Open Source Software Costs: The Wal-Mart View
August 24, 2014
Which is more economical? Proprietary software or open source software? Which approach delivers greater “value”? In Wal-Mart’s tussle with Amazon, will it deliver a better online experience for shopping, search, and logistics? I ask because the Wal-Mart closest to Harrod’s Creek has fewer products, dimmer lighting, and restocking challenges in my experience.
Some information that may help answer these questions appeared in “Wal-Mart’s Investment in Open Source Isn’t Cheap.” Note that this publication is owned by IDG / IDC the mid tier consulting firm that sold my content on Amazon without my permission. Some details are at this link.
This write up explains that open source software is more than a price:
Wal-Mart has put in place a set of metrics to estimate the return on investment. Hammer explains “every five startups using Hapi translated to the value of one full-time developer, while every 10 large companies translated to one full-time senior developer.” In return for its extra work on open development, Wal-Mart gets high-quality programming at a cost far below that of recruiting and retaining extra staff. In turn, this demonstrable return allows the company to justify further development investment because “by paying developers to work on Hapi full time, we get back twice (or more) that much in engineering value.”
Wal-Mart, however, is a place that sells stuff at what looks like low prices. There are some legal arabesques related to Wal-Mart’s parsimonious streak.
Three questions:
- Is Wal-Mart looking for ways to obtain maximum freedom from traditional vendors, not just value or cost savings. Freedom can translate to handling software the Wal-Mart way?
- Will developers find themselves subject to the same cost parameters that Wal-Mart has honed to deliver its competitive prices?
- How will Wal-Mart adapt when an open source project loses its community?
With Amazon looking more and more proprietary, Wal-Mart seems to be heading in the opposite direction. Will Wal-Mart out Amazon Amazon or will Wal-Mart become more like Amazon?
The search experience for both Amazon and Wal-Mart online is often frustrating. Perhaps in a few months one of these discounters will crack their information retrieval nuts.
For those looking for information about the cost of open source, the Wal-Mart approach is worth tucking into one’s card file.
Stephen E Arnold, August 24, 2014
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