Open source software has gone far beyond the Linux operating system, and is found in all parts of the technology infrastructures of most U.S. organizations (both corporate and government) and has resulted in cost savings for companies of all sizes, a research study led by Optaros Inc. has found. Emboldened by cost savings and other benefits, these companies expect to use significantly more open source software over the next five years and decrease their use of commercial software packages in their organizations.

The study was conducted in August and September 2005 with responses from 512 U.S. companies, government agencies and other organizations. Sampled companies ranged in size from small organizations with revenue under $50 million to large organizations with revenues over $1 billion. The study found that the clear majority of organizations (87%) were using open source systems, software often available for free and built by communities of software developers. The most frequently-used open source software was the Linux operating system, the Apache web server, and web browsers, used at some level by more than 70% of the companies represented by the survey participants. About half the respondents were using open source database management systems and application servers in a single business function.

Gaining in popularity were open source business applications software such as portals and content management systems. Some 42% of the survey participants had open source portals and content management systems that supported a single function. Some 16% used open source customer relationship management systems, a percentage that will double in the next three years.

“The study shows that a substantial number of companies are aggressively using open source, and increasingly for industrial-strength applications software,” says Stephen Walli, Vice President of Open Source Development Strategy at Optaros. “The benefits of open source systems — less-expensive, more secure, faster to develop the best-fit business solution, and easier-to-customize software — are too hard to ignore in a time in which organizations must balance the demand for IT with budgetary restrictions.”

The move to open source software is in part explained by the cost savings that companies are generating. Organizations with annual revenue of more than $1 billion saved an average $3.3 million in 2004 from their open source software. Medium-sized companies (with revenues between $50 million and $1 billion) saved an average $1.1 million, and companies less than $50 million saved about $500,000. Several survey respondents reported substantial savings: a technology company cut costs by $20 million, and four companies (three of them telecommunications firms) each saved $10 million last year.

The study found that once organizations start using open source software, their usage typically increases. However, the study also found that most companies were confronted by four primary barriers to achieving even greater benefits:

Uncertainties about open source software that often relegate the software to the IT function

Lack of understanding of licensing and legal issues around open source software

Software cost allocation policies that discourage business functions from reducing the cost of commercial software

The difficulty of identifying, evaluating, purchasing and maintaining open source software

The survey was conducted with InformationWeek magazine. The results for small organizations were released in October.

About Optaros Optaros Inc. (www.optaros.com) is a venture capital-funded consulting and systems integration firm that helps large enterprises use open source software and global sourcing to reduce the cost of commercial software and rapidly build high-quality, cost-effective and more flexible business applications. From offices in Boston, Geneva and Zurich, and with off-shore delivery partners, the firm provides a range of services necessary for enterprises to maximize the benefits of open source software — to replace existing costly proprietary software or to build new business applications. Having launched two of the most successful IT service companies of the last two major shifts in technology, Optaros´ management brings substantial expertise to creating a company that can help clients fully adopt new technology models and platforms.