Pursuing An Open Desktop, Why Not!

A key aspect of running IT as a business is to remain alert to opportunities to significantly reduce costs or increase revenues for your organization. This is true for both private and public sector organizations. Open Source represents a major opportunity to lower operating costs and/or increase revenues.

In this series I will be presenting some of these opportunities that are being created by open source technologies but appear to be overlooked by many if not most CIO’s. For me the prime example is implementing an open source desktop. The estimates that I have seen indicate that an organization can reduce the hardware and software costs of a desktop or laptop computer by potentially as much as $1,000 per unit. When I was a CIO in the State of Oregon we had approximately 35,000 desktop/laptops, the potential savings was around $35.0 million.

So why was the State bureaucracy so hesitant about going after these potential savings. Yes, one can argue that changing the desktop is a significant effort but so are the rewards significant. My assessment was that the major roadblock was fear of change and the potential backlash from a major commercial vendor. Interesting given that the Governor had declared that Oregon is the epicenter of the Open Source industry, which indeed it is. No that change and vendor objections aren’t real concerns, look at the experience in Massachusetts, but I can’t personally imagine telling my boss that I won’t pursue such an opportunity for purely political reasons.

In these cases the driving principle for me is what I would do if it were my money and I recently faced this very issue. I had purchased a new laptop computer which included at no cost a version of Microsoft Office. It was the basic word processor, spreadsheet and presentation software but there was a catch. I could use the software 30 times and then I had to purchase a license. My new laptop ran the new Vista operating system and I had a desktop running Windows XP. Since it was my money, I went to the Oregon State University web site and downloaded the open office suite rather that continue to use Windows Office. The suite works great and includes Open Office Draw, Math and Database applications in addition to a word processor, spreadsheet and presentation applications. In addition to saving a bundle of money, the look and feel is intuitive and an easy adjustment, you can save in a number of formates to make exchange of documents quite easy. I especially like the button that creates and stores the document as a pdf file.

To me the open source office application suite is an obvious cost savings opportunity that is being overlooked by both private and public sector CIO’s. I’ll be discussing other opportunities in coming postings.

William A. Crowell

Principal

Magellan Associates, LLC

http://www.magellan-associates.com/

Published in: on September 6, 2009 at 10:12 pm  Leave a Comment  

Collaborative Software Development – A Must To Explore

Collaborative development of non-strategic applications.  It’s a mouth full and probably the biggest opportunity for the CIO to reduce the costs and increase the value of IT within their organizations.  There have been a number of successful collaborative software development initiatives using an open source development model.  Some examples: of course there is Linux which is governed by what was the Open Source Development Lab in Beaverton, Oregon (now The Linux Foundation ), and the Eclipse Foundation an organization providing a universal tool set for development of open source software, and one of my favorites the Kuali Foundation a consortium of Universities that are developing, sustaining and evolving a comprehensive suite of administrative software that meet their financial, research, student community and infrastructure needs.

What each of these initiatives represent: major technology companies (Linux), software development companies (Eclipse) and universities (Kuali), is the realization that it is in their individual and collective interests to work collaboratively using an open source development model to create software applications that do not have strategic value to any of the individual participants.  In this climate, a new company has emerged in Beaverton Oregon called the Collaborative Software Initiative (www.csinitiative.com).  CSI is looking to extend the collaborative software development model in both the public and private sectors and the opportunities seem almost endless.

A prime target market is the social service programs that are administered by the Federal, State and Local governments in the United States.  For example, the Federal government funds a health insurance program for the poor called Medicaid.  The program is administered by the States who enroll their citizens in Medicaid and pay their benefits to the health care service providers.  The program is administered under federal rules and regulations and is therefore largely identical in all 50 states.  Moreover the software that has been developed over the years to administer Medicaid is in the public domain because it was largely funded through federal dollars and is therefore available to form the foundation of an open source initiative.

With all this in mind, Oregon is in the process of implementing a new, modern system to administer their Medicaid program at a price tag of over $70 million.  If all 50 States spent this amount every 7 to 10 years to keep their applications up to date, the overall price tag would be $3.5 billion to the tax payers and since the Federal government funds these systems at 90%, their cost would be $3.2 billion.  This seems to be ample incentive to have all 50 states come together in a consortium to apply the proven open source development model to create a single universal system for the administration of the Medicaid program.

Hopefully this will happen in my life time,

William A. Crowell, Principal
Magellan Associates, LLC
www.magellan-associates.com

Published in: on September 6, 2009 at 10:01 pm  Leave a Comment  

Open Source, Can You Afford Not Considering?

There is a lot of talk recently about alternatives to Microsoft’s desktop applications, see my recent posting “Pursuing An Open Desktop, Why Not!” as well as “P&G Flirts with Google Apps and Scares the Bejesus Out of Microsoft” posted by Tom Wailgum on October 1st, “Fighting Government Waste One Google Application At A Time”, and “Cost Savings Found When Microsoft Outlook Ousted for Gmail at British Construction Firm”.

The Open Office desktop and Google Apps are only the beginning of  a  readily growing availability of  software alternatives. Compiere’s ERP and CRM applications, SugarCRM’s relationship management application, OpenWorkbench from Computer Associates, Mozilla Firefox web browser, Openbravo ERP and many other can be found on Wikipedia.  The point is that many of the most sophisticated enterprise applications are now becoming available through an open source provider.

Why is this important?  Let me share a personal experience.  It was June and the Oregon Department of Human Services was going to implement the new HIPAA compliant codes for our Medicaid application in January of the coming year.  This had a significant impact on our health care partners, since they had to modify their systems in order to be able to submit electronic invoices to the State.  If our partners didn’t update their systems before January they would have to file paper invoices, which we estimated would increase the States workload by around 60,000 paper invoices per month.

As we investigated the situation, we discovered that a number of different State employees were coordinating communications with various health care providers, there was no central repository of this information and follow up information was being kept on sticky notes.  There was a clear need for a relation management application, but with only six months to get this job done there was no time to go through the traditional procurement process to procure and implement potential solutions such as Siebold or SalesForce.com. 

One of our top system architects came to our rescue when he discovered SugarCRM’s application on the Internet and since it was an open source application he was able to download and install it in a single day.  Our customers loved it and since it was an open source application we were able to make some minor modifications (mostly to screen literals) and have it in production within days.  We were also able to download contact information from our mainframes and create a comprehensive partner database.

The bottom line was that when we went live with the HIPAA compliant transactions and code sets almost every electronic filler was ready and there was almost no increase in paper invoice volumes.  While the cost savings were substantial the speed in which we able to meet everyone’s needs was the big payoff.

As a CIO you need to be investigating these open source and other alternative software options.  Next posting will discuss what I see as the biggest payoff from the open source development model and that is collaborative development of none strategic applications.

William a. Crowell, Principal
Magellan Associates, LLC
www.magellan-associates.com

Published in: on September 6, 2009 at 9:50 pm  Leave a Comment  

Evaluating the Alternative Desktop – The Time Is Now!!!

In a recent blog that I wrote “Pursuing An Open Desktop, Why Not!”, I argued that CIO’s should be exploring an alternative desktop as an opportunity to significantly reduce life cycle costs of IT within their organizations. After a recent conversation with one of our clients, I realized a framework is required to make this assessment. I also realized that the topic should be expanded to an alternative desktop now that Google has entered this space.

The first element of this framework is to recognize that considering a change in the desktop is a strategic IT initiative and not simply a technical option. It’s strategic because it could lead to a significant reduction in the cost of it and extend the useful life of these assets. During these difficult economic times the potential of reduced costs needs to be brought to the attention of senior management and the CEO and CFO. Clearly the potential should not be oversold and the drawbacks of such a major change need to be considered. The key word here is change.

The second element of this framework is communications. You need to communicate early and often to the most senior levels of management and to the organizations employees to avert their fears of such a basic change. You need to stress the prospective benefits of the change and IT’s understanding that this type of opportunity deserves a complete and through investigation and if justified a thoughtful implementation plan.

A through investigation of this opportunity includes the follow activities:

  • Documentation of the current situation to include technical capabilities, requirements and costs,
  • Documentation of the impact on your technical infrastructure and technical staff,
  • Identification and definition of alternatives to include open source, SaaS, etc…,
  • Evaluating a potential “mixed” environment (for example, Vista and Open Office),
  • Detailed evaluation of alternatives from a technical and cost perspective, and
  • Proposed implementation plan, costs and expected savings.

It is important to note that Microsoft is a potential alternative to be considered and the simple fact that your organizations is considering alternatives will most likely effect their position on the costs of upgrading their offerings. If you don’t believe this to be true, I suggest you read the recent blog on cio.com entitled “P&G Flirts with Google Apps and Scares the Bejesus Out of Microsoft”.

Given the potential savings, which I believe for larger firms and government will be in the millions of dollars, I don’t believe getting started on this evaluation can or should be put off.

William A. Crowell, Principal
Magellan Associates, LLC
http://www.magellan-associates.com/

Published in: on September 6, 2009 at 9:47 pm  Leave a Comment  

Cloud Computing – The Next Great Innovation?

I’ve been reading a bunch of articles on Cloud Computing and I think it’s something that you need to have on your radar screen.

If your the owner of a small to medium sized business or the CIO of a public or private sector organization, cloud computing will be knocking on your door sooner than you think.  To get prepared you’ll need to understand what this newest innovation in a computing architecture is and how best to integrate it into your computing strategy.

In a way, cloud computing is a rebirth of the concept of time sharing but on steroids. For those of us old enough to remember, and I am, many towns had a company with a large mainframe computer that shared it’s services among many businesses in their community.  I believe I’m correct that time sharing was the idea that Ross Perot first embraced when he started Electronic Data Systems (EDS).  My initial experience with time sharing was when I worked for Penn Central Transportation Company shortly after the conveyance of the railroad to ConRail.  Penn Central was still in bankruptcy and couldn’t afford it’s own mainframe, so we purchased computing services through a local time share company.

Setting up a time sharing operation, however, was no simple task.  You needed to order and get installed a high speed line (in those days a T-1 circuit) between the time share company and your offices.  You also needed to install your proprietary systems on their computer.  It was a complex relationship and the quality of service was sometimes less than desirable.

Oh but I  date myself with the timeshare comparison and a more current example of this concept is “Utility Computing (UC)”, a term used just a few years ago. The Cloud is really that concept matured.  A major constraint in the deployment of UC was resource accounting.  Hopefully this has matured to the point that makes the cloud a true utility in nature and not just the outsourcing of the data center.

The cloud is a wholly different experience and can be implemented in some instances by individuals with no technical expertize.  Take for example Tien Tzuo who recently founded an on-line billing company called Zuora in Redwood City, California.  In a lead story on Innovation in the Christian Science Monitor, Mr. Tzuo explained that his firm implemented Google Apps for a whole range of computing services including e-mail, document collaboration, shared calendars, chat and instant messaging.  Although the article didn’t mention it, I assume that his on-line billing system, accounting and other business applications were also implement in the cloud.

Another extremely interesting use of cloud based computing was from the article by Bill Snyder of CIO entitled “Cloud Computing: Tales from the Front”.  The article includes a description of a project where the New York Times used Amazon Web Services (EC2 and S3) to generate PDF files of 11 million articles for it’s archives in less than 24 hours using 100 EC2 instances.  Can you imagine how long it would have taken and how expensive it would have been to do this in-house?

These two examples represent the two extremes of how I believe cloud based computing will evolve.  For the small to medium sized organizations, they will find that they can obtain top quality computing services for little to no capital investment, at a much lower cost and have incredibly more flexibility in meeting their expanding or contracting needs. 

For large public and private institutions, cloud computing will most likely lead to the demise of the central IT organization.  The premise for centralized IT was based upon its economy of scale in computing.  The cloud will eclipse this advantage of the central IT organization, with the result being the return of control of IT services to the organizations being served.  The central IT organization will evolve to be the manager of the cloud computing relationship(s), the purchaser of IT assets such as desktops and laptops, and some of the IT customer service functions.

A key question for CIO’s is their role in this transformation.  Will they throughly research this new option, develop a strategy to take advantage of it where appropriate and lead this transformation?  If this will lead to the dissolution of the CIO’s empire, does he or she have any incentive to get engaged?  Maybe it’s best to throw up road blocks, how about security or for that matter reliability?  My own feeling is it’s better to be in the tent evaluating and leading the assessment than being viewed as an obstruction by my customers.

Moving to cloud for many organization with an embedded infrastructure will be akin to outsourcing and will not eliminate the CIO’s role, just continue the shift that been underway. More focus on the business and on ensuring the commodity providers of computing services are doing so in a fashion that is efficient and effective for the enterprise. Clearly, this requires real competence in being able to run IT like a business.

One final thought, before you sluff off cloud computing as simply a fad that will pass.  Consider some of the players entering the field.  They include: IBM, Apple, Google, Amazon and Microsoft for example.  Also think about how this plays into the concept of software as a service and not a product.  I’d be giving this innovation considerable thought and attention.

William A. Crowell, Principal
Magellan Associates, LLC
www.magellan-associates.com

Published in: on September 6, 2009 at 9:41 pm  Leave a Comment  
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