July 27th, 2006
Does open source usage free your budget up for the best talent?
Here’s a great "opportunity cost" question. It’s no secret these days (just look at the gazillions of studies) that it’s not necessarily cheaper to run a business with open source software than it is to run "closed-source" commercial software. The actual costs just show up in different places. But what rarely gets explored are the trade-offs that are made when your fixed budget is spent in different places.
For example, what would you rather have? A support contract for your IT with a Fortune 500 company? Or, in lieu of that, the very best in-house talent to run your open source-based IT? Most companies can’t afford the luxuries of both. That question never crossed my mind until Dabble CEO Mary Hodder answered the very last question in my interview of her which is available as a podcast here on ZDNet. I’ve been stewing on her answer for a couple of days now because of how well and succinctly she captured the essence of that trade-off. The start-up technology for Dabble (which launched this week) is all open source: FreeBSD (the operating system), Apache (for Web servicing), and MySQL (for the database). When I asked her if the choice to go with open source is helping her to keep costs in check, here’s what Mary said:
What happens with open source is you actually spend the same amount of money, but you don’t have lock-in and you pay for really good people to run it. And so you still end up paying. But you just pay in a different place. And I think it’s a much more sustainable model for that kind of server/software development.
On multiple occasions during the interview, Mary spoke very highly of Dabble’s engineering team, making it very clear that they were the key to Dabble’s success. Personally, speaking, having managed people for more than 20 years, I would generally do anything to open the budget up if it meant getting better people. And never is having the right people more important than when you’re starting something up. Moving forward, as more businesses startup (and now is a good time according to Dan Farber’s coverage of the AlwaysOn conference) and need to make this choice, the more this will be a thorn in the side of commercial software companies that need new customers to sustain revenue growth (as opposed to holding steady with support contracts from their existing customers who are loathe to upgrade).
