Competitiveness of open source software

Mike Hengge

- October 14, 2024

Software is a central component of the modern business world and forms the backbone of numerous company processes. It enables the automation of workflows, the efficient management of data and the optimization of customer communication. Suitable software solutions are essential in order to remain competitive and adapt to dynamic markets.

In this context, open source software is becoming increasingly important. It not only offers cost-effective alternatives to proprietary solutions, but also promotes innovation and collaboration through access to a global developer community. This development enables companies to develop customized software solutions while benefiting from the latest technological advances, making them more agile and adaptable. This article provides insight into the current capability of OSS for enterprise use compared to proprietary (closed source) software.

What is open source software?

Open source software refers to software whose source code is publicly accessible. This makes it possible for anyone to study, modify and distribute the software. In some variants of the numerous open source licenses, however, commercial use is not permitted free of charge. In contrast, the term FLOSS (Free/Libre and Open Source Software) is used to describe software that is both open and completely free. FLOSS emphasizes the freedom of users to adapt the software to their needs, so the term “free” refers not only to the price, but also to the freedom of use.

Well-known examples

Advantages of open source software

  • Cost savings: Open source software is often available free of charge, which is particularly attractive for companies. A more detailed cost analysis follows later in this article.

  • Flexibility and adaptability: Companies can adapt the source code to meet specific requirements. This enables customized solutions and promotes the development of projects.

  • Security: Open source software can be reviewed by many developers, which makes potential security vulnerabilities easier to identify.

  • Active community: Many open source projects have a committed community that is constantly working on improvements. This ensures rapid updates and an active exchange of ideas.

Disadvantages of open source software

  • Support and maintenance: Active and helpful communities, but usually no professional support as with commercial software providers.

  • Complexity: Customization and implementation of open source software can be complex for less experienced administrators.

  • Compatibility: Open source software often offers less integration with proprietary systems and requires individual connections.

However, these disadvantages do not apply if a specialized expert in dealing with open source fills precisely these gaps.

However, these disadvantages do not apply if a specialized expert in dealing with open source fills precisely these gaps.

Request a non-binding consultation now!

Cost analysis

Closed Source Open Source FLOSS
Short-term costs
Acquisition costs €€€ € -
Installation - € €
Maintenance and support €€€ €€ €
Training €€ €€ €€
Long-term costs
Licenses €€€ € -
Updates/Upgrades €€ € -
Hosting - € €
Migration €€€ € €
Customizations €€€ € €
Total €€€ €€ €

1. Closed Source Software

Short-term costs:

  • Often high acquisition costs
  • Sometimes high costs for individual customization / branding
  • Maintenance and support cost-intensive, due to dependence on the software provider for maintenance contracts
  • Training usually necessary

Long-term costs:

  • Often significant license fees, especially for enterprise solutions
  • Chargeable upgrades if not included in the license price
  • High costs when migrating between closed source solutions (lock-in effect)

2. Open Source Software

Short-term costs:

  • moderate acquisition costs, possible costs for implementation and customization
  • Low to moderate costs for maintenance and support
    • Generally free of charge due to community
    • Professional support contracts may be necessary
  • Training usually necessary

Long-term costs:

  • Generally own hosting required
  • Possible license costs for commercial use
  • Updates and upgrades generally free of charge through community
  • Low maintenance costs, customizations may be possible internally

3. Free/Libre Open Source Software (FLOSS)

Short-term costs

  • No acquisition costs
  • Low to moderate costs for maintenance and support
    • Generally free of charge due to community
    • Professional support contracts may be necessary
  • Training usually necessary

Long-term costs:

  • Generally requires own hosting
  • No license fees even for commercial use
  • Updates and upgrades generally free of charge through community
  • Low maintenance costs, internal adjustments possible at any time

Closed source software therefore incurs the highest costs in both the long and short term, especially with extensive use and customization. Open source software already offers significantly more moderate costs, but these still depend heavily on the license model and requirements for support and customization. However, according to a study by Forrester Research , the expected cost savings from open source were met or exceeded for 87% of companies. Free/Libre Open Source Software (FLOSS) impresses with the lowest costs and at the same time offers the greatest flexibility and freedom for the company.

Conclusion

If we look at the cost analysis together with the advantages and disadvantages mentioned, the alternatives to closed source are therefore primarily characterized by their costs. The biggest disadvantages, on the other hand, are poorer compatibility with other software and a lack of business-level support. As is so often the case, there is no simple, universally valid truth for this topic. The suitability of open source software for a particular company and project must be considered on a case-by-case basis. However, if it is possible to counteract the disadvantages from the outset (for example with a partner such as Minas IT Solutions), the full potential of open source software can be exploited and a more sustainable and freer infrastructure can be created. In addition to a large number of companies worldwide, this is also being pursued by the federal and state governments in our immediate vicinity. Schleswig-Holstein announced its open source strategy in 2024 , with the goal of a “digitally sovereign administrative workplace”, while Switzerland has already prescribed the publication of all government software as open source in 2023 with the “Federal Act on the Use of Electronic Aids in the Fulfillment of State Tasks” .

If this brief excursus on open source has piqued your interest, just contact us . We look forward to talking to you about the possibilities for this in your company without obligation.