significant opportunity for Europe, in terms of building an indigenous technology *industry*, in terms of closing the Research & Development gap between Europe and the US, and in terms of massive competitive benefit to the European Public and Private sectors.

Whilst the UK Central Government does not appear to have woken up to the opportunity, we now have the position in the UK that the Conservatives, Liberal Democrats and the Greens all have 'Open Source' policies and support up to the Leader/Shadow Chancellor level. If the current government is not pro-Free Software, the next one most likely will be.

Technology purchasers are realising the fact that the anti-Free Software propaganda they have been hearing is not true, and has been peddled to them by providers who may not have their best interests at heart. You can't fool all the people all the time, and in an economic downturn organisations everywhere are more willing than ever before to hear the Free Software message.

Free Software really is... Open for Business!

The 'Open for Business' series is published in Linux User and Developer Magazine

Recently I attended a presentation given to all the major UK suppliers of ICT goods and services to schools. It was hosted by the Becta, the government quango responsible for the use of ICT in schools, and was all very worthy with a lot of talk about value for money and exhortations to encourage diversity, simplify supply lines and so on, but just one slide of the presentation did jerk me into life.

On it was a differentiation between proprietary software; free software and open source software. Naturally I asked the presenter for clarification of the terms as I was a little confused. He was unable to clarify beyond saying 'well, you know, for example Google Earth is free software and we would like to encourage schools to take advantage of this kind of (good) thing'.

Fair enough. Google Earth is a fine free application and never mind that it is proprietary software in the sense that all proprietary software is proprietary in as much as it is owned by someone and you dont know how they did it. Never mind either that open source software does not have to be supplied free (though much is of course) and that no one owns it and you can see how it was done from the code supplied with it.

These niceties are a little advanced yet for our Government friends.

No, what got me thinking was the whole thing about what is generically called 'freeware' (proprietary free software) and its use in schools.

I admit to using loads of the stuff and installing it on lots of friend's computers. Probably my most popular are the Google suite of goodies and AVG's free anti virus package. There are of course loads more, Opera, WinAmp, SpyBot, iTunes, Picasa spring to mind.

Little mini alarm bells however started ringing in my head quite recently (tinnitus?). We all know that in the freeware sector of the market 'revenue models' are oft discussed along the lines of 'how the hell do you make money from this stuff?'. With something like iTunes it is patently (no pun intended) obvious, less so say with Picasa.

An interesting 'journey-to-revenue' is provided by the story (ongoing) of Grisoft's AVG anti virus software for Windows. Being a long term AVG fan I have installed the free virus checker on (friends) Window boxes for many years. AVG now at version 8 still has a free version and very fine it is too; ok it's a little tricky for the non technical to now find the free alternative when automatically upgrading from 7.5, but it can be done, and if you wish to avail yourself of the extra features of the paid-for versions the prices are very reasonble.

However, when upgrading a tranche of older laptops I have run into problems. Upgrading them to Windows Service Pack 2 and installing more RAM onto 4 year old XP Home setups being a most time consuming activity. It comes as no surprise that a few owners simply decided to go to PC World and buy a new laptop thereby ensuring one more sale of increasingly stalled Vista!

Now of course AVG have every right to move to a paid for version of their excellent product and it makes sense to 'encourage' its userbase to upgrade their machines to a (more) secure operating system but the point is obvious; what is free today may well not be free tomorrow and if it is proprietary software and you are dependent on it you will have to stump up the cash.

If we now return to freeware in schools. Imagine that School A has saved itself a load of money and now only uses Netbooks rather than traditional PCs. They use free online applications for all their word processing, spreqdsheets, presentations, pictures, email and so on. They don't need expensive technicians, storage, applications or software licences and they can remodel their ICT paradigm accordingly.

Then one day, just when they have got used to this situation and integrated it into every conceivable scheme of work it becomes time to pay their dues. How much no one knows.

I do not need to labour this point and I'm not suggesting that there is any evil plot going on by freeware suppliers, I just wonder whether it is wise for the Government to encourage schools into a situation which may turn around and bite them hard, where it hurts most, in the pocket.

The solution is obvious. Schools can be encouraged to safely embrace free open source software otherwise known as FLOSS which stands for Free Libre Open Source Software. No one owns FLOSS so no one supplier can determine on what conditions it is supplied to schools or in what direction it develops.

This is the only way schools can cut costs and share in the collective 'ownership' of its vital resources.

So in conclusion, definitions do matter after all; quite a lot more than our cost-conscious presenter appeared to be aware. Maybe when truly there are FLOSS suppliers into the education market more will come to appreciate the point of this particular blog.