Cover Story

SMBs take to Open Source

Lower acquisition costs combined with the ability to tweak the source code are among the reasons why SMBs are porting their core enterprise applications on to Open Source platforms, says Abhinav Singh

What prompts SMBs to run their core enterprise applications on Open Source platforms? Express Computer spoke to companies which are doing it and this is what they had to say.

DCM Engineering, which has a turnover of Rs 245 crore, is running its core application mySAP Enterprise Version 5.0 on Red Hat Enterprise Linux. Explains Rakesh Dhamani, DCM’s Chief Financial Officer and Company Secretary: “We wanted a very robust and stable platform for mySAP that did not escalate our TCO in the long run. The amount of administrative effort which goes into maintaining the ERP solution on an Open Source platform is much lower compared to running proprietary software.”

"Linux gives me the flexibility to keep on adding users without altering the OS and upgrading it is easy" - Chetan Shah System Administrator Venus Jewel

Mumbai-based Venus Jewel, a diamond manufacturer and exporter, is running Oracle Application 10g Release 2 on Red Hat Enterprise Linux 4.1 on HP’s DL385 server. The front-end application (Oracle Application) is used to search stocks, and check inventory and invoices. The criticality of the application, which runs on Linux, can be gauged from the fact that the business of the company depends on the front-end application which requires a stable and a robust operating system (OS). Notes Chetan Shah, System Administrator at Venus: “Linux gives me the flexibility to keep on adding users without altering the OS…and upgrading it is easy.” Other SMBs making an attempt to port their enterprise applications to Open Source platforms are Chloroplast and Nediyara Extrusions, both in Kerala. They have begun the deployment of a customer relationship management (CRM) solution from a company called CRM24X7. Even SBI Life Insurance is using WebLogic Portal (of BEA systems) on Linux in addition to Windows.

"SMBs are open to experiment with Open Source platforms and are likely to consider them to run their core applications" - R Ray Wang Senior Analyst Enterprise Applications, Forrester

In the past CIOs were hesitant when it came to porting enterprise applications on to Open Source platforms due to the lack of support for it. Today things have changed, as R Ray Wang, Senior Analyst, Enterprise Applications, Forrester Research points out: “SMBs are open to experiment with Open Source platforms and are very likely to consider them to run their core applications. However, the lack of standardised support to maintain, upgrade and customise these applications remains a big barrier.”

Less than half the cost

SMBs are price-conscious, and are in desperate need of enterprise applications where the cost does not escalate as they scale up. Comments Mohamed Ali, President and Chief Executive Officer of CRM24X7, “SMBs are discouraged by factors such as the cost of licencing (OS, databases, app servers and reporting tools), and since Open Source safeguards against forced future hardware investment, they prefer to go in for Open Source platforms.” It is also a fact that many SMBs want to avoid the annual maintenance cost on OS licencing which they will have to incur in case they go in for a proprietary OS to run their enterprise applications. Shah gets down to the specifics: “The cost of a Linux-based server is around 50 percent lower. I can get a Linux-based server for as low as Rs 4 lakh, but if I were to use a Unix-based server the same configuration would have cost me Rs 9 lakh.”

The doubts on the part of Indian companies with regard to running enterprise applications on Open Source platforms have been done away with. Declares Dhamani: “To begin with we were hesitant because there were few companies in India which had ported their enterprise applications on Linux, and there were hardly any references for us to look forward to before running our core enterprise application on Linux. But now that support mechanisms are available and many more SMBs have adopted Open Source platforms, there is an air of confidence and more companies are expected to take this route.”

Performance & scalability

Business confidence in the SMB market is at a high, and so they naturally want to go with a system which is high on performance and scalability. Venus Jewel is getting five times more performance when compared to the Unix-based server as its users are able to access/view around 100 listings (listings present in a page) per second on a Linux-based server. On a Unix server it was getting only 20-30 listings per second. The company is now migrating its Oracle 9i database from a Unix box to a Linux server. Explains Pallab Talukdar, Director, Enterprise Marketing and Alliance, Technology Solutions Group, Hewlett-Packard India Sales: “Scalability can be an issue in a proprietary environment. An open platform gives the ability to achieve scalability at a lower cost. The number of users and CPUs does not affect the Open Source platform, but in the case of proprietary systems the licencing cost depends on the number of users and CPUs. SMB customers are willing to invest, but are not willing to get locked in a proprietary technology. Besides this, systems overheads are also low in the case of an open platform.”

There is also a strong belief that SMBs want to customise their enterprise applications, which is easy to do on an Open Source platform. Elaborates Wang, “SMBs are showing interest in enterprise apps on Open Source because there is a desire to customise these applications to their specific industry, and reduce overall maintenance commitments and involvement in a user group community within the same industry. They feel this may be cheaper in the long run.”

Many have observed that Open Source platforms such as Linux are more secure, and the amount of maintenance required is comparatively less. Listen to Dhruv Singhal, Head, Professional Services, BEA India: “Nowadays a lot of options are available for customers to port their enterprise applications on to Open Source platforms as many vendors are providing support for the same. There is also a lot of flexibility in handling the load if the enterprise apps are ported on to the Open Source platforms.”

More on the way

There are many confidence-building measures now to help SMBs port their enterprise apps on to Open Source. HP for instance has plans to start an open reference architecture lab on Linux in Bangalore; this will help its customers to test and port their enterprise applications on Linux. The company is in talks with more than one independent software vendor (ISV) so that the lab can become a reality soon. Says Talukdar, “The lab will help our customers to come forward and port their core and critical enterprise applications on Linux.” HP is also working with a lot of its partners to create a reference architecture on Linux. As part of this initiative the company is developing reference architecture for Linux for an ISV which is working on developing a healthcare ERP.