10.3 Why Open Source?

Learning Objectives

After studying this section you should be able to do the following:

  1. Know the primary reasons firms choose to use OSS.
  2. Understand how OSS can beneficially impact industry and government.

There are many reasons why firms choose open source products over commercial alternatives:

Cost—Free alternatives to costly commercial code can be a tremendous motivator, particularly since conventional software often requires customers to pay for every copy used and to pay more for software that runs on increasingly powerful hardware. Big Lots stores lowered costs by as much as $10 million by finding viable OSS (Castelluccio, 2008) to serve their system needs. Online broker E*TRADE estimates that its switch to open source helped save over $13 million a year (King, 2008). And Amazon claimed in SEC filings that the switch to open source was a key contributor to nearly $20 million in tech savings (Shankland, et. al., 2001). Firms like TiVo, which use OSS in their own products, eliminate a cost spent either developing their own operating system or licensing similar software from a vendor like Microsoft.

Reliability—There’s a saying in the open source community, “Given enough eyeballs, all bugs are shallow” (Raymond, 1999). What this means is that the more people who look at a program’s code, the greater the likelihood that an error will be caught and corrected. The open source community harnesses the power of legions of geeks who are constantly trawling OSS products, looking to squash bugs and improve product quality. And studies have shown that the quality of popular OSS products outperforms proprietary commercial competitors (Ljungberg, 2000). In one study, Carnegie Mellon University’s Cylab estimated the quality of Linux code to be less buggy than commercial alternatives by a factor of two hundred (Castelluccio, 2008)!

Security—OSS advocates also argue that by allowing “many eyes” to examine the code, the security vulnerabilities of open source products come to light more quickly and can be addressed with greater speed and reliability (Wheeler, 2003). High profile hacking contests have frequently demonstrated the strength of OSS products. In one well-publicized 2008 event, laptops running Windows and Macintosh were both hacked (the latter in just two minutes), while a laptop running Linux remained uncompromised (McMillan, 2008). Government agencies and the military often appreciate the opportunity to scrutinize open source efforts to verify system integrity (a particularly sensitive issue among foreign governments leery of legislation like the USA PATRIOT Act of 2001) (Lohr, 2003). Many OSS vendors offer security focused (sometimes called hardened) versions of their products. These can include systems that monitor the integrity of an OSS distribution, checking file size and other indicators to be sure that code has not been modified and redistributed by bad guys who’ve added a back door, malicious routines, or other vulnerabilities.

Scalability—Many major OSS efforts can run on everything from cheap commodity hardware to high-end supercomputing. Scalability allows a firm to scale from start-up to blue chip without having to significantly rewrite their code, potentially saving big on software development costs. Not only can many forms of OSS be migrated to more powerful hardware, packages like Linux have also been optimized to balance a server’s workload among a large number of machines working in tandem. Brokerage firm E*TRADE claims that usage spikes following 2008 U.S. Federal Reserve moves flooded the firm’s systems, creating the highest utilization levels in five years. But E*TRADE credits its scalable open source systems for maintaining performance while competitors’ systems struggled (King, 2008).

Agility and Time to Market—Vendors who use OSS as part of product offerings may be able to skip whole segments of the software development process, allowing new products to reach the market faster than if the entire software system had to be developed from scratch, in-house. Motorola has claimed that customizing products built on OSS has helped speed time-to-market for the firm’s mobile phones, while the team behind the Zimbra e-mail and calendar effort built their first product in just a few months by using some forty blocks of free code (Guth, 2006).

Key Takeaways

  • The most widely cited benefits of using OSS include low cost; increased reliability; improved security and auditing; system scalability; and helping a firm improve its time to market.
  • Free OSS has resulted in cost savings for many large companies in several industries.
  • OSS often has fewer bugs than its commercial counterparts due to the large number of persons who have looked at the code.
  • The huge exposure to scrutiny by developers and other people helps to strengthen the security of OSS.
  • “Hardened” versions of OSS products often include systems that monitor the integrity of an OSS distribution, checking file size and other indicators to be sure that code has not been modified and redistributed by bad guys who have added a back door, malicious routines, or other vulnerabilities.
  • OSS can be easily migrated to more powerful computers as circumstances dictate, and also can balance workload by distributing work over a number of machines.
  • Vendors who use OSS as part of product offerings may be able to skip whole segments of the software development process, allowing new products to reach the market faster.

Questions and Exercises

  1. What advantages does OSS offer TiVo? What alternatives to OSS might the firm consider and why do you suppose the firm decided on OSS?
  2. What’s meant by the phrase, “Given enough eyeballs, all bugs are shallow”? Provide evidence that the insight behind this phrase is an accurate one.
  3. How has OSS benefited E*TRADE? Amazon? Motorola? Zimbra? What benefits were achieved in each of these examples?
  4. Describe how OSS provides a firm with scalability. What does this mean, and why does this appeal to a firm? What issues might a firm face if chosen systems aren’t scalable?
  5. The Web site NetCraft (http://www.netcraft.com) is one of many that provide a tool to see the kind of operating system and Web server software that a given site is running. Visit NetCraft or a similar site and enter the address of some of your favorite Web sites. How many run open source products (e.g., the Linux OS or Apache Web server)? Do some sites show their software as “unknown”? Why might a site be reluctant to broadcast the kind of software that it uses?


Castelluccio, M., “Enterprise Open Source Adoption,” Strategic Finance, November 2008.

Guth, R., “Virtual Piecework: Trolling the Web for Free Labor, Software Upstarts Are a New Force,” Wall Street Journal, November 13, 2006.

King, R., “Cost-Conscious Companies Turn to Open-Source Software,” BusinessWeek, December 1, 2008.

Ljungberg, J., “Open Source Movements as a Model for Organizing,” European Journal of Information Systems 9, no. 4 (December 2000): 208–16.

Lohr, S., “Microsoft to Give Governments Access to Code,” New York Times, January 15, 2003.

McMillan, R., “Gone in Two Minutes,” InfoWorld, March 27, 2008.

Raymond, E., The Cathedral and the Bazaar: Musings on Linux and Open Source by an Accidental Revolutionary (Sebastopol, CA: O’Reilly, 1999).

Shankland, S., M. Kane, and R. Lemos, “How Linux Saved Amazon Millions,” CNET, October 30, 2001.

Wheeler, D., Secure Programming for Linux and Unix, 2003, http://www.dwheeler.com/secure-programs/Secure-Programs-HOWTO/index.html.

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