HP claims it has started to make higher margins from open source than proprietary software in some instances, due to the support costs associated with migration.
Speaking to ZDNet UK on Wednesday, HP's open source and Linux chief technology officer Bdale Garbee said that open source margins are sometimes higher than for Microsoft-based solutions. "In some cases, the margin can be greater to us because we can provide a more complete solution to customers," said Garbee, speaking at the LinuxWorld event in London.
Garbee added that organisations that migrate to open source from a primarily Microsoft environment might need more training and support.
Much has been made of the cost-savings associated with open source software. The news that HP could be realising greater profits from the technology will add to the debate on the true cost of ownership of open source.
However, Garbee added that organisations which have skills in Unix could often pick up the necessary skills. "A lot of the fundamental skills for managing a Unix environment apply very well to the Linux platform, because Linux is like Unix in many ways," he said.
Despite the benefits, persuading an organisation to adopt open source often takes a lot of effort on HP's part, Garbee admitted.
"The sales and procurement cycles are long: it's usually a major technology overhaul to decide whether it is technically feasible and to review processes," he said. "But the revenue has a long tail as well. HP can afford to invest and pursue longer life cycle projects, which some of the smaller vendors can't afford to do."
HP is urging businesses to embrace open source, claiming the market for non-proprietary standards is growing fast.
"Interest in Linux is rampant," Garbee enthused. "Everyone is at least looking at it. Interest is very broad," he said, adding that the telecoms sector and governments were particularly interested.
HP's success in the public sector has been relatively muted so far and the company is unable to name any UK government organisations which have purchased its open source offerings.
Several local governments, most notably the London Borough of Newham, have closely evaluated open source before deciding to keep their existing Windows systems.
Talkback
"The news that HP could be realising greater profits from the technology will add to the debate on the true cost of ownership of open source."
Forgive my increasing cynicism about ZDNet's editorial policy, but statements such as this are made on the same day as ZDNet reports "Microsoft beats earnings forecast".
HP profits margins have gfot *nothing* do do with the TOC of open source, but more the prices people are willing to pay for HP services. Think their support services are too expensive go to a competitor. The difference with open source is that you have that choice.
Wrong. Overpriced products and services usually beat earning forecasts when desired so.
That HP can reach better profit margins might have something to do with not having to offload premiums to certain vendors depanding on the solutions offered.
Less overhead (or mandatory fees), more savings.
And if it also helps the end customer overall TCO then all the better.
1 + 1 can be 3 if you happen to choose the right 1's.