Navigating the Economic Downturn: Strategies for Cutting Costs with Open Source Webinar on Oct 29, 2008 Presented by Kim Weins and Rod Cope of OpenLogic Recording available at: www. openlogic . com/downloads/webinars . php

Agenda How Open Source Can Help You Cut Costs Calculating Open Source Savings Open Source Migration Opportunities

How Open Source Can Help You Cut Costs

Calculating Open Source Savings

Open Source Migration Opportunities

About OpenLogic OpenLogic enables enterprises to safely and securely acquire, manage and control open source software, and thereby realize significantly higher savings . OpenLogic Company Confidential

OpenLogic enables enterprises to

safely and securely

acquire, manage and control

open source software,

and thereby

realize significantly higher savings .

Aggregating Open Source for the Enterprise One throat to choke Consolidated SLA support Support Provisioning Governance Risk reduction Indemnification SaaS Governance platform Trusted source Certified library of 460+ projects Managed updates

One throat to choke

Consolidated SLA support

Risk reduction

Indemnification

SaaS Governance platform

Trusted source

Certified library of 460+ projects

Managed updates

Polling Results from Webinar Attendees Are you seeing pressure on your IT budgets from the economic downturn?

Are you seeing pressure on your IT budgets from the economic downturn?

What the State of the Economy Means to IT 61% of CIOs are currently re-evaluating their 2009 budgets 59% percent are trying to save money by renegotiating contracts with their vendors 59% are putting all nonessential projects on hold 49% are cutting the amount they spend on consultants and have restricted travel 25% are freezing IT hiring Source: CIO Executive Board Survey, Sept 2008

61% of CIOs are currently re-evaluating their 2009 budgets

59% percent are trying to save money by renegotiating contracts with their vendors

59% are putting all nonessential projects on hold

49% are cutting the amount they spend on consultants and have restricted travel

25% are freezing IT hiring

Source: CIO Executive Board Survey, Sept 2008

What the State of the Economy Means to IT "The next big thing in IT is not a technology—it is cost reduction, risk management and compliance," Peter Sondergaard, SVP Research, Gartner.

Polling Results from Webinar Attendees Will your company use more open source because of economic uncertainty?

Will your company use more open source because of economic uncertainty?

How Open Source Can Help You Cut Costs Cut Licensing Costs Zero (or near zero) Reduce Support & Maintenance Costs A competitive market means support for open source typically costs less than support for proprietary products; Reduce Development Costs Avoid reinventing the wheel; leverage the community

Cut Licensing Costs

Zero (or near zero)

Reduce Support & Maintenance Costs

A competitive market means support for open source typically costs less than support for proprietary products;

Reduce Development Costs

Avoid reinventing the wheel; leverage the community

How OpenLogic Can Help You Cut Costs Commercial OSS Support at Low Cost Significantly lower cost than proprietary alternatives Aggregate open source support for cost savings Low Cost Services to Accelerate Use of Open Source 1 to 5 day engagements for Policy Creation, OSS Selection, Training, Migration and Tuning Mitigate Concerns that Limit the Use of OSS Commercial support for almost 500 open source projects Indemnification Governance solutions

Commercial OSS Support at Low Cost

Significantly lower cost than proprietary alternatives

Aggregate open source support for cost savings

Low Cost Services to Accelerate Use of Open Source

1 to 5 day engagements for Policy Creation, OSS Selection, Training, Migration and Tuning

Mitigate Concerns that Limit the Use of OSS

Commercial support for almost 500 open source projects

Indemnification

Governance solutions

Polling Results from Webinar Attendees Have you recently replaced any commercial proprietary software with open source because of economic uncertainty?

Have you recently replaced any commercial proprietary software with open source because of economic uncertainty?

Case Study: Cost Savings with OSS Proprietary Alternative License cost of $1.7M per year to start Expected cost to rise to $10M per year OSS Alternative Free to start Able to prototype solution in a matter of days Costs for subscription and support <10% of proprietary alternative

Proprietary Alternative

License cost of $1.7M per year to start

Expected cost to rise to $10M per year

OSS Alternative

Free to start

Able to prototype solution in a matter of days

Costs for subscription and support <10% of proprietary alternative

Case Study: Cost Savings with OpenLogic Existing OSS Vendor Support costs of $300K+ /year for one open source product Less than 5 support tickets per year OpenLogic Alternative Significantly reduce costs Aggregate support for hundreds of open source projects Enable development teams to use more open source

Existing OSS Vendor

Support costs of $300K+ /year for one open source product

Less than 5 support tickets per year

OpenLogic Alternative

Significantly reduce costs

Aggregate support for hundreds of open source projects

Enable development teams to use more open source

How to Calculate Open Source Savings

Polling Results from Webinar Attendees Do you think replacing commercial proprietary systems with open source could save your company money?

Do you think replacing commercial proprietary systems with open source could save your company money?

Increase Cost Savings with OpenLogic

Cost Considerations for Open Source Hard Costs Soft Costs Costs to find, evaluate and certify open source. Tip: Create a central repository of certified open source Sourcing Costs to support open source Tip: Shop around, open source support is a competitive market Support Zero cost (typically) Tip: There are some commercial OSS companies that do charge a license fee for “enterprise” editions. Licensing Costs to manage open source in production Tip: Commercial support contracts can reduce these costs IT Services Costs to review open source licenses and requests to use OSS Tip: Automate governance processes & maintain an audit trail Compliance & Legal Open Source Cost Considerations Areas

Example: Hard Cost Savings with Open Source Assumes: DB, App Server and Web Server (12 CPUs each) SOA Suite (8 CPUs) and BI Suite (4 CPUs) 88% $450,000 $3,712,800 Hard Cost Total 77% $450,000 $1,944,800 Support (5 yrs) 100% - $1,768,000 Licensing Commercial Proprietary Use OSS with OpenLogic Savings Commercial vs OL Costs

Four Actions You Can Take Now Gartner Get the best pricing and terms for your IT purchases Identify major cost-saving opportunities Implement cost-savings technologies Implement cost-saving process improvement Open Source Shop for Open Source Support OpenLogic supports 460+ OSS packages Identify Opportunities to use OSS OSS Opportunities Workshops OSS Selection Workshops Implement Open Source where appropriate Migration Planning Remove Roadblocks to OSS Usage OSS Policy Workshop OSS Governance Solutions

Gartner

Get the best pricing and terms for your IT purchases

Identify major cost-saving opportunities

Implement cost-savings technologies

Implement cost-saving process improvement

Open Source

Shop for Open Source Support

OpenLogic supports 460+ OSS packages

Identify Opportunities to use OSS

OSS Opportunities Workshops

OSS Selection Workshops

Implement Open Source where appropriate

Migration Planning

Remove Roadblocks to OSS Usage

OSS Policy Workshop

OSS Governance Solutions

Polling Results from Webinar Attendees Other than the operating system, what types of software would you like to replace with open source to lower costs?

Other than the operating system, what types of software would you like to replace with open source to lower costs?

Open Source Migration Opportunities

Questions about moving to Open Source What are the differences between proprietary and open source from an implementation point of view? How do I know if my particular situation is compatible with the change? Which types of applications should I migrate first and why?

What are the differences between proprietary and open source from an implementation point of view?

How do I know if my particular situation is compatible with the change?

Which types of applications should I migrate first and why?

Proprietary vs. Open Source: Implementation Pros Easy to know where to get support Usually well-integrated with other products from same vendor Cons Slow to respond to customer requests and adopt new standards Support quality sometimes lacking Security only tested in-house Proprietary extensions may create lock-in Pros Quick to respond to popular requests / can modify yourself Flexible, focus on industry standards Security tested publicly Cons Hard to find support on hundreds of packages * Effort required to monitor package updates & security vulnerabilities * Documentation may be more limited Proprietary Open Source * Provided by OpenLogic

Pros

Easy to know where to get support

Usually well-integrated with other products from same vendor

Cons

Slow to respond to customer requests and adopt new standards

Support quality sometimes lacking

Security only tested in-house

Proprietary extensions may create lock-in

Pros

Quick to respond to popular requests / can modify yourself

Flexible, focus on industry standards

Security tested publicly

Cons

Hard to find support on hundreds of packages *

Effort required to monitor package updates & security vulnerabilities *

Documentation may be more limited

Quick Hits for Open Source Migration Migration opportunities Expensive proprietary licensing and maintenance costs Standards-based technologies Departmental or non-mission-critical deployments Green field opportunities Open to solutions beyond incumbent vendors Integration with legacy systems is initially minimal

Migration opportunities

Expensive proprietary licensing and maintenance costs

Standards-based technologies

Departmental or non-mission-critical deployments

Green field opportunities

Open to solutions beyond incumbent vendors

Integration with legacy systems is initially minimal

Proprietary vs. Open Source: 4 Key Categories Application Server Database SOA/ESB BI/Reporting WebSphere WebLogic Oracle DB2 Sybase WebSphere ESB TIBCO Sonic Fiorano iWay Business Objects/Crystal Actuate IBM/Cognos JBoss Tomcat Glassfish Geronimo MySQL PostgreSQL HSQLDB ServiceMix JBoss ESB CXF ActiveMQ Mule Jasper Reports Pentaho Mondrian Weka

Application Server WebSphere, WebLogic Commercial Start with departmental apps, minimal integration with proprietary systems Quick Hits JBoss, Tomcat, Glassfish, Geronimo Open Source Alternatives Medium, depends on features used Ease of Migration Java Enterprise Edition (JEE) Standards

Database Oracle, DB2, Sybase Commercial Evaluate on case-by-case basis, starting with simple applications Quick Hits MySQL, PostgreSQL, HSQLDB Open Source Alternatives Easy to Difficult, depending on usage ORM makes it easier (e.g., Hibernate) Database-specific extension usage makes it harder (e.g., stored procedures, warehousing extensions) Ease of Migration SQL Standards

Easy to Difficult, depending on usage

ORM makes it easier (e.g., Hibernate)

Database-specific extension usage makes it harder (e.g., stored procedures, warehousing extensions)

SOA and ESB WebSphere ESB, TIBCO, Sonic, Fiorano Commercial Possible to integrate local SOA/ESB tools with central ESB; New projects Quick Hits ServiceMix, JBoss ESB, CXF, ActiveMQ, Mule Open Source Alternatives Medium, depends on use of proprietary extensions, routing, plug-ins, etc. Ease of Migration JMS, SOAP, SMTP, FTP, HTTP, BPEL, many others Standards

Business Intelligence and Reporting Business Objects/Crystal, IBM/Cognos, Actuate Commercial Start with open source reporting for department or division Quick Hits Jasper Reports, Pentaho, Mondrian, Weka Open Source Alternatives Difficult if reports must be rewritten Ease of Migration SQL, no standard for report design Standards

Conclusion Start with low-hanging fruit Non-mission-critical Departmental apps Primarily using standard features, not vendor-specific add-ons No need for deep integration with legacy systems Gain experience with OSS tools, support vendors Trusted partners experienced with OSS can ease the transition Expand on your success Establish a beachhead, demonstrate savings, grow from there Don't try to boil the ocean

Start with low-hanging fruit

Non-mission-critical

Departmental apps

Primarily using standard features, not vendor-specific add-ons

No need for deep integration with legacy systems

Gain experience with OSS tools, support vendors

Trusted partners experienced with OSS can ease the transition

Expand on your success

Establish a beachhead, demonstrate savings, grow from there

Don't try to boil the ocean

Contact Information Contact OpenLogic: www.openlogic.com Get recording of webinar: www.openlogic.com/downloads/webinars.php Get a quote on support: www. openlogic .com/products/support. php Get a quote on governance solutions: www.openlogic.com/solutions/governance.php Get a quote on professional services: www.openlogic.com/products/professional-services.php

Contact OpenLogic:

www.openlogic.com

Get recording of webinar:

www.openlogic.com/downloads/webinars.php

Get a quote on support:

www. openlogic .com/products/support. php

Get a quote on governance solutions: www.openlogic.com/solutions/governance.php

Get a quote on professional services: www.openlogic.com/products/professional-services.php