Linux as a technology cost-saving strategy

Michael Sisco

Published: 11 Mar 2004 13:30 GMT

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Many companies are finding the cost advantages of using Linux to be too compelling to ignore, especially in times when they're looking for every cost advantage they can get. The result is that the use of Linux continues to grow.

The opportunity for those who are familiar with Linux is clear. Because Linux is priced at an enterprise level vs. the system level, it creates the ability to eliminate multiple copies of licensed operating systems in a company. By doing so, it allows a company to save hundreds, even thousands of dollars in server and desktop operating system licence fees.

Linux is not a fit for every situation but it's certainly worth evaluating, especially when you have large numbers of PC desktops and servers in your company. The savings can be significant.

Supported system architectures include but are not limited to Intel X86, Intel Itanium, AMD AMD 64, and IBM's zSeries, iSeries, pSeries, and S/390.

Below, you will find the standard Linux cost-saving strategy template used in Mike Sisco's Technology Cost Saving Strategies book and training module, which contains 50 specific strategies to help IT managers improve their companies' bottom line.

After the template, you will find two sample cost examples to give you an idea of the potential savings. In addition, an excellent paper titled, "Total Cost of Ownership for Linux in the Enterprise" by Robert Francis Group, is worth reading.

Description: The Linux operating system is challenging Microsoft for a share of the server operating system space and has a significantly lower price tag. Because Linux is licensed per enterprise vs. per user or system, the cost savings can be significant.

Category: Direct savings

Identify: Inventory all servers, PCs, and computer systems that have potential to operate on Linux vs. Microsoft or other traditional operating systems.

Quantify: Calculate the cost of licensing multiple OS licences for identified servers and/or workstations from Microsoft vs. one license for all workstations and one license for all servers with Linux.

Investment: Yes, a Linux licence (nominal)

Tips:
Start with "noncritical" application servers. Test Linux stability until you are satisfied. Test a small group of IT users for Linux on desktop PCs.

Example #1
Let's say you have identified an opportunity to implement Linux in a Web server environment requiring seven servers to meet the expected daily hits needs. A comparison of the operating costs to support seven Web servers is shown in Table A below:

Table A LINUX-Server Operating System -- Cost of licences for 7 servers Red Hat Linux ES -- $799 Windows Server 2003 -- $2,793

Note: The numbers may differ depending upon vendor price changes, software selection, and negotiated discounts. In this example, Windows Server 2003 with no CALs (client access licenses) was used. A more typical minimum purchase is $999.00 per server which includes five CAL licenses with each server. The lower option was used to make the comparison as similar in configuration as possible.

Example #2
If you have numbers of workstations used for Web browsing or running company business applications that are compatible with a Linux operating system environment, take a look at the numbers in Table B:

Table B LINUX-Workstation Operating System -- Cost of licences for 100 workstations Red Hat Linux WS Standard Edition -- $299 Microsoft Client Access Licensing (CALs) -- $3,995

Note: Prices may vary based upon vendor price changes and negotiated discounts.

Depending upon how you license your Windows Server 2003 operating systems and your CALs, your company may have ongoing annual expenses with Microsoft up to about 25 percent of the original license fees. With Linux, there is no ongoing licence fee charge.

In addition, depending upon the vendor support you subscribe to from either Red Hat (or another Linux software provider) or Microsoft, there will be support cost differences. Normally, you will find additional saving opportunities with Linux support.

It's easy to see the potential savings for a large company with thousands of employees that can take advantage of Linux in its systems environment.

Mike Sisco has been a CIO for more than 20 years and is the President of MDE Enterprises, an IT management training and consulting company. For more of Mike's management insight, take a look at his IT Manager Development Series at www.mde.net/cio.

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