Open Source

Linux helps ease the burn of operational expenses

Managing costs is just part of the process of reaching or sustaining profitability. Learn how one economizing IT director from the nonprofit world uses Linux to curb expenses and consider what this case might mean for your own firm's bottom line.

Profits are the driving force of most organizations, and when operational expenses are cut, chances are good that concerns about profitability are the reason. But cutting costs isn't a challenge exclusive to firms with anxious shareholders looking for dividends. Universities, philanthropic organizations, and even the federal government bear the burden of trimming expenses to improve bottom lines.

As many of you know, managing costs in the IT department is not an easy undertaking. Staffing, ever-changing hardware requirements, and expensive software licensing all contribute to an IT department’s operating expenses. However, when one IT director applied his past experience with Linux to his current job with a charitable foundation, the organization enjoyed cost savings across several expense categories. This article highlights how one economizing IT pro uses Linux to save cash—a plan that could boost earnings at for-profit enterprises as well.

Alternative OSs: Love at first sight
Before Ricardo La Motta joined The Edna McConnell Clark Foundation (EMCF) as its IT director, he was responsible for communications between international branches of a major financial institution. The company was paying several hundred thousand dollars per year in licensing fees for its money tracking operations. La Motta was specifically concerned about the licensing costs of IBM's AIX OS, which were more than $100,000 per year.

However, after successfully transferring several operations over to UNIX, the company was able to stop paying a lot of the previous licensing expenses. The UNIX changeover was easy, saved money, and made La Motta an advocate of all free and alternative software options.

The flagship project
In addition to his responsibility for managing the day-to-day IT operations at the nonprofit foundation, La Motta said that bringing control of the Foundation's Web site in-house was one of the greatest challenges of his job. According to La Motta, such a project wouldn't be especially noteworthy under many circumstances, but "we had to provide staff an easy-to-use publishing system that requires no special computer expertise, all within a very constrained budget."

In short, the Foundation staff needed to be able to push new content to the Web site without having to rely on dedicated IT staff. Initially run by Edna McConnell Clark, the daughter of the founder of Avon Products, the foundation provides money to help organizations that target four areas: the poor, the elderly, children, and the developing world.

Linux takes off
Using his past UNIX experience and the help of an assistant and an outside Linux specialist who donated a great deal of his time, La Motta created a Linux firewall, Web server, and mail server on legacy server boxes. The additional cost of the project up to this point was almost zero.

"Compared to our preexisting Novell infrastructure, the Linux system was far more stable and we did not have (in-house) CNEs on the telephone with Novell trying to decipher troubles," La Motta said. "We decided that Linux could get us the Web site we needed."
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Moreover, the Linux-based Webalizer site-tracking tool provided foundation employees with demographic information on visitors to their site so they can determine potential benefactors.

La Motta and his team integrated a MySQL database and crafted the site with php programming. In addition, they created a php-based user interface that serves as a kind of template for nontechnical employees to publish content to the site.

"Before we did this, outside consultants were submitting plans to make this kind of project happen with Microsoft servers and Oracle databases for $100,000,” he said. “In addition, we were looking at a similar figure in total annual maintenance costs."

With La Motta's Linux implementation, the Foundation saved $80,000 initially and can rely on few additional costs in annual maintenance because everything is done in-house. The only additional cost is a small monthly retainer fee that La Motta pays to an outside Linux consultant in case of some catastrophe.

Barriers to adoption
La Motta thinks that an overreliance on consultants is the reason why more organizations aren’t using Linux.

"Consultants often have incentives to introduce certain software or hardware products," La Motta said. "If you're talking to Company A doing consulting, most likely they are staffed to support big systems like Oracle or Microsoft or whoever. Naturally, firms are going to accept what systems they [the consultants] have in mind. I don't see Linux being promoted at that level."

Beyond the nonprofits
La Motta's experience in both the financial services industry and the nonprofit sector clearly illustrates the cost-saving capabilities of freeware like Linux. For enterprises feeling the burn of their operating expenses, La Motta believes that these kinds of cost-cutting measures should accompany budget evaluations of all groups within a company, including staffing, advertising, and research and development. IT projects don't have to be costly as long as the knowledge and will is there to find new solutions.

Linux in your enterprise
Has Linux saved your organization money and boosted the bottom line? Do you have an interesting implementation story? Post a comment to share your experiences with other TechRepublic members.


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