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[ossig] CIO Asia - Open Source Opens its Doors

This makes for a VERY interesting read:


They talk positively about open source, open standards and ODF gets a
mention too!


Open Source Opens Doors

Malaysia’s CIOs are into open source software, and many see it as a way
of cutting costs and upping choice.

Gerald Wee

There’s little doubt. Whether you like it or not, open source software
is hot, and getting hotter. It is more than just Linux, although most
know the paradigm by that proxy. There are databases, office
applications, and other enterprise software to be had.

While open source software is software that can be used free of charge
without paying any user licences, it is actually more than that, as
users are free to make modifications to the software code to suit
specific purposes. In short, it gives users greater control over the
software versus proprietary software from vendor companies.

However, the knock is that while Linux is free, there is no such thing
as a free lunch. You still have to pay for support, implemented
solutions, and these may or may not be cheaper than traditional

To talk about the all these issues and more, CIO Asia, in association
with Red Hat Asia Pacific Pte Ltd, recently organised a roundtable in
Kuala Lumpur, Malaysia, and got together with the nation’s leading CIOs
to talk open source.

At the table were: Gerald Wee, Executive Editor, CIO Asia (moderator);
Shane Owenby, Regional Manager, Asean, Red Hat Asia Pacific; Mohd
Hashimi bin Mohd Nawi, Systems Analyst, Attorney General’s Chambers of
Malaysia; Fork Kiang Seong, Assistant Vice President, Application
Services—IS, Malayan Banking Bhd; Stan Singh, Senior Vice President and
Group CIO, MUI dotCom Sdn Bhd; Suresh M Kumar, Senior Manager, Systems,
NorthPort (Malaysia) Bhd; Azbir Abu Bakar, Head, IS Department,
Padiberas Nasional Bhd; Zulkepli bin Haji Hamid, Vice President, IT
Division, Time dotCom Bhd; and David Asirratham, IT Director, Multimedia
Here are the highlights of the event’s proceedings.

Singh: Why are we looking at open source? We find that our business cost
is increasing and so is the IT cost. So, we are thinking what we can do
to drive the IT cost down. Costs have gone through the roof. We had to
pay exorbitant fees just for the operating system. This is the
subscription fee, not even maintenance.

But we also know that part of the market has matured. Open source is
more than just Linux. There is the database, e-mail, and so on.
Management needs to be aware what they are getting into with open
source, but nevertheless, we are going open source because we know it
will drive IT cost down.

I’m saying that open source is the way forward. I tell people in my
company, that you make a business decision. As long as I give you what
you need for the business to run, don’t worry about the underlying
technology deployed. The cost may be MYR100,000 (US$27,294) today, but
there is maintenance, upgrades, support. Vendors sometimes want you to
upgrade, but you already have millions invested in modifications that
support old code, and must be retrofitted to the new version. This is
why we are moving away from certain proprietary systems, simply to drive
the cost down. It is not so much the cost (upfront discounts) but the
total cost of ownership over three years. Hidden costs pop up

Open source will help us.

Kumar: We’ve been using it for quite awhile. We moved towards open
source as a strategy to deliver new services and technology without
costing an arm and leg. Our early early e-commerce strategies were based
completely on open source. From Northport’s perspective, we’ve capped IT
costs over the last eight years, primarily because we are aggressive in
maintenance given to vendors, and in applications where we have issues
with vendor support in terms of reliability, we’ve moved some over to
open source where we’ve been able to cut down on licensing, but still
get services from the vendor.

For example, Oracle had some rigid licensing agreements, so EnterpriseDB
gives an opportunity to move some non-core applications there and see
whether performance is an issue, and then start moving. So, it is cost
savings plus the ability to manage services. We’ve contained costs so
well, that when we tried to outsource, we couldn’t do it very much
because our cost alone is lower.

Owenby: Our number one key vertical is telcos. Why are they looking at
Linux? They are getting squeezed the most on price, but need to get most
out of IT. We are all paying less on our bills, yet they have to provide
more services—3G, SMS, etc. They are getting the same stability with
Linux. Financials is another. The top 10 banks in Wall Street have been
running Linux since 2000. Why? Cost savings and performance.

Asirratham: When it comes to servers, the way forward is Linux, that is
very clear. Today, 80 percent of our servers are running on Linux. Cost
is the main factor. For example, we had Sun Solaris, and annually, we
pay about MYR180,000 (US$49,000) just for the maintenance of the
operating system. With that, I could easily purchase a whole suite of
servers, and that is what we’ve done. We can buy new servers every year,
put it on Linux, and get good performance. So, the server side is very

Azbir: Before we went from Microsoft Access to open source, we fought
within the department in terms of what benefits are available. Should we
do all open source or do Microsoft SQL and .Net? I had to convince a few
of the developers to use other open source languages to develop the
system. We had consensus. We tried to do something, and then reduce the
cost—first time cost as well as maintenance costs over the years. Then,
from there, we had a proposal to present to the management.
The bottom line is cost savings. We saved a lot of money, especially in
maintenance since new hardware has a three year warranty, and we
maintain the software ourselves. We saved around 60 – 70 percent of our
IT costs this way.

Singh: Business critical applications cannot afford downtime. I will pay
for maintenance because if something happens, I can pick up the phone
and call the company, but who do I call with open source? For instance,
we were talking about a project, and MySQL came on the table. The
question was: “Where is MySQL office in Malaysia?” People had to
scramble to find the closest office, so there was a degree of concern.
These are some challenges from a commercial perspective that brings
about concerns.

Kumar: One of our issues is Microsoft .Net. It seems to be very powerful
from our perspective, how to integrate with clients, and our open source
Web services is constrained in terms of service provisioning. We are
doing some internal review as to whether some current e-services should
be moved to a .Net system because it can offer something better to
clients. Clients decide, and it is always a business decision.

Owenby: Most people look at RedHat as a Linux company. That is a
distorted view. We look to bring open source solutions to the
enterprise. Linux is clearly the most successful. We just acquired a
company called JBoss for US$350 million. We are trying to solve all
enterprise problems with open source software… supported. What we bring
to the table is support, addressing issues like where is the local
office for so and so? We are bringing that level of reach. JBoss did not
have a presence in Asia-Pacific. We have that reach globally, and you
will have a supported application server.

Asirratham: In terms of support, it used to be a problem a couple of
years back, but today, every hardware vendor says that it is no problem
to support Linux.

Kumar: One of things we do is come up with a lot of value added
services. If you buy commercial off-the-shelf, one of the things you
can’t do easily is customise things specifically for unique customer
requirements. Open source gives you the flexibility, and we’ve been
leveraging on it as well. When a big shipper wants something
specifically for their ERP, we can specifically tune it for it. That
gives us a competitive edge over our competitors.

Owenby: Suresh feels that the ability to customise open source is a
positive. I’ve gone into organisations where they absolutely do not want
their technical people touching the source code. It’s about perspective.
If you have a solution on open source, you can fix that yourself. That’s
an option. You may not find the qualified people to do it, but at least
you have that flexibility. Not proprietary solutions.

Open source is about choice. People want choice. They see that the
ability to run on HP, Dell, etc. is better than only on Sparc-Solaris.
One of our key verticals, Government, don’t want to be locked into
anything. They want choice. Security is also a huge area for
governments. So, with open source, you can look at the code, no back
doors, and do the assessment.

There is an Open Document Format happening around the world. People got
sick of Microsoft owning the document format. You got locked into that
for Web services, Exchange requires Active Directory, and all that. You
are making decisions now that may limit choice in the future. You don’t
have choice if you go down these vendor paths.

When I go to sell, I tell them that if Red Hat is not doing a good job,
there is nothing that locks you into us. You can easily move to another
distribution. Our job is to provide good support, innovation, to keep
giving you value from us. Microsoft, Oracle, old hardware vendors,
simply limit your choice.

Owenby: Oracle Database 10g was first released on Enterprise Linux 30 to
90 days before any other platform. Why? Two reasons. If you can decrease
the hardware cost, put a supported operating system on top of that, it
leaves more money for Oracle. That’s one angle.

Number two angle is that if Oracle needs a feature in an operating
system, how can they get that done with Solaris? Larry writes a big
cheque to Sun. With Enterprise Linux, he pays his smart engineers to get
together with our smart engineers, and get the feature implemented. So,
guys running Oracle under Enterprise Linux, will see performance gains
because Oracle can work with the operating system without any issues.

This is an example of how open source benefits the world, and how we
make our money by providing support on top of that.

In my past couple of years in Asia-Pacific, I’ve had customers say they
want to run their Oracle infrastructure on Enterprise Linux. Why? They
feel they get better support from Oracle because they are running on the
platform Oracle develops on.

Fork: For Maybank, we have a team looking at bank architecture needs in
the next three to five years. We have very stringent IT baseline. We are
moving out of .Net strategy and focus on Unix. Our business is very
sensitive, being in banking. Downtime cost is high if a system is not
proven, and gets hacked. Goodwill, image of bank is impacted.

We have worked with a lot of off-the-shelve solutions cannot fulfill our
stringent security standards. I am not sure how open source fits in.

Owenby: DES is an open encryption standard. The algorithm is very
secure. That is an example of open standards, but has not affected the
security, because the algorithm is secure. Another example is the Apache
Web server. It runs 60 to 70 percent of Web servers. Just because it is
popular and open source doesn’t mean it is insecure… or secure. Same
with proprietary. It is how it is actually written. But since it is open
source, all of us can do the analysis to see if it is secure or not.
With proprietary, none of us can do any analysis until after something
has been exploited. The fact that we can see it, we can proactively make
it secure.

Kumar: The reason open source works is because of peer review. That also
means the peers have to be technically strong to appreciate the code.
Many are in the vendor managed environments, not development. These
don’t know anything besides performance, and that SLAs (service level
agreements) are met.

Zulkepli: I also have the impression that the moment you are in open
source, you can do your own modifications. How do you do change
management, version control, and updates, when all those are being done
by the vendor today. Must you have a very good change management system
within the organisation?

Kumar: In any organisation doing software development, you must have
policies in place for change and configuration management. If you don’t
have that, managing proprietary or open source is the same. The same
issues apply with source code. That is something that must be in place
to manage versioning. That goes back to IS governance.

Shane: One of my customers has got 5,000 servers. What they do is bring
down the updates from Red Hat, automatically, and put in the development
group which certifies it with their application, then they move it to
the QA group, which certifies the whole solution, and deploy it. Along
the way, they may make some changes, they may not. Certain components
like the kernel, they take from us. They don’t have kernel programmers,
so they pay us to give them the updates. They take the updates, certify
the complete stack, and roll it out. If you don’t want to change your
source code, we have tools that help you do that. It is very
cut-and-dried. We’ve taken the geek out of Linux.
We have a lot of organisations that don’t want to get to that level.

David: There are two issues. One is modifying the source code, the other
is using it. There is a community that is involved in modification of
code. But most of us want to use the system, so we can lock the source
code. Red Hat has a support service which will automatically update your
patches. You don’t need to change code unless it is very specialised.

Asirratham: The other issue is migration, especially if you have Oracle
database. Oracle Applications is tied very close to the database. So,
there is a need to migrate these applications to open source. So, that
is a concern as it takes quite awhile to port those applications which
are tied to the database.

Azbir: The challenge is to move programmers from the Microsoft
environment to the new thing. Doing things in Php and Java will cost us
in terms of time. We needed to get ready by a certain time and had to
ensure that we could get training and development done.
We started within the data centre, with old machines (Pentium III, and
older Pentium 4). After we proved the concept, management gave us budget
to buy newer hardware.

We used the maintenance budget to do development. It was a huge budget
converted to do development, so we saved in terms of development cost.
We utilised whatever we had in the organisation. More money was focused
on the hardware, so that we got the performance we wanted. We went from
Intel to AMD Opteron 64 processors, and we used Suse Linux since it was
supported by our hardware vendor.

We developed a system for purchasing, so we are looking at the padi
processing environment. This is quite tough for a small team, so we
tried to search around for an open source ERP system, so we embarked on
that. We developed a few modules, and we are testing it, and plan to
launch it this year.

Owenby: Open source is a journey, not a trip. If you don’t educate your
people, they are not going to be competent. The open source projects I
know that have failed is because they did not adequately prepare. They
didn’t know it, and didn’t get a vendor involved, didn’t train their
staff, they were destined for failure. When I sell into an organisation,
I target Unix to Linux conversion, because they already have some skill,
and understand what security means. The path is much shorter than
Windows to Linux.

So, I go in and say they have to invest in people now for deployments
they have to do in the coming months. If they are not willing to do
that, then I try to find another account, because I don’t want their
impression of us to be negative due to their lack of preparation. We
have certified training centres in Malaysia, and have staff here. We’ve
invested in Malaysia more than we’ve invested in Russia.

Zulkepli: We currently have two groups of people in IT. The application
people and the systems people. If you embark on open source, will there
be a change in the organisation, so that everybody will have total skill
set compared to traditional compartmentalization.

Singh: When you change your house, the structure of the house is
different, the lights and switches are different. The biggest problem is
discipline. You go and take some of the old furniture with you. Which
disciplines need to be taken forward. We are doing it right now. We need
to make certain changes to the policy because the implications are
different. Changes are both business and IT.

Owenby: There has to be some transition. Humans don’t like massive
change. Developers don’t like to come in one day and find they have a
Linux development environment. So, you are going to have to put them
through some training and a transition period. So, a lot of our revenue
comes form the server side. We’ve had success on desktop Linux in very
special circumstances. Where two things are controlled: the software
stack, and peripherals. We control those two things, and we can provide
a fantastic, secure, manageable, cost effective desktop. Normal
traditional desktops have random peripherals plugged in, software stack
of things. That is not a market we can win in.
It depends on the needs.

Asirratham: We already done with the servers, and now we are looking at
cost savings on the client side. We have 20,000 students. Each student
costs MYR140 (US$38) in Microsoft licence plus Office which is another
MYR200 to MYR300 (US$54 – US$81). Just imagine the amount of savings. We
have 6,000 machines on the campus.

Owenby: OpenOffice 2 is now out and has a lot of the work from the
community done to make it more acceptable to Excel macros and the things
people are used to.

Asirratham: If you know how to use Microsoft Word, you know how to use

Kumar: If you are only looking at Microsoft Office, then OpenOffice is a
good replacement. If you also have a lot of other applications, then it
doesn’t work. We also tried VMware, but it became too unwieldy. It is
good for the developers, but not end users, so we stopped that approach.

Zulkeplie: So, you can’t migrate everything at one shot. There has to be
coexistence. It is process.

Owenby: We are part of a consortium that is about the interoperability
between Windows and Linux. Samba does print sharing. Microsoft keeps
changing code so it is interoperable. We are chipping away. Going
with .Net may limit choice; it may be the business decision to make, but
make sure you know going down the road the implications. Open source is
not the magic dust, but gives an alternative. I am looking forward to
OpenOffice version 3. It will have the features that the community

Azbir: How do you get people to move?

Asirratham: You could reward them with money savings from the licences.
The ease of use is a problem. If I’m used to my kitchen to cook, I know
where everything is. If you come to my kitchen, you don’t know where
everything is, but you will say that my kitchen is unfriendly. The only
way is to get them to use it.

Owenby: Make Firefox the default browser, step one. Later on, introduce
OpenOffice… Let them see what they are going to be using before you send
them for training. Then they will say it is not that different. Then
migrate them out of Microsoft Office entirely, then you migrate them to
Linux. That last step has the peripheral issues, but it depends on what
you are trying to do.

Singh: We use cost to drive change. We say if you want to use something,
it will be charged to your department. It works very well.

Singh: Then you come to licence issues, there is some degree of fear.
The vendors who are trying to bid for that project will confuse people
in the decision making area. For instance, they will tell you it is not
really free… if it is free, there are issues. The company may not be
around. How will they survive? So, that is a concern to directors of the
company, so sustainability in the market is a concern.

Also, most of us are used to the traditional licence approach where you
pay for maintenance, you get upgrades, you get this and that. Then the
question arises with open source, do you get upgrades to these
applications? Because it is free, the source code is given to you, you
do what you want. This, to the traditional user is a stumbling block,
because they will not appreciate what it really means. So, these are
some issues.

Owenby: It is amazing what everyone else accepts as licensing. You pay
for product, then you pay for support, then you pay for concurrent
access licenses. How do you budget for that? With RedHat, it is an
amount of money for a period of time—one year, three years. You know
exactly how much it is going to cost. I can’t believe how much time is
wasted on tracking down licences and things like that.

Singh: I don’t have to worry about BSA coming down and checking on my

Owenby: So, when you look at open source, you have to do your own
evaluation on what’s important to your organisation. Your applications
must be supported, that is critical. There are company’s that support 24
x 7. We have partners who will do level 1 and 2 support, and we do level

So, the ideas and misconceptions of open source may no longer be valid.
They may have been valid in 2000 or 2002, but make sure you are
evaluating open source on the merits that exist today, not what you’ve
understood it to be.

There are two definitions to the word free. There is free as in no cost,
and there is free as in free speech or liberty.

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