March 1, 2004
Brave new world | Financial and business considerations drive Maine companies to switch to open source technology
By Rebecca Zicarelli
Allen Connors, general manager of the Bethel Inn & Country Club in Bethel, dreaded the computer hardware upgrades and licensing renewals he knew the inn needed this year. He was planning to spend $10,000-$15,000 on hardware and another $6,000 for the licenses on proprietary software from companies including Microsoft.
Connors says he realized the inn was barely treading water in an ocean of technology. The accounting system couldn't talk to the reservation system; hardware that still worked would become obsolete with the operating system upgrade; and those upgrades cost the inn thousands every year. None of it did anything to increase the inn's ability to do business. So why did Connors keep spending the money? "I didn't realize there was another alternative," he says.
In January, Connors found the alternative in an impromptu chat that led him to a new Bethel company called Deximer. Among other services, Deximer offers open source computer solutions based on the Linux operating system. By early February, the staff at Deximer had completed a technology review for the Bethel Inn, and Connors became a convert to open source, which derives its name from the fact that the coding underlying its programs is open to all developers ˆ unlike the source code for Microsoft products, which the company guards jealously. "The plan totally made sense to me," Connors says. "Once you buy into [Microsoft] technology, you're buying into a residual cost that never ends. We're hoping to eliminate that and improve the amenities we offer."
As a friend of Connors puts it, the inn is about to become "free from bondage" to the Microsoft butterfly. Instead, Connors is pledging his allegiance to the Linux penguin, which is increasingly being invited into businesses and nonprofits eager to find cost-effective and secure ways to manage their IT needs. Already, about a third of the servers in the United States run Linux. But the shift to open source desktops and business applications is happening more slowly, in part because the open source movement has yet to produce a desktop environment that has caught on like Windows.
But don't expect this deficiency to last, for open source has enormous potential to help businesses bring information together from a host of proprietary applications that can't communicate with one another. This is what IBM's recent blitzkrieg of Linux ads is all about. Called information or enterprise integration, it's become a major selling point for open source solutions. While the penguin may be getting his foot in the door because he's a cheap date, he may well be invited to stay because he can ease communication between the applications businesses depend on.
Jeremy Stark, one of the founders and technical gurus of Deximer, works toward that end. "We will install Linux wherever it makes sense, we'll keep Windows where appropriate, but our long-range goal is to eliminate proprietary software," says Stark. "Some applications haven't been developed as open source software yet ˆ and 'yet' is the operative word."
Still, it's important to remember that open source advocates frequently have evangelical tendencies, and don't necessarily prioritize the needs of a particular business. Stark says businesses can avoid the pitfalls by demanding an intelligent technology plan before deciding to convert to open source technology. "If it makes sense for the business, they should implement it," he says. "If they don't understand the plan and their service provider can't explain it and make it compelling, then they should look elsewhere."
The desktop problem
That's how Stark justified the conversion to Connors at the Bethel Inn. Instead of taking a one-way trip to the landfill, for example, the inn's existing computers will become smart terminals used to access applications like Open Office, the open source alternative to Microsoft Office, as well as the accounting system and a new reservations system, both of which will run on an upgraded local server.
Connors is overjoyed. Instead of spending the inn's tech support money on maintaining the Microsoft platform, he says the budget will be spent customizing technology to meet the inn's needs ˆ buying new wireless networking and telephone interfaces, as well as that reservations system, which will be integrated with the accounting system. "When we do capital improvements, we always look to see if there's any guest impact," Connors says. "With technology, typically the guests don't see that. This allows us to take the money that guests typically don't see and turn it into a 'wow' factor. Offering wireless Internet and voicemail at a traditional New England inn is unheard of."
For Miles Memorial Hospital in Damariscotta and St. Andrews Hospital in Boothbay Harbor, it wasn't hardware costs that drove the transition to open source technology a year ago ˆ it was the licensing fees for the hospitals' hundreds of users. "The big cost was the Microsoft Office suite," says Wayne Printy, CFO for both hospitals. "It was out of control for a nonprofit organization. It had many things that we didn't need." In analyzing the costs of switching, Printy says, "The final tipping point was doing away with the upgrade pricing."
The conversion itself is open source's greatest weakness, according to Printy. "In a fast-changing environment, having people step back from normal daily duties to learn something new can be a challenge," he says. Offering a lot of training and giving employees free CDs of Open Office to take home helped make the transition easier.
While the hospitals' conversion to open source software is extensive, Printy doesn't think it will ever be complete. "We may only get to 90%," he says. There are a number of spreadsheets the hospitals use that are too complex to switch. And crucial hospital management software, called Meditech, doesn't run on the Linux platform. Printy says he's also concerned with the open source desktop, where a single interface has yet to emerge that feels as comfortable to users as the ubiquitous Windows desktop.
That concern is echoed by Scott Lewis, one of four owners of Maine IT Solutions in Gardiner. Lewis is skeptical of open source's ability to meet the demands of small businesses that don't have IT staff, and questions the advisability of using Linux as a desktop for the typical non-techie end user. "In my opinion, [Linux] has zero place on the desktop, particularly if you don't have the appropriate support," Lewis says. "It's a server product, not a desktop product. There are only a couple of [applications] which are native to it, and they're not in the same league as Microsoft Office at all. [Linux] is a tool in a toolbox. As an IT guy, I've got to use the tools that make the most sense for my customers. Sometimes it's Linux, sometimes it's Microsoft, sometimes it's Novell ˆ except on the desktop. That's where an end user sits, and Windows is on their desktop for a reason."
Despite the drawbacks, Printy finds the economic incentive of open source technology difficult to resist. For the next part of the conversion, which begins in May, Printy will replace Microsoft Exchange 5.5, which runs on Microsoft NT4 ˆ Microsoft has stopped supporting both products ˆ with Novell/SUSE/Open Exchange, an open source product. According to Printy, upgrading with Microsoft products would cost the hospitals $27,191, which doesn't include tech support and only covers 300 users. The open source solution, Printy says, will only cost $1,695, doesn't require a hardware upgrade and comes with a year of support.
The open source grocery store
In November, the United Nations recommended that open source software be used for e-commerce and computer technology in developing countries. In "E-Commerce and Development Report 2003," the U.N. gives a number of reasons for the recommendation: open source software has better security; there are more people looking for defects so more defects are found and fixed quickly; government agencies and small businesses with limited budgets are freed from the upgrade marketing strategies of behemoths like Microsoft; and users can customize or improve applications because they have access to the source code.
For Maine businesses struggling to survive, open source may make as much sense as it does for businesses in developing countries. But there is a caveat: Open source means the source code is open and available; it does not mean that the software is free. While the Linux operating system and a number of applications including Open Office are available for free, many applications are developed for sale. In addition, switching to an open source environment may not eliminate the need to purchase software. Connors' plan for the Bethel Inn, for example, includes purchasing a reservation package with the money he'd originally intended to spend on new hardware.
Open source software doesn't mean that the software's not licensed. Instead, the software is distributed under licenses that grant a broad range of rights, but demand that credit for a piece of software be given to the programmer who wrote it. The licenses also allow another programmer ˆ either a staff member or a consultant ˆ to tailor the software to a user's needs, which leads to another caveat: A technician is required.
As Bill Homa, senior vice president of operations and CIO of Hannaford Bros. Co., the Scarborough-based grocery chain, puts it, "It would be hard for a very small business [to switch to open source] unless they have someone with experience to support it." He pauses, and then adds, "But if you have to go out and hire Microsoft expertise, you might as well hire Linux expertise."
Over the past few years, Homa has overseen Hannaford's use of open source technology to solve a problem with the scales in its meat departments, delis and checkout lines. The scales, which came from different vendors and run on a variety of proprietary software, were incompatible with one another; in addition, the software relicensing fees were expensive, though Homa declines to give specifics. He says managing the company's scales through a traditional, proprietary method would have meant replacing them with a product from a single vendor, a pricey solution that would limit any future purchases to that vendor's products.
Linux server installed in each store, connecting all the scales to company headquarters. When sirloin steak goes on sale, every scale in the chain knows the new price the moment the sale begins, no matter its make, model, age or operating system. "We replaced a proprietary system that ran on Windows and only supported one kind of scale, and bought a package that allows an open source solution," Homa says. Hannaford will continue to save because it'll be able to purchase scales based on price instead of software compatibility.
At the same time, the company is in the process of changing all its cash registers to a Linux-based solution, which eventually will reduce its annual IT costs by 20%. "Normally, you replace PCs every three years. You can't do that with point of sale [systems]," Homa says, due to their sheer numbers. "We wanted to get out of that cycle, and we needed something that has a longer life. With the Linux operating system, every new version doesn't obsolete your hardware. I won't have to buy hardware again until what we're running now physically wears out."
Homa's technology staff developed the POS application, which is currently running in 35 Hannaford stores and will be in all its stores by 2006. "It's ironic," Homa says. "Maine is often considered a backwater of technology and innovation, yet Hannaford has the most advanced POS in the world. [Open source] allows you to think differently. In a way, being behind lets you leapfrog over everybody else."
Connors says he realized the inn was barely treading water in an ocean of technology. The accounting system couldn't talk to the reservation system; hardware that still worked would become obsolete with the operating system upgrade; and those upgrades cost the inn thousands every year. None of it did anything to increase the inn's ability to do business. So why did Connors keep spending the money? "I didn't realize there was another alternative," he says.
In January, Connors found the alternative in an impromptu chat that led him to a new Bethel company called Deximer. Among other services, Deximer offers open source computer solutions based on the Linux operating system. By early February, the staff at Deximer had completed a technology review for the Bethel Inn, and Connors became a convert to open source, which derives its name from the fact that the coding underlying its programs is open to all developers ˆ unlike the source code for Microsoft products, which the company guards jealously. "The plan totally made sense to me," Connors says. "Once you buy into [Microsoft] technology, you're buying into a residual cost that never ends. We're hoping to eliminate that and improve the amenities we offer."
As a friend of Connors puts it, the inn is about to become "free from bondage" to the Microsoft butterfly. Instead, Connors is pledging his allegiance to the Linux penguin, which is increasingly being invited into businesses and nonprofits eager to find cost-effective and secure ways to manage their IT needs. Already, about a third of the servers in the United States run Linux. But the shift to open source desktops and business applications is happening more slowly, in part because the open source movement has yet to produce a desktop environment that has caught on like Windows.
But don't expect this deficiency to last, for open source has enormous potential to help businesses bring information together from a host of proprietary applications that can't communicate with one another. This is what IBM's recent blitzkrieg of Linux ads is all about. Called information or enterprise integration, it's become a major selling point for open source solutions. While the penguin may be getting his foot in the door because he's a cheap date, he may well be invited to stay because he can ease communication between the applications businesses depend on.
Jeremy Stark, one of the founders and technical gurus of Deximer, works toward that end. "We will install Linux wherever it makes sense, we'll keep Windows where appropriate, but our long-range goal is to eliminate proprietary software," says Stark. "Some applications haven't been developed as open source software yet ˆ and 'yet' is the operative word."
Still, it's important to remember that open source advocates frequently have evangelical tendencies, and don't necessarily prioritize the needs of a particular business. Stark says businesses can avoid the pitfalls by demanding an intelligent technology plan before deciding to convert to open source technology. "If it makes sense for the business, they should implement it," he says. "If they don't understand the plan and their service provider can't explain it and make it compelling, then they should look elsewhere."
The desktop problem
That's how Stark justified the conversion to Connors at the Bethel Inn. Instead of taking a one-way trip to the landfill, for example, the inn's existing computers will become smart terminals used to access applications like Open Office, the open source alternative to Microsoft Office, as well as the accounting system and a new reservations system, both of which will run on an upgraded local server.
Connors is overjoyed. Instead of spending the inn's tech support money on maintaining the Microsoft platform, he says the budget will be spent customizing technology to meet the inn's needs ˆ buying new wireless networking and telephone interfaces, as well as that reservations system, which will be integrated with the accounting system. "When we do capital improvements, we always look to see if there's any guest impact," Connors says. "With technology, typically the guests don't see that. This allows us to take the money that guests typically don't see and turn it into a 'wow' factor. Offering wireless Internet and voicemail at a traditional New England inn is unheard of."
For Miles Memorial Hospital in Damariscotta and St. Andrews Hospital in Boothbay Harbor, it wasn't hardware costs that drove the transition to open source technology a year ago ˆ it was the licensing fees for the hospitals' hundreds of users. "The big cost was the Microsoft Office suite," says Wayne Printy, CFO for both hospitals. "It was out of control for a nonprofit organization. It had many things that we didn't need." In analyzing the costs of switching, Printy says, "The final tipping point was doing away with the upgrade pricing."
The conversion itself is open source's greatest weakness, according to Printy. "In a fast-changing environment, having people step back from normal daily duties to learn something new can be a challenge," he says. Offering a lot of training and giving employees free CDs of Open Office to take home helped make the transition easier.
While the hospitals' conversion to open source software is extensive, Printy doesn't think it will ever be complete. "We may only get to 90%," he says. There are a number of spreadsheets the hospitals use that are too complex to switch. And crucial hospital management software, called Meditech, doesn't run on the Linux platform. Printy says he's also concerned with the open source desktop, where a single interface has yet to emerge that feels as comfortable to users as the ubiquitous Windows desktop.
That concern is echoed by Scott Lewis, one of four owners of Maine IT Solutions in Gardiner. Lewis is skeptical of open source's ability to meet the demands of small businesses that don't have IT staff, and questions the advisability of using Linux as a desktop for the typical non-techie end user. "In my opinion, [Linux] has zero place on the desktop, particularly if you don't have the appropriate support," Lewis says. "It's a server product, not a desktop product. There are only a couple of [applications] which are native to it, and they're not in the same league as Microsoft Office at all. [Linux] is a tool in a toolbox. As an IT guy, I've got to use the tools that make the most sense for my customers. Sometimes it's Linux, sometimes it's Microsoft, sometimes it's Novell ˆ except on the desktop. That's where an end user sits, and Windows is on their desktop for a reason."
Despite the drawbacks, Printy finds the economic incentive of open source technology difficult to resist. For the next part of the conversion, which begins in May, Printy will replace Microsoft Exchange 5.5, which runs on Microsoft NT4 ˆ Microsoft has stopped supporting both products ˆ with Novell/SUSE/Open Exchange, an open source product. According to Printy, upgrading with Microsoft products would cost the hospitals $27,191, which doesn't include tech support and only covers 300 users. The open source solution, Printy says, will only cost $1,695, doesn't require a hardware upgrade and comes with a year of support.
The open source grocery store
In November, the United Nations recommended that open source software be used for e-commerce and computer technology in developing countries. In "E-Commerce and Development Report 2003," the U.N. gives a number of reasons for the recommendation: open source software has better security; there are more people looking for defects so more defects are found and fixed quickly; government agencies and small businesses with limited budgets are freed from the upgrade marketing strategies of behemoths like Microsoft; and users can customize or improve applications because they have access to the source code.
For Maine businesses struggling to survive, open source may make as much sense as it does for businesses in developing countries. But there is a caveat: Open source means the source code is open and available; it does not mean that the software is free. While the Linux operating system and a number of applications including Open Office are available for free, many applications are developed for sale. In addition, switching to an open source environment may not eliminate the need to purchase software. Connors' plan for the Bethel Inn, for example, includes purchasing a reservation package with the money he'd originally intended to spend on new hardware.
Open source software doesn't mean that the software's not licensed. Instead, the software is distributed under licenses that grant a broad range of rights, but demand that credit for a piece of software be given to the programmer who wrote it. The licenses also allow another programmer ˆ either a staff member or a consultant ˆ to tailor the software to a user's needs, which leads to another caveat: A technician is required.
As Bill Homa, senior vice president of operations and CIO of Hannaford Bros. Co., the Scarborough-based grocery chain, puts it, "It would be hard for a very small business [to switch to open source] unless they have someone with experience to support it." He pauses, and then adds, "But if you have to go out and hire Microsoft expertise, you might as well hire Linux expertise."
Over the past few years, Homa has overseen Hannaford's use of open source technology to solve a problem with the scales in its meat departments, delis and checkout lines. The scales, which came from different vendors and run on a variety of proprietary software, were incompatible with one another; in addition, the software relicensing fees were expensive, though Homa declines to give specifics. He says managing the company's scales through a traditional, proprietary method would have meant replacing them with a product from a single vendor, a pricey solution that would limit any future purchases to that vendor's products.
Linux server installed in each store, connecting all the scales to company headquarters. When sirloin steak goes on sale, every scale in the chain knows the new price the moment the sale begins, no matter its make, model, age or operating system. "We replaced a proprietary system that ran on Windows and only supported one kind of scale, and bought a package that allows an open source solution," Homa says. Hannaford will continue to save because it'll be able to purchase scales based on price instead of software compatibility.
At the same time, the company is in the process of changing all its cash registers to a Linux-based solution, which eventually will reduce its annual IT costs by 20%. "Normally, you replace PCs every three years. You can't do that with point of sale [systems]," Homa says, due to their sheer numbers. "We wanted to get out of that cycle, and we needed something that has a longer life. With the Linux operating system, every new version doesn't obsolete your hardware. I won't have to buy hardware again until what we're running now physically wears out."
Homa's technology staff developed the POS application, which is currently running in 35 Hannaford stores and will be in all its stores by 2006. "It's ironic," Homa says. "Maine is often considered a backwater of technology and innovation, yet Hannaford has the most advanced POS in the world. [Open source] allows you to think differently. In a way, being behind lets you leapfrog over everybody else."
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