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I have an acquaintance that works for CNN.
He cited the costs as the major reason they
switched to Linux for their web servers. It
was a significant savings.
What I was pointing out is that software
costs while significant, are only a part
of the cost. Acquiring maintaining and
upgrading the hardware is also significant,
thus the outsourcing to hosting systems.
Outsourcing is another one of those cyclic
events. It makes sense in some economic
downturns to outsource, and not in others.
I don't think it will hurt Microsoft. It
will force them to rethink some of their
tactics, and when you are cash rich, you
have time to think. Who really takes a
clobbering? the nails on the blackboard,
razors-edge profit margin companies. In
these, open source can save them; unless
of course, someone builds an open source
version of their product.
Sometimes the trend reverses: freeware
becomes cheapware. An example: I discovered
the CoolEdit2000 software package for
mastering my digital recordings at home.
Originally, it was a dorky DOS-based
FFT editor. Today, it is a plug-in
compatible bundle of two-track digital
editing tools that are simply killer.
It is marvelous. $69 of software replaces
25 to 35k worth of hardware, a 3 to 5 hundred
dollar trip to a mastering company, and so
on. The independent CD manufacturers now
have to practically give away their mastering
services and rely on the print and package
income. Mastering-only labs have to be
very reputable and capable of miracles to
stay in business (you hire them for their
golden ears, not their gear). Others just
go belly up.
Note, that CoolEdit was once freeware but
given the costs is now cheapware. I think
we see trends in both directions. Even
where I can do the CD inserts and CD labels
at home, if I need a volume of them (say
> 200), it is still cheaper to go to the
independent manufacturer who can afford
a small run (< 1000) and make money.
Another example is the Guitar-Pro tablature
editor. It started out as a trainer package
for guitar players learning to play by reading
guitar tablature. It has evolved into a
very fine multitrack midi bed arrangement package for
guitar composers. Every release has included
new features that I would have killed for when
I was at college taking composition and guitar
performance courses.
It's price has remained constant over all the
years I've used it, and the new versions are
kept at half the cost for previous customers.
Very nice interface, vigilant attention to what
the customers ask for, and very consistent pricing.
Good strategy. Because of the ease of use, familiarity
and so on, open source would have to be orders
of magnitude better in features to get me to
switch because the cost is trivial next to
the advantages of sticking with the product.
What happens is that new niches are created,
and can be profitable. However, staying on
the shelf without falling requires a very
consistent approach to the customers.
len
-----Original Message-----
From: Shawn Parker [mailto:sparker@socket.net]
Not only that, but US companies are beginning to make the transition to
open-source and alternatives to Windows due to the economic crunch.
Here in Missouri, the economic status is dismal. Our company is looking
to go completely Linux by 05, as are many educational systems due to
budget cuts. Government offices are also evaluating the switch.
Being able to shell out tens of thousands of dollars for software and
servers isn't realistic right now, nor do I think it ever will be here
again.
I'm not anti-Microsoft. I like some of their tools, and there are
suites of authorware (like Flash) that I enjoy using on Windows. But,
they need to think more realistically about licensing and software
distribution.
Open-source is a viable solution for small market business. And, I
think that will hurt Microsoft in the long run.
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