A while ago Roy Russo had made a comment to the effect: “OSS needs to stop competing on price”. Regardless what you read about him on the Interweb, I say, he’s a smart guy! ;-)
I’ve never really looked at the price of Windows vs. RHEL or Ubuntu. The simple answer is that CentOS/Fedora (near RHEL replacements) and Ubuntu are free without commercial support, so end of discussion.
But, if you want commercial support and consider a typical Windows replacement cycle (~5 years), it seems that Windows is actually cheaper than purchasing RHEL+support or support for Ubuntu.
I’m quite happy to see this. Price isn’t a long term differentiator. Easier to use, faster, more secure, more reliable, etc. can be long term differentiators….price, not so much.
Take a look:
Here’s what I did:
The current Vista Ultimate price is $399, the upgrade price is $199. I used $399 in year 1 and $199 in year 6. This assumes you buy Vista today, run it for 5 years and then upgrade to the next version of Windows in year 6. You can pay $59/incident for commercial support from Microsoft. I assumed one would need no more than 2 support calls a year (I haven’t ever called MSFT in 20+ years for support). BTW, apparently you get 2 installation related support incidents for free with a Windows license. {Update} Mr. Russo pointed out that I missed the cost of an Advanced Support Incident. If you assume that a customer has 2 of these in a 6 year term, and when they do, the incremental cost is only $200, then Windows is still cheaper by ~$30 (ignoring discounts, hardware costs, other software costs, etc).
The current Ubuntu support price from Canonical for 9×5 phone support is $250. I could have used $900 for the 24×7 support, but that seemed excessive.
The current RHEL “Workstation with Standard Subscription” price for 12×5 phone support is $299.
Note that Canonical and Red Hat offer unlimited incidents, while I only assumed 2 incidents per year with Microsoft. This may be a bad assumption. But seriously, I can’t remember anyone I know actually calling Microsoft for OS support.
This ‘analysis’ is not a statement about total cost of ownership. It’s just simple math, and I thought you may find it interesting. OSS doesn’t have to compete on price…let’s move past that myth.
01.23.08 at 3:32 pm
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01.23.08 at 4:26 pm
Oh Savio, I’m still not convinced your Canadian business degree is worth what you’re paying…
You do realize that MS “Advanced Issues” cost you $259, right? And thats PER ISSUE during normal office hours: http://support.microsoft.com/gp/Advancedef
So work your little tables with those numbers, and you may have a like comparison.
I do like the post, however as it expands (and somewhat twists) my original point… OSS should not compete on price.
01.24.08 at 12:25 am
Savio, thank you for interesting post, 100% agree w/ the idea of selecting the right differentiators to compete.
Still regarding price comparation make sence to consider (MS Vista + Office 2007) bundle price. OpenOffice support is a standard part of Canonical support offer.
01.24.08 at 10:09 am
Roy
lol – my reading abilities should be attributed to the Indian education system, so there! ;-)
Sorry dude, I totally missed the Advanced Support Incident pricing. But really, even with 2 Advanced Support Incidents in a 5 year period, that is an extra $518…so supported Ubuntu would be cheaper by $88, but RHEL wouldn’t…although, one can imagine that if you pay for the $259 level of Microsoft support, you don’t need the $59 support incident, so now, the incremental cost would be $400, which would put the Canonical price at $30 above over the 6 year period.
Shamed and somewhat Vindicated? ;-)
01.24.08 at 10:12 am
Vladimir, great point about OO and MS Office.
I’m just glad to see that the price of RHEL or supported Ubuntu isn’t 10% of Windows or something like that. So, even if OSS is comparably priced or a little less, I think that’s okay….I just don’t agree with lowering the price of OSS products/support to ridiculous rates in order to compete.
Price is a terrible differentiator….if you ask me ;-)
01.25.08 at 10:13 am
Get ready for servers – Microsoft Level 0 Essential Support is $8299 per year and includes 10 hours of proactive support and 15 hours of 24×7 problem resolution. In the server market, canonicals $2750/year and redhat’s 1299/year for 24×7 unlimited support sounds a lot better.
01.25.08 at 11:48 am
You should include novell’s pricing too. I think a SLED workstation is like $50/yr and SLES is maybe $350? (This is from memory, forgive me if I’m way off).
I think you’re right; after all, FOSS is not so much about giving stuff away, it’s about moving the business model from product to service — even Stallman says this in “Why software should be free”.
Even so, I rankle at the assumption that service agreements are an assumed cost for Linux. Like you said, you can’t remember ever calling MS for support. I’m the same way. I’ve only ever called Novell for support on our SUSE servers once, and I came away feeling distinctly like I knew more than the guy I was talking to. Most IT departments aren’t worried about “vendor support” for Windows, they just hire MCSE’s and expect them to know how to deal with the beast. Why should it be different for Linux? If you want to use Red Hat or Debian in your business, hire a qualified Linux admin and expect him to know his stuff.
01.25.08 at 1:06 pm
Strict price comparisons for service and support are pretty meaningless without some comparison of what it is that is purchased. I can’t tell you the effectiveness of the support provided by the various vendors. I can tell you that the IT industry is notorious for having wide variation in support quality.
(I can also tell you that I get better support for Linux, at no cost at all, than I’ve paid for with many commercial products. But that’s no reflection on what you get if you do decide to pay. Or maybe it is. Presumably the support people pay for is indeed better than the free support that’s available.)
01.25.08 at 6:43 pm
1. Linux is a server/workstation combo. So, first mistake is comparing the “price” of any Linux to Windows XP/Vista, you need to compare it to Windows Server Enterprise ONLY in order to be an accurate matchup. You’ll pay $3500+ for Windows Enterprise with 25 CALs. Also, realize that there is no CAL fee with Linux. So if we assume 100 people can use a Linux server on a network… well I’ll let you do the math (it’s VERY expensive to use Windows).
2. Even if we do GREATLY limit ourselves to just WinXP/Vista as a comparison, to add the sheer amount of software that comes for free with a Linux distribution will easily add $3000-4000 to your initial price tag.
So… be careful about believing Microsoft’s TCO marketing blurbs. They are slanted and just plain wrong… and so is your analysis here.
12.15.08 at 4:55 pm
At the end of the day no decent sized organisation pays sticker price for support, that is why salespeople and account managers exist :-)
Also keep in mind that a business does not have to buy licenses or support for all Ubuntu instances. The software itself is free and many systems are not undertaking business critical tasks. As a consequence an I.T. department may feel that the level of support they can provide (with support from the community/Google) is adequate for a subset of installations.
Unfortunately what the industry lacks is a series of independent (i.e. non-biased) case studies that examine how different sized businesses approach support for different operating systems. Because whilst debating theoretical TCO over spreadsheets may seem like an easy thing to do, in practice it is far more complicated.
P.S. If any business is prepared to pay $750+ per year for unlimited support they will be raising far more than two support calls per year.
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