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Giga: Microsoft Has Better TCO Than J2EE/Linux

Microsoft Windows shows a clear cost advantage over Linux for developing and deploying custom portal applications, according to a new report released by Giga Information Group Tuesday.

The report, "The Total Economic Impact of Developing and Deploying Applications on Microsoft and J2EE/Linux Platforms," was commissioned by Microsoft.

"The comparison of the two platforms shows large to medium-size organizations that develop, deploy, support and maintain custom applications on the Microsoft .NET platform can expect to experience 25 percent to 28 percent less cost during a four-year life cycle than if the J2EE/Linux platform was used," the report, penned by Giga Vice President John Rymer and Bob Cormier, senior consulting advisor -- TEI, noted.

The study was based on interviews of 12 companies: seven organizations that use the Microsoft .NET-generation platform to develop and deploy custom applications, and five organizations that use Linux. Based on the information gathered, Giga posited two composite organizations -- a large enterprise and a medium-sized enterprise -- developing and deploying custom applications using either J2EE/Linux or the Microsoft .NET platform.

Giga said that for the large enterprise, the total costs associated with the initial development and deployment, plus three years of support and maintenance, on J2EE/Linux were about $2.2 million. Using the Microsoft .NET platform, Giga said the costs were about $1.6 million.

"Giga found that for the large sample organization, the total costs associated with the initial development and deployment, plus three years of support and maintenance, were $645,929 less using the Microsoft platform. Microsoft's total costs were 28.2 percent less than the total costs for J2EE/Linux. The primary driver of this difference is a shorter time to deployment for Microsoft -- nine months vs. 12 months for J2EE/Linux," the report said.

For the medium-sized enterprise, Giga said total costs associated with Linux were $881,455, versus $661,012 for Microsoft.

"Giga found that for the medium-size sample organization, the total costs associated with the initial development and deployment, plus three years of support and maintenance, were $220,443 less using the Microsoft platform. Microsoft's total costs were 25 percent less than the total costs for J2EE/Linux," the report said.

The report also noted that the Linux operating itself was not what contributed to the higher overall costs of using Linux. Instead, it said it was the J2EE application server and Unix-based database software used in the Linux development and deployment stack that drives up product costs and development complexity relative to the comparable Microsoft products.

"It is only when the low prices of Linux are put into a larger IT context that their true impact on IT costs becomes evident," the report said. "In a head-to-head comparison, the list price for Red Hat 9 (the Linux version chosen for this study) is lower than the price of Microsoft Windows Server 2003. However, the key cost factor in the study's Linux cases was the J2EE environment, not the operating system. Although the cost of Linux is low, the impact of that lower cost on the overall cost economics of an application development project is small. The full development and deployment environment and the labor associated with the development project are the biggest costs. Comparisons of individual elements within the stack of software products required to build and deploy a complete application tell only part of the story and can be misleading."

Despite that, Giga concluded that many organizations will still adopt Linux over Microsoft, largely because they see migration from Unix/RISC to Linux/Intel as their best opportunity to reduce costs while retaining their investment in Unix skills. Indeed, the firm said that for Unix shops seeking to move an existing Unix application off RISC hardware to less costly Intel hardware, the least expensive option is Linux on Intel servers, not Microsoft on Intel, because switching out Unix for Microsoft would require investment in new systems infrastructure, new skills, and possibly replacement applications.

The study also found that J2EE shops often preferred open systems to platforms from a single vendor, because they see open systems as the best way to avoid vendor lock-in and assert architectural control.

For the study, Giga posited that the large enterprise sample organization was a service company with a single data center running applications that automate ordering, accounting, human resources and other internal operations, while also providing electronic interactions with customers, agents, employees and suppliers. Giga said the sample organization provided services to consumers both directly through a Web site, as well as indirectly through a sales channel.

The organization's project was a portal application that would support 1,000 concurrent internal users, and grow to 4,000 by the third year. It would also initially support 1,000 concurrent external users, growing to 6,000 users by the third year.

Meanwhile, the medium-sized sample organization Giga created ran multiple departmental applications similar to those used by the large enterprise. Initially, its project was a portal application that would support 100 concurrent internal users, growing to 150 by the third year. It would also support 250 concurrent external users, growing to 400 by the third year.

Giga said that is used the vendor list prices of the products in its analysis in order to create uniform models for representing cost economics. For instance, it said it assumed used Microsoft Windows Server 2003 for the application (on the Windows platform) and used Microsoft's list price for licensing that product.

"Other scenarios may yield different comparative results," the report said. "A major alternative scenario, for example, is the rehosting on Linux of packaged applications or existing applications running on Unix and RISC hardware. That scenario is outside the scope of this study."

In related news, Gartner Tuesday released a study which claimed that Linux on the desktop is not a cost-effective alternative for most enterprises looking for savings.

The firm said that while Linux has had success in the server market reducing costs, enterprises should not expect to recognize savings by migrating their Windows desktop platforms to Linux.

"Many servers are dedicated to running a single application; in many cases, it has been relatively easy for enterprises to replace specific servers, such as a Web server, and implement Linux," said David Smith, vice president and Gartner fellow. "However, the environment for Linux on the desktop is significantly different. Knowledge workers use PCs to run diverse combinations of applications. For those users, migrations costs will be very high because all Windows applications must be replaced or rewritten."

The study, Linux on the Desktop: The Whole Story," found that migrating PC desktops to Linux made sense in a narrow, limited range of situations -- such as if there are relatively few applications and those applications are fixed- or low-function, like data entry, call center or bank teller/platform automation.

"Understanding the current TCO and the expected Linux TCO can help an enterprise determine the estimated migration savings," said Michael Silver, vice president and research director at Gartner. "When calculating such costs, it is important to realize that the cost of the PC and client operating system represents only a small part of the overall TCO -- generally 20 percent to 30 percent -- and that other costs such as labor, training and external services must be considered."

Silver also noted that firms considering a migration should compare the costs of migration to the costs of upgrading to a newer version of Windows. He noted that migrating to Linux may show better benefits than upgrading if the firm currently runs Windows 95.

"The TCO of Windows 95 is relatively high and increasing because support from Microsoft has been eliminated and support from independent software vendors and other third parties continues to wane," he said. "Therefore, enterprises running Windows 95 will likely see more benefits by a move to Linux than will enterprises using Windows 2000 or Windows XP. Windows 2000 and Windows XP include more modern technology than Windows 95 and are generally more stable and incur lower costs."