Linux 40 per cent cheaper than Windows, exclaims IBM

Linux 40 per cent cheaper than Windows, exclaims IBM

Linux's total cost of operation (TCO) is typically 40 percent lower than Windows, according to an IBM-sponsored report from the Robert Frances Group (RFG), publicized by IBM last week.

The report comes after two years of Microsoft-sponsored research heralding the benefits of Windows over Linux, although IBM denied it is a direct response.

Ironically, the study appears just as Unilever has revealed it is scaling back ambitious Linux plans announced two years ago. Unilever argues that Linux's cost benefits have declined so far that the project is no longer worth it.

The Robert Frances study will be welcomed by companies looking for solid data on Linux cost benefits, even if it is sponsored by a company that's sunk more than US$1 billion into promoting the open-source operating system. The relatively few independent studies of Linux's TCO have come to similar conclusions to the Robert Frances study. For example, last year an Australian IT services firm concluded that Linux installations could be up to 36 percent cheaper to install and run over a period of three years than comparable Windows systems, though support and hardware costs could lower the savings to as little as 19 percent.

The Robert Frances study simplifies things by examining a single application layer found in most enterprises -- application servers -- and compares installations on Linux using x86 hardware, Windows on x86 and Solaris on Sparc. (Researchers attempted to gather data on Solaris on Opteron, but this combination is relatively new and wasn't encountered in the course of the study.)

The overall finding was that Linux was 40 percent less expensive than a comparable Windows system and 54 percent less than Solaris, based on a three-year period of ownership for a system supporting 100,000 operations per second on the SPECjbb benchmark. The research was based on in-depth interviews with IT executives from more than 20 medium and large enterprises -- all with more than 250 employees -- in industries such as education, entertainment, finance, government and retail.

Based on this finding, the study recommends executives consider Linux for most high-transaction environments. While admitting that Linux's cost savings have declined over the past few years, Robert Frances argues Linux will remain cheap enough relative to other systems to make any investment worthwhile.

The group also noted that Linux delivered enough benefits outside of TCO to justify investment. "Executives... can also identify business benefits that will in most cases outweigh the cost savings alone of moving to Linux for specific solutions," the report said. Those benefits include Linux's flexible licensing model, the wide range of supported hardware platforms, a choice of support providers and the transferability of Unix administrator skills to Linux.

The report breaks the headline figure down into several cost categories -- hardware acquisition, software licence and maintenance, and support and administration -- each of which shows significant savings over Windows and Solaris. Generally, operating costs of all kinds were lower for Linux, and so were hardware acquisition costs -- something a bit unexpected, given that Windows and Linux run on roughly the same hardware.

"RFG was surprised to find such a large gap between the Linux and Windows hardware acquisition costs," the study said. "Study participants drove their Linux systems to higher utilization levels than those who used Windows, and ran more applications on each server; they therefore did not deploy as much excess computing capacity."

This meant that less expensive systems could support the same workload, the study said.

A significant finding affecting operating costs was that Linux administrators could often manage more systems than Windows administrators in a given amount of time, meaning lower management costs and reducing complexity.

Linux still may be cheaper than Solaris or Windows, but the study agreed with Unilever that the price difference is not what it once was.

This is partly because Linux buyers are now treating the platform like any other commercial product, and are buying the same support offerings, management tools and other facilities as they would for another operating system, Robert Frances said. The other factor is that competitors have responded to pressure from Linux by lowering their prices, according to the study.

Does this mean Linux's cost benefits will eventually disappear as competitors are forced to match its low prices? The analyst group doesn't think so. "Deltas in support and management costs, and improvements in how customers manage their Linux systems, will likely allow Linux to retain its position as the lowest-cost option," the study said.

Such assurances were not enough for Unilever, which is axing its company-wide Linux adoption strategy, according to comments by Unilever CIO Neil Cameron to industry news site on Wednesday.

The main factor in changing Unilever's mind, according to the report, was that competing suppliers have become "more responsive" through competition with open source, lowering their prices and reducing the gap.

Unilever will now reportedly shift away from the strategy announced in January 2003, which would have seen it standardizing its infrastructure on Linux via a multiyear contract with IBM, and will instead adopt Linux here and there as needed.

In interviews in August 2004, Unilever revealed it was taking a very gradual approach to the migration. Speaking to online news service VNUNet, Cameron commented that migration thus far had been low-level infrastructure such as firewalls, and said the company was being "appropriately cautious". The migration was "not quite step-changing" but was more about "narrowing the gap" between the previously installed systems and open source.

Some major enterprises have investigated Linux deals primarily in order to put pressure on their existing suppliers to lower prices, with no real intention of switching, according to industry observers.

The Unilever migration was not typical of Linux migrations, as the company was planning to use Intel's pricey 64-bit Itanium chip as its hardware platform. Most Linux installations rely on far cheaper x86 hardware.

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