Tuesday, August 24, 2004

Software buyers turn cheap

Forbes has an interesting analysis of a growing trend for corporate software buyers to turn away from high priced solutions, such as Oracle's database, to cheaper alternatives, such as MySQL.

Craig Murphy has had enough. As chief technology officer at Sabre Holdings, which runs the world's largest airfare and ticketing network, Murphy has spent millions of dollars on database and other software from companies like Oracle. But last year, when Sabre was building a new computer system for online shoppers, Murphy took a flyer on a database program from a little-known company in Sweden that charges only $495 per server computer, versus a $160,000 list price for Oracle. Guess what? The Swedish stuff works great. Fired up, Murphy is hunting for other places to use the cheaper software, called MySQL.
Forbes also points out that while hardware costs have been dropping over the past 15 years, software prices have been increasing. In 1990, software accounted for only 10% of IT spending. Today it accounts for 20%. It's hard to justify why software deserves an increasing slice of the IT spending pie.

Forbes includes an interesting graphic that shows major categories of commercial software with their open source and other low cost alternatives, such as ASP or subscription-based solutions, partly reproduced below:
CategoryCommercial ExamplesCheap Alternatives
Operating SystemsMS Windows; UnixLinux
Web ServerMS IISApache
DatabaseMS SQL Server; IBM DB2; OracleMySQL
Desktop AppsMS OfficeSun StarOffice and OpenOffice
E-MailMS Exchange; Lotus NotesScalix
Apps ServerIBM Websphere; BEA WeblogicJBOSS
CRMSiebelSalesforce.com; NetSuite
IP TelephonyCisco Call ManagerAsterisk
Scripting LanguageMS Active Server Pages; Sun JavaServer PagesPHP
Spend MgmtAribaKetera
I think that the trend toward open source and other low cost alternatives is finally reaching a tipping point.

Related posts
Microsoft seeking mind-share with free versions of its tools
Microsoft .NET losing mind-share?
Subscription model for software gaining ground
Microsoft-sponsored study on Win2K vs. Linux is NOT all good news for Microsoft
Buzzword alert: "open source"

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