Enterprise Social Collaboration: The Choice Between Open Source & SaaS

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1 Enterprise Social Collaboration: The Choice Between Open Source & SaaS Analyzing the benefit of moving your social business software applications to the cloud

2 Contents Introduction... 3 Definitions... 4 What is On-Premise Software?... 4 What is Open Source Software?... 4 What is SaaS?... 4 Open Does Not Necessarily Mean Free... 5 The Open Source Licensing Challenge... 5 Driving Adoption for your Software of Choice... 6 Customizing your Community... 6 Modifying Code... 6 From Open Source to SaaS: A Profile of the Digital Opportunity Trust... 8 Conclusion... 9 Social Software Evaluation Checklist

3 Introduction Two dramatic shifts in enterprise technology have emerged with transformative power: social business software and cloud computing. Social business software refers to the suite of internet-based, Web 2.0 tools including social networking, wikis and blogs that fundamentally change the way we interact and collaborate with employees, customers and partners. Initially popularized in the consumer marketplace, and embraced by younger generations, this shift has now firmly entered the business world helping to closely replicate our natural processes for creating secure and meaningful connections with people, processes and information. As companies evaluate social business software and the relative merits of adoption, total cost of ownership (TCO) is often top of mind. And, with two-thirds of IT executives planning to undertake structural cost reductions in the next 12 to 18 months 1, it s the cloud computing value proposition that will help move the enterprise into this new reality. Cloud computing is primarily about cost reduction and elasticity in the allocation of resources. In essence, it s about running software and accessing data outside of the centrally-managed IT department and into the cloud of the internet. The computing systems and the infrastructure necessary to support your business applications can be scaled according to demand. There s no need for upfront capital investments or the ongoing costs associated with power, facilities, maintenance, backup and administration. There is no question that cloud computing is changing the way companies view their investment in software, technology and IT infrastructures. After all, the Digital Universe is expected to double in size every 18 months, placing significant pressure on the IT department to manage this cost. 2 This paper explores the differences between open source and Software as a Service (SaaS), and the impact of cloud computing, on the total cost of ownership of social business software. Digital Opportunity Trust (DOT), an organization funded in part by the Cisco Systems Foundation, is also profiled as they migrate from an open source intranet to a SaaS-driven model. 1 IT in the new normal. McKinsey & Company. December, As the Economy Contracts, the Digital Universe Expands. International Data Corporation (IDC). May,

4 Definitions What is On-Premise Software? On-premise software or solutions are proprietary applications that are installed, configured and maintained locally on internal hardware and software provided by the customer. Most companies either purchase onpremise software from 3 rd party vendors or acquire open source software. What is Open Source Software? Open source software (OSS) is an application whose license gives the user the freedom to run the program for any purpose. Anyone can study and modify the program, and redistribute copies of either the original or modified program (without having to pay royalties to previous developers). Although Software-as-a-Service (SaaS) is more closely associated with cloud computing, open source software may also be deployed in this fashion. What is SaaS? Software as a Service (SaaS), now commonly referred to as cloud computing, is a model of software deployment whereby a provider licenses an application to customers for use as a service on-demand. SaaS software vendors generally host the application on their own web servers in a data centre and price their applications using a payper- use or subscription model. This type of deployment eliminates the need for a customer to install and maintain the software. The software vendor takes on all of the responsibility for the infrastructure required to run the application, including the servers, backup, software, operating systems, databases, updates, migration, power and cooling and facility space in order to lower the total cost of ownership (TCO). The IT department can then focus their limited resources on implementing business solutions, rather than adding to the overall IT infrastructure costs. 4

5 Open Does Not Necessarily Mean Free Many people believe that open source software is free, with the option to upgrade to a supported edition if and when necessary. In some cases this is true, but it is important to weigh the burden these "free editions" can put on your internal IT teams, who are often severely under resourced. Many companies do not realize that the cost of software is just a small component of the total investment in successfully implementing technology. They forget to take into account the hidden costs of the hardware, software and ongoing maintenance required to run an on-premise, open source application. When you implement a SaaS solution, you are, first and foremost, not buying or obtaining software licenses. You are purchasing a service. Because SaaS is a service, there is nothing to install and nothing to maintain. This means you don't have to deal with upgrades, security patches or the maintenance of servers. Even with the growing acceptance of the SaaS model, upwards of 80% of an IT department budget is dedicated to maintaining existing infrastructure. Many small businesses only have one fulltime person typically an IT generalist to support a complex array of resources and users. Even in larger organizations, IT staff average approximately one full-time person for every 100 employees. On average, a mid-level IT Administrator's fully burdened salary is $80,000 per year. This is in addition to the physical infrastructure costs required to support a software installation. It is easy to see how business and technology complexity often outstrip the growth of IT resources, especially in mid-market firms, who face the complexities of managing several locations, multiple servers, an expanding array of desktops and devices and a more mobile workforce. As a result, reacting to daily application availability, maintenance and support issues can stretch resources beyond their limits, leaving little time to deploy new solutions or even update existing ones. The Open Source Licensing Challenge On the surface, an open source project appears to be license free. Download packages are available on the internet and projects can be installed on servers without having to purchase the software. But, attached to that open source project is a legal license that can limit an organization s ability to use and/or customize their recently acquired software. Every open source project must adhere to a licensing model. And, there is an array of license models currently in use across the open source community. At this point in time, six major license models have emerged, each with their own unique ideology. The most popular open source license model, GPL (GNU General Public License), has a provision that requires any project which uses GPL source code to apply the GPL license model. Other models allow the software vendor to provide base software elements for free, but then charge for application extensions and modules. When considering open source software, it is important to understand the legal ramifications of that decision and weigh those against the advantages. 5

6 The chief advantage of on-premise is that control resides with the user and not the provider. You may modify the code, control upgrades and maintain control over the security of your data. There are also no ongoing monthly costs for the software itself and, if an active developer network is built, you benefit from the collective contributions of the community. Driving Adoption for your Software of Choice One of the biggest factors in determining the success of a social business initiative, whether on-premise, open source or SaaS, is the ability to get people to join, stay engaged and keep returning. 3 It s a culture and business process issue, as much as a technology one. A culture favoring open collaboration and early adoption of forward-thinking, Web 2.0 technologies, coupled with a younger employee demographic, are typically leading indicators of success. Nevertheless, a set of best practices and lessons learned on how to build and support the viral adoption of a grassroots community are critical. A critical factor in the evaluation of open source versus SaaS is disconnected from the actual technology discussion it s the ability for that software platform to provide a proven set of methodologies, building blocks, standard operating procedures and best practices for building successful online communities. Customizing your Community When evaluating open source versus SaaS software, the ability to customize the application should weigh strongly in the decision-making process. For example, if your organization is looking for a totally custom solution, with proprietary 3 rd party application integration, then open source might be the way to go; however, customization can be a slippery slope. Some organizations even fall into the trap of creating solutions that take too long to build, and are even more difficult and costly to maintain. As well, many IT departments do not have the time, skills or organizational commitment required to complete the integrations, eventually outsourcing the project to a costly 3 rd party integrator. Modifying Code The chief advantage of open source software applications is that control resides with the user and not the provider. You may modify the code, control upgrades and maintain control over the security of your data; however, any modifications you make to the software must be maintained and upgraded, as new versions of the Tribalization of Business Study. Deloitte Development LLC

7 open source code is released. Furthermore, there is no guarantee that your modifications will continue to work as new upgrades are released. The leading SaaS-based community solutions are built on an open and extensible platform which allows you to create a unique look and feel that is aligned with your brand standards, while also creating points of integration with 3 rd party applications. This can be accomplished using a variety of standard methods depending on the security and complexity of the integration, including: 1. RSS (Really Simple Syndication) feeds distribution of open content such as blog entries, news headlines and multimedia 2. iframes lightweight application integration 3. DHTML mobile device integration 4. Widgets drag-and-drop dynamic content 5. Open API REST-based API (Application Programming Interface) 6. Authentication user authentication standards such as Open ID and Active Directory 7

8 From Open Source to SaaS: A Profile of the Digital Opportunity Trust Digital Opportunity Trust (DOT), an international non-governmental organization that enjoys strong partnerships with multinationals such as Cisco Systems and IBM, connects people and technology globally to promote locally driven social and economic development. Over the last seven years, 174,000 people have participated in DOT community and education development initiatives and the organization now operates in eleven countries: China, Mexico, United States, Rwanda, Ethiopia, Kenya, Turkey, Egypt, Lebanon, Jordan and Canada. DOT is committed to the ideals of open source the free sharing of ideas and the transfer of knowledge for the greater good. This approach was the key driver behind the early adoption of The Plone Content Management System as the backend for both the corporate website as well as the organization s internal collaboration system. Although the initial costs of the open source platform were low, the ongoing development cost, lag time between feature changes and overall complexity of the system became challenges for the organization. Program participants faced demoralizing delays in low-bandwidth environments, each upgrade required a systematic evaluation to determine if the changes could be supported and the constant reengineering of the system threatened to funnel money away from community development efforts. Something had to give. With DOT partners pushing for cost reductions through the use of technology and participants eclipsing DOT using their own commercially available social networking sites, the time was ripe for change. Working with IGLOO Software, DOT created a new publicly available website for promoting the organization and a private intranet to scale outreach efforts throughout the globe. Configurable by business users, not IT professionals, the new web framework empowers country offices through the twin goals of standardization and localization. Valuable content is delivered from DOT to each country office via a centralized curriculum centre and wiki, while customization and localization are enabled within each sub-community. While we were hiring developers to address the backlog of features, we quickly realized that our open source platform was being eclipsed by what our people were doing on their own social networking sites. ~ Grant Thomas Vice President, Strategic Development Digital Opportunity Trust Although the organizational hierarchy is relatively flat, and information sharing is embraced, unique access privileges are required at every level. To further complicate matters, DOT s community development efforts often take place in traditionally closed societies and across social and cultural boundaries. This raises significant issues involving the protection of intellectual property, access to financial data and even the need to filter broader opinion sharing in some cases. The IGLOO suite enables tiered permissions, audit trails, version control and moderation of group discussion forums. This provides the over 500 global DOT executives, participants and stakeholders with the ability to interact freely and easily inside the intranet using the technology, as opposed to developing it. 8

9 Conclusion Both open source solutions and SaaS applications can reduce capital costs. The question remains, what happens down the road, after the initial implementation? In the full lifecycle of a software solution, the initial investment is always smaller when compared to the ongoing maintenance and adoption costs. Dealing with extensibility issues, correcting failures, obtaining support and the costs to upgrade, all add up over time. The checklist below outlines the key considerations you may wish to review when evaluating an open source versus SaaS business social software deployment: Social Software Evaluation Checklist Total Cost of Ownership (TCO): The TCO of a SaaS solution is highly predictable. In evaluating open source, consider the fully loaded costs. If deployed on-premise, you'll need servers, a secure place to keep them and possibly server software licenses. More importantly, you'll need people to design, implement, maintain and support the community platform throughout its complete lifecycle. Developer Community: The communities surrounding open source applications provide enticing offers new features, updates, bug fixes and upgrades from a network of skilled developers and users. But the level of paid support from your provider can determine how much time your organization spends sifting through the community. Support: Unlike SaaS solutions, most open source applications require some additional legwork to stay on top of upgrades and enhancements. Support packages are not always easily accessible. Licensing: Be aware that the licensing terms of some open source applications may require you to distribute your enhancements to the general public. Check terms carefully because there are dozens of different open source licensing models. Reliability, Security & Scalability: Major SaaS vendors use hardened facilities (SAS 70 compliant), redundant power, frequent backups and guaranteed uptimes (99.5%). Duplicating a highly reliable data centre can be costly. Long Term Stability: The open source landscape is littered with niche products that never achieved a critical mass and were abandoned by users. The safest bet for any market is to stick with the leaders. Speed of Deployment: Most SaaS services can get you up and running in a couple of days. This is particularly attractive if you're running a pilot or short-term project. Copyright IGLOO Inc. The copyright to these materials is owned, without reservation, by IGLOO. These materials may not be copied in whole or part without the express, written permission of IGLOO. The information in this document is subject to change without notice. All rights reserved. Printed in Canada. 9

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