TCO: Total Cost of Ownership - a case for Linux in Schools

Amidst the brouhaha over the Microsoft sponsored study that reflected the act that “in the long run, the TCO for systems running Linux as OS would be considerably higher than ones running on MS platforms”, one item that got lost is the usage of the word TCO. TCO as defined by the above mentioned IDC study relates to the cost of ownership, however in this case the author would like to evaluate TCO as Total Cost of Operations and thus extrapolate the inherent benefits of schools switching their networks over to a more viable and cost effective Linux based setup. The author would also like to mention that Linux as mentioned throughout the paper stands for GNU/Linux and in general such comments are applicable to the OpenSource movement in general.

FreeBSD and Linux systems can be of enormous benefits to school business models. While these operating systems have long been adopted as the backbone of the IT industry, running web-servers and the like, they are also in areas of mission critical importance replacing Microsoft and Novell File Server(s). The Linux operating system and other OS under the umbrella of OpenSource or Free Software movement can be obtained for free from the local Linux Users Group - nothing comes cheaper than that. Yet the price may not be the only advantage that schools will obtain from such a switch over. Recent developments in application suites entail that a wide array of established and presumed applications and operations are handled by such OSs. Moreover, the unique networked environment in schools makes Linux a better choice.

The computer environment in schools, in the ubiquitous “computer room/lab” is distinguished by rows of personal computers. And therein lies the rub. Personal computers/desktops are meant to be what the name suggests: personal. Oriented towards the home working environment, these are suited to handling at the maximum of 4 user accounts. Yet, most computers in schools end up having at least 5 different users on a daily basis. As an experiment, I would ask the individual entrusted with the functioning of the computers to check the number of profiles that these machines seem to collect. So the structure is fundamentally flawed in a way that the machines are made to do what the OS was never designed to accomplish.

Unix/Linux addresses the issue from a completely different perspective. Being utilized in an era and in environments when everyone shared a computer, structures are in place to allow such an interaction to occur. File level permissions, user accounts and concepts of “home directories” permit multiple users to interact with a customized version of the same OS. Features like the Network File System [NFS] and Network Information System [NIS] add to this concept of customization. Microsoft Windows platforms as well as Novell also provide NFS-NIS or semantically similar features, yet the crux is that desktops are not suited for multiple users. Although concepts of “server” and “client” are not dealt with in detail, provided below are a general list of application(s) and suites that make migration to Linux platform a viable alternative.

1. Email : Sendmail/Qmail is a stable and immensely popular as well as the de facto standard Internet mail server.
2. Web server : Apache is the most popular web-server powering a number of high-volume high hit ratio sites.
3. Caching proxy server : Squid is one of the best and fastest proxy servers.
4. Windows file serving : Samba is a set of programs that lets a Linux/Unix computer do a reasonably efficient emulation of a Windows NT file server. Though short on some NT features, it does provide enough for schools to use it.
5. Database serving : Several high quality and powerful dbms are available for this OS, with major vendors supporting the movement, choices are bound to be wider.
6. DNS : Provided for intranets.

The list is not exhaustive and neither is it meant to be. Programming toolsets, office utilities and the like were barely touched and a host of other features remain to be discussed. However, the purpose of the list provided above is to be a pointer to the unique features that make Linux/Unix a suitable and a viable alternative for schools and the like.The OS along with a whole tool chest comes free. And though not always promised, any Linux/Unix installation can ask for help, qualified and voluntary from the local LUG. In current times, post installation support and maintenance market in this domain is looking up and qualified professionals are available who setup, configure and maintain a customized network.

Schools are surprisingly conservative places. FreeBSD or Linux on every server and ever desktop is not yet on anyone’s horizon. The poor situation of staff training is also of concern, and is unlikely to change. Teachers with anything more than the most basic IT skills will have them only because of significant personal investment. This personal investment naturally magnifies the reluctance to change. Very few computing teachers and computer administrators in schools have any experience whatsoever with the Unix command line. While perhaps not so important for desktop use, it is still an important part (indeed, a strength) of server administration. The psychological magnitude of this cannot be over estimated. With networking, lack of head office support means that computer administrators and principals are often bombarded with advice from vendors, but in no position to competently evaluate issues that are more properly the domain of engineers. FreeBSD and Linux enthusiasts are always quick to point out that their systems are much more stable than Windows. This is true for them: a competent administrator of these systems can make their systems close to perfect. However, CD distributions of FreeBSD and Linux always require some sort of modification to work perfectly in a networked environment. The user database and file system access is based on a fairly old and simple model. It is not yet fully Directory orientated like Novell or Windows 2000. Unless you have a huge organization with many different levels of administration, this is not that much of a problem. Its simple approach is in some ways an advantage. However, expect those with a stake in promoting Novell or Windows 2000 to make this issue much bigger than it really is. When properly configured, server software is in many ways clearly superior to its Windows or Novell rivals, but the truth is that desktop “end user” software still has a way to catch up to commercial platforms. The gap is closing fast - but the gap is still there. Some of the graphical and multimedia software from Macromedia and Adobe has no equivalent for FreeBSD and Linux.

Lack of support: This is perceived problem. The truth is that FreeBSD and Linux mailing lists offer some of the best support available - at any price. There is also commercial support available - at commercial prices.The total cost of operation of a suite of free software is the price determined by a competitive market for a bundle of services associated with that suite. As the source code is freely distributable (open) and therefore not subject to limitations on development or distribution, the market for services relating to that code will be perfectly competitive. A rational vendor will use a proprietary route for a program in only those business cases where releasing that program in that way will allow them to increase their profit above that which would be returned to them by the operation of a competitive market. This result should be hardly surprising, given that the express objective of copyright law is to mandate a market failure and permit software creators to extract above market rents as an incentive for the creation of that software.

Customers attempting to evaluate a free software vs proprietary solution can safely confine their investigation to an evaluation of the ability of the packages to efficiently and effectively fulfill the customer’s needs, and may presume that the long run TCO will favor the free software package. Further, because the licensing costs are additional dead weight costs, a customer ought to also prefer a free software solution with functionality shortfalls where those shortfalls can be overcome for less than the licensing cost for the proprietary solution or in other words, acceptable cutbacks are a optimization policy when comparing free and proprietary software. A Free software TCO advocacy paper by Brendan Scott [], a lawyer specializing in IT and telecommunication law opines that - TCO is often referred to as the total cost of “ownership” rather than of operations. It has traditionally been used as a means of measuring the impact of certain strategies on a business. A canonical example is that of deciding whether to buy a cheap printer, which requires expensive proprietary consumables. While the cost of acquiring the printer can be significantly lower than that of acquiring a competing printer, its cost to use may in fact be much higher because of the need to pay higher prices for consumables going forward. In order to address this difficulty a manager can cost a given printer by taking the buy price of the printer and adding the total cost to make all of the prints it is expected to make during its lifetime. Other factors may also be added, such as the cost of its maintenance or an apportionment of the salaries for people employed to administer the printer over its lifetime. Thus managers can arrive at a single figure which better reflects the real cost of a printer’s acquisition than its mere buy price. This gives managers an objective basis on which to make comparisons of different printers against a common metric and thus aids decisions about printer purchasing. Ironically, the additional expenses incurred in relation to proprietary software are actually costs, which arise from a purchaser’s failure to own the software in question. As we will see, they are largely costs of non-ownership. Main among those costs of non-ownership are the monopoly rents that non ownership allows vendors to extract over and above the price that would be determined by the market. Free software vendors may object that the adoption of an existing acronym (TCO), which obscures the existence of these costs of non-ownership implicitly, aids proprietary software vendors. However, for the purposes of convenience, we retain the acronym TCO in this paper. We use it to mean the total cost of acquiring and operating a given suite of software over its lifetime, rather than of “owning” that suite. The cornerstone of proprietary software is the grant of monopolies by the legislature to private individuals. These monopolies, most commonly affected through copyright legislation, take rights (notably the right to copy) away from citizens generally and vest them in the monopoly holder for a given work. If proprietary software is an example of mandated market failure, free software is the market’s response to that failure. In some respects the free software movement can be regarded as the market self-correcting for the market failure mandated by Congress. The free software business model leverages off two key characteristics of software - that it is both non-rival (use by A does not inhibit use by B) and durable (in theory software does not wear out) - to ensure its creation through the aggregation of a number of individual small contributions. To quote another analogy in this area - each person contributes a brick, but ultimately each person receives a house in return. As software is nonrival it is possible for each person to take the full benefit of the whole. Further, as it is durable, substantial value can be aggregated from minor contributions over a long period. It is as if everyone receives a full house when they have only contributed a brick. The same paper associates and elucidates the cost structure that should be kept in mind while evaluating free and proprietary software - A Direct Costs 1. Software and Hardware 1.1 Software (a) Purchase price (b) Upgrades and additions © Intellectual property/licensing fees 1.2 Hardware (a) Purchase price (b) Upgrades and additions 2. Support Costs 2.1 Internal (a) Installation and set-up (b) Maintenance © Troubleshooting (d) Support tools (e.g., books, publications) 2.2 External (a) Installation and set-up (b) Maintenance © Troubleshooting 3. Staffing Costs 3.1 Project management 3.2 Systems engineering/development 3.3 Systems administration (a) Vendor management 3.4 Other administration (a) Purchasing (b) Other 3.5 Training 4. De-installation and Disposal B. Indirect Costs 1. Support Costs 1.1 Peer support 1.2 Casual learning 1.3 Formal training 1.4 Application development 2. Downtime To this list there are also other indirect costs arising from the use of proprietary software which are related to administration of licensing requirements. These include the tracking of software usage (costs of creating and administering procedures and of acquiring software) and, in some cases, conducting software audits. This list does not appear to anticipate switching costs where a business is moving from one system to another (although these can be accounted for indirectly through headings such as “installation and set up” or “training”).

In the short term costs of proprietary systems may be lower than those of free software systems. Yet over a period of time free software holds and advantage for the following reasons :

* That while free software effectively provides code ownership, the main costs of adopting a proprietary software solution is actually costs of non-ownership.
* That the TCO advantages are both most pronounced and more certain for GPL free software licenses, which mandate free software license terms for the distribution of code modifications. Non-GPL free software poses a significant risk of proprietary forking in the future and therefore yields only a weak TCO result, although one likely to be better than that for proprietary software.
* That the source code sharing arrangements are no substitute for the code ownership provided by free software. The viral nature of proprietary software means that such sharing arrangements pose potentially serious risks to a user if not strictly managed.
* That making purchasing decisions on a 1, 2 or even 3 year window will have the effect of locking a purchaser into higher total cost of operations over the longer term. Purchasers must “face the situation” if they want to maximize real long-term savings and access them sooner. This will be particularly pronounced where major purchasers, such as government, delay entry into the free software market thereby inhibiting the development of ancillary markets for the support of free software.
* That strategic decisions in relation to the choice between free software and proprietary software should come down to one of evaluation of fit to functional requirements, with long run total cost of operations presumed to favor the free software. Fit to functional requirements can include such things as network externalities. As between free software variants GPL free software should be preferred to minimize long run TCO.
* That where there appears to be an ongoing market for the free software in question, the organization should consider whether any shortfall in functionality can be made good at a price equal to or less than the licensing costs of the equivalent proprietary suite. That said, without demand a free software solution is unlikely to have reached sufficient maturity to present as a viable alternative. Its mere presence can of itself be indicative of the existence of an ongoing market.

FreeBSD and Linux are dependable descendants of the UNIX operating system. They run very well on standard PC hardware, and are widely used by the Internet industry. For many network server tasks, such as email, web serving, and file serving, they not only represent the most economical solution, they also represent the most reliable solution. They are a popular choice in Industry and Universities. With the help of consultant, a fully functional network server can be implemented for many thousands less than if a conventional Novell or Windows-NT solution was used. While these operating systems are not much harder 15 than Windows to install on the desktop, the downside is that the server software such as web-servers difficult to configure. A consultant is recommended for all but the most adventurous. While it had traditionally been seen as a server or technical operating system, recent developments in graphical user interfaces and end user software make Unix a viable choice for the desktop, too. The fact was built from the ground up as a multi-user system makes Unix particularly suitable for school use, where the concept of a personal computer is actually a misnomer. The time is now ripe for FreeBSD and Linux to be seriously considered as desktop operating systems for schools.

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