[TriLUG] OT: figuring out financial info for switching to Linux

[Maria Winslow]

This is a very interesting area that I am dealing with now for customers. We 
are finding that non-technical managers, and even CIO types, have no idea of 
the options available in the open source world. They haven't really thought 
about the percentage of license fees that go to MS Office, for example, and 
their ears perk up when they see how OpenOffice looks on a well configured 
laptop. Even just moving from MS Office to OpenOfice can save a bundle.

Since most places buy the MS software with the machine, you should figure out 
what the OEM cost is, and start there. You can figure about $160 for XP, $330 
for Office, and $50 for Norton Antivirus, for a total of about $540 per 
machine. And that's if you don't plan to buy other software such as Exchange 
seats ($67 per machine), Photoshop, Acrobat, etc, for which there are free or 
low cost alternatives. My advice is to look at the standard setup and add all 
these costs up. Even if you give them just this number, they will be 
surprised. Keep in mind that MS licensing fees have been "hidden" in the 
hardware cost when you buy machines, and are easily overlooked since we 
didn't have these open source options before. 

Other factors to consider are the cost benefits of increased reliability, 
security, and remote maintenance. These are more difficult to figure, so I 
recommend including the list of benefits and taking a guess at how many hours 
of productivity will be gained. This could translate to free time for working 
on that custom application you don't have the staff for, for example. Try to 
work in something that would be particularly interesting to your manager. I 
wouldn't make up something outrageous, since the license savings alone will 
speak volumes. Also remind them that a Linux upgrade gets them off the track 
of continual costly MS upgrades, leaving more money in the budget for future 
projects. 

Finally, a note about why this is interesting to me: I have started a new 
company to assist businesses in determining their appropriate Linux/open 
source upgrade path, and provide all the services needed to make it happen. 
We offer a no-cost initial assessment designed for non-technical (or 
semi-technical) executives to help them understand their options and look for 
ways their company can take advantage of the cost savings of Linux. Please 
pass the word if you know anyone who would benefit, or give me a call 
sometime (968-7802).

Maria

On Wednesday 04 September 2002 12:20 pm, ya'll wrote:
> This may be somewhat off topic - but I couldn't think of a better place
> to ask :)
>
> Have any of you (either for your own client or the company you work for)
> had to figure out financial information such as ROI, etc for using
> Microsoft vs. Linux? I'm not really good with numbers although I could
> follow formulas for stuff if I had good directions. Where do you learn
> to do this? Is this the kind of thing an accountant would do?
>
> Thanks for any info as always!!
> Lisa B.
>
>
>
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-- 
Maria Winslow
maria.winslow at windows-linux.com
919.968.7802

Open Source Migrations
www.windows-linux.com