Proprietary Software vs. Open Source - The Hidden Costs

Nov
20

Trellon seems to be facing more and more projects where our customers need to make a decision on which content management system to use for their web properties. We work with open source technologies and have vast Drupal expertise so we can assist with the decision to use Drupal as the underlying content management system for Web properties vs. a proprietary program. Here we will lay out the pros and cons of each so that you, the reader will have a better understanding of the optimal direction for your firm. The good news is that Drupal and other open source content management systems are being considered in more and more enterprise (think large) installations due to the fact that their value is so high. Open source content management systems like Drupal, Joomla and Mambo, all offer significant functionality with no software costs or licensing fees.

For companies looking at the above choices, there are a variety of overt and hidden factors to consider. At high level, Drupal offers extreme flexibility with existing, proven and supported modules. This means that an enterprise can implement Drupal to meet very specific requirements while leaving the door open for change later. For instance, you may want to launch a social media site on a restricted budget. Drupal will allow you to start with minimal but necessary components and then add more functionality later when budgets are secured. Remember that you are only paying for services and hosting when using open-source software like Drupal. Here are some thoughts on comparing open source software to proprietary programs:

Initial Costs -- both open source software and proprietary software require upfront costs. With open source, you pay for services to implement the required software, and with proprietary software you pay for implementation and configuration services. Both choices will have variable costs which can't fully be defined here. Both will need the help of consultants or consulting firms in order to get the job done. Both will require upfront training on how to use the systems. Proprietary software however, will come with what could be significant software costs for the initial license, where Drupal and open source software have no software costs.

Ongoing software costs -- open source software requires no ongoing costs. Proprietary software requires ongoing license fees that can average anywhere from 18 to 22% of the initial software costs, annually.

Maintenance costs -- open source software can require maintenance costs for new developments or additions. Also, with open source as the software is upgraded, there will be light-weight tasks to do on an annual basis. For example, if there is a new security patch applied, then there will be a few hours of work which will need to be applied. However, you will only take on larger costs when you want to add new functionality to improve your web presence.

Product changes -- with proprietary software you have to go back to the original vendor for product changes. Proprietary software is built on the theory that the vendor wants to provide most of the components necessary for a broard marketplace, so that the software vendor can earn reasonable product margin. This way, the vendor can build it once and deploy it many times over. Sometimes called vendor-lock, this becomes problematic when you would like to change an element of the software for your installation. In order to have any custom changes made, you will have to go back to the proprietary vendor order to get that done. This is very difficult to do. The reason is, the software vendor has to weigh the change across all of their customers to see if it's something that will add ongoing value to more than just your installation. If not, in most cases proprietary vendor will not make the change for you.

With open source, changes are always available since you have and can access copies of the code. Depending on the open source software you use, there will be either a few or a lot of consultants and companies that can help. For instance if a company like Trellon builds your site, you can go back to us or choose a new vendor or consultant who knows Drupal. So the strength of the community plays a role to help you build out specific functionality and requirements. Key is that your installation is completely yours to change anytime you see fit. So Drupal and open source give you extreme flexibility.

Hidden costs -- One of the most important hidden costs in using proprietary software has to do with business processes. With proprietary software, you are required to use the software as it exists or with slight configuration. However, for the most part you will need to mold your business processes to the way the software operates. This can be quite expensive and unruly.

We all know one of the hardest things to change is staff behavior around business process (In other words, asking your employees to begin to work in a different fashion). In some cases this can be fatal to the project. Years ago, I spoke with a consultant who worked on installations of one of the major CRM systems of the time. I won’t mention a name here, but these installations averaged as much as $10 million each. In the end, he told me that nearly every installation that he and his company worked on, failed. The reason was, they were asking large enterprises to completely change their behavior in order to work with the software. In the end, employees just were not willing to make those changes, so he told me that the last three implementations had been completely scrapped, meaning all invested funds were lost, let alone the opportunity costs of time.

When using open source software like Drupal, you can build the software to match your business processes. This means, that there will be very little if any change required from your employees. In fact while gathering your requirements it's probably best to have employee involvement so that if a company like Trellon is building your project, we know the business processes upfront and can customize the software to those processes, thereby significantly reducing risk of project failure.

As an example, Trellon used Drupal to build out a social media site for Alegent health, one of the largest healthcare organizations in the United States. Alegent came to Trellon in search of a new online social media platform to not only connect their staff and resources with new and expectant mothers, but most importantly to allow these women to connect with each other. The site also allowed expecting moms to identify themselves with various subgroups within the site, so that, for example first time moms and women expecting twins, could identify themselves and connect with each other. You can see more of this case study by clicking here: http://www.trellon.com/project/alegent-health

Key is that's Alegent was able to define custom requirements which were delivered via Trellon using Drupal. It would have been very difficult to find a proprietary software program that could have done this work on an affordable budget.

In conclusion, there are a lot of factors to weigh when making a determination to go with an open source solution like Drupal, or a proprietary solution. Each has some benefits but only Drupal is completely customizable and free.

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