Spend More on IT To Save a Trillion Dollars on Open Source

In a recent headline, ComputerworldUK promises to answer the question How to Save $1 Trillion a Year with Open Source. The headline is based on a blog post using multiple dated studies about worldwide information technology (IT) spending, tortured logic, and footnotes about the logic that lead nowhere. To be fair to the author (Glyn Moody), I don’t know if the headline is his or a ComputerWorld UK editor’s.

So as a public service to the IT community I have read the actual source material cited in the blog post and figured out that the world can save a trillion dollars with open source if you in IT simply increase your IT spending 400% to 500% and migrate all your mainframe and Unix boxes to Wintel.

It’s that simple.  Why has no one thought of it before?

Of course, open source terms and conditions (Ts&Cs) do not relate directly to most IT spending (personnel costs, overhead, systems, storage, training, IT or professional services spending, etc.) that make up the bulk of the costs noted in the 18-month-old Standish’s report cited in the ComputerWorld UK blog post. In my experience there might be the following indirect relationship:

• open source Ts&Cs might reduce your software license spending by a small amount (the Standish research confirms that)

• but will probably increase your personnel or IT services by at least the same amount, creating a wash

I admit that I have not confirmed that opinion in any statistically significant research.

All I needed to answer the headline’s question was to consult the recent release of worldwide gross domestic product (GDP) numbers by the World Bank and the previously mentioned Standish Report, called "Trends in Open Source." A subscription is required to read Standish’s research but the report was widely distributed to press and analysts at the time of publication. The arithmetic is simple especially compared to the arithmetic in ComputerWorld UK:

• Standish says users can derive 6% savings from using open source, both in initial and ongoing costs (I am just reading the report, not verifying its conclusion)
• The World Bank says the total of all countries’ GDPs is $60 trillion (other sources such as the International Monetary Fund and the U.S. Central Intelligence Agency publish similar numbers)
• If IT users spend 27% of revenue on IT (using aggregate worldwide GDP as a proxy for aggregate worldwide corporate revenue), use open source in the way Standish recommends (“running open source using commodity hardware”), the 6% savings will be a trillion dollars

Forget the fact that most IT users spend 5% or less of revenue on IT according to Gartner, not 27%. This is an open-source-related blog post. I can make any outrageously misleading claims I choose.

-- Dennis Byron