A recent study by Germany-based Webmasterpro.de, reported in Dataquest magazine, points out that Microsoft’s Office has 88 per cent adoption rate in India, while the competing OpenOffice has five per cent share of the market. The figures are largely comparable for markets across the world. Similarly, the latest International Data Corp (IDC) global server market share tracker pegs Windows Server at more than 75 per cent market share worldwide while Linux stands at 20.8 per cent. 

While we at Microsoft are certainly very happy to note the above, that is not the point of this article. Given that both Microsoft’s Office suite and Windows Server are paid-for software, while OpenOffice and most distributions of Linux are available for ‘free’, the numbers might seem surprising. One would imagine that “free” would be more attractive, and therefore show higher traction. In fact, consider any major class of software application – be it the office productivity suite, relational database or ERP – the market leader (by volume) is rarely a vendor offering free software. There can be only one reason for this. Customers tend to look beyond the ‘free’ connotation and lay more emphasis on the “value” that their software investments deliver rather than just the initial cost savings they might realize with the cost of acquisition. 

Even in this world of changing economic conditions rarely is there a singular focus among businesses and enterprises on monetary Return on Investment (RoI) with little regard for imperatives like productivity, reliability, sustainability, or data security. Although hidden, the true cost is often in the loss in these areas. In fact a 2009 IDC report pointed out that acquisition costs for software turn out to be just a fraction of total cost of ownership (TCO), averaging only about seven per cent of the total cost over three years. For most businesses, TCO is becoming the acid metric to determine the business value of software, and this is the right approach. In this age of cost control – it is all the more necessary that businesses align their technology investments to long term business and productivity goals rather than short term price benefits. Fortunately, the market is competitive, and customers will find options for all classes of software applications at different value and price points. ‘Free’ software too does offer a certain value at a given price point, however empirical evidence as well as market trends conclusively suggest that this value comes rarely free or even cheap, by relative standards. In fact, as a Gartner report last year pointed out, ‘50 per cent of mainstream IT projects using free software are unlikely to achieve cost savings over proprietary alternatives through 2013’. 

That said, there are organizations which are happy with the extent of value delivered by software that is available for ‘free’ – with the argument that it is ‘good enough’. And that is true. The TCO acid metric notwithstanding, there is really little sense in realigning corporate IT strategy and make new software investments, when existing investments pass muster. Heterogeneity is therefore a reality today, and so, in many ways, this debate over free versus proprietary software is perhaps no longer valid; as the market has both demand and room for all types of software, and both ends of the spectrum realize there is a need to come to the centre – a centre that is defined by customer need. 

Living in this mixed-source software world, the focus has now shifted on ensuring interoperability as a means of delivering greater value to software users. At Microsoft, we recognize that for an end-user to move seamlessly between different technology platforms, interoperability is paramount. Microsoft’s commitment to deliver technologies that offer best value to our customers and partners is manifest through our continued and significant efforts in ensuring interoperability. In 2009, Microsoft contributed 20,000 lines of code to the Linux kernel for virtualization drivers. On the cloud, Microsoft’s Azure platform is the most interoperable platform today with support for PHP, Java, MySQL, Python, Ruby, Eclipse and many more besides .Net. As the leading industry analyst firm the 451 Group points out, “the line between closed and open source has blurred; as free and open source software is embedded in proprietary products, and commercial extensions have been added to free and open source software.”

The emergence of the cloud is further making this whole open-vs-proprietary debate irrelevant. When software or a platform is offered as a service, all it matters to a customer is the net business value of that service, and whether this service interoperates seamlessly with existing IT investments and the environment.

Clearly, in this new world of unrestrained software choice, heterogeneous IT environments and software as a service, the implications are clear for businesses: software procurement decisions must be based on a comprehensive, pragmatic calculation of the value delivered by the software. The vendor community must keep their biases out, for the greater good of the customer – and come together to deliver comprehensive solutions that will in the end serve the original purpose – better business for the customer. And a happy customer as they say – makes a happier industry.

(Pallavi Kathuria is Director, Server Business, Microsoft India. The ideas and views expressed in this article are those of the author and do not necessarily represent the views of CyberMedia)