Newham Council IT leaders face backlash for choosing Microsoft over open source

Microsoft vs open source trials highlight complexity of cost calculations

Microsoft vs open source trials highlight complexity of cost calculations

Newham Council's decision earlier this month to opt for Microsoft, rather than open source technology, surprised many IT professionals and angered open source advocates. It also highlighted the complexity of deciding between proprietary and open source software strategies

When the council's head of ICT Richard Steel decided last year to pit open source software against Microsoft products in a prolonged trial it was seen as one of the most important tests yet of the viability of alternatives to proprietary systems.

The council, which had a Microsoft Windows NT4 infrastructure, commissioned an independent study from consultancy Netproject to examine the cost of switching to and running an open source environment.

Netproject suggested an approach based on a mixed Microsoft/open source environment. It estimated this would cost £443,000 in licences for Microsoft's thin client Terminal Services on the desktop, connected to Linux servers where possible.

Microsoft was invited to propose its own solution to meet the council's infrastructure needs, and it commissioned Capgemini to report on the options.

Microsoft prepared an estimate for the council based on a TCO model from Gartner, which was reviewed by Capgemini. This estimated migration and deployment cost to upgrade to a strategic Microsoft platform was approximately £1.3m, excluding software licensing fees.

The ramifications of Newham's decision to sign up to a 10-year strategic relationship with Microsoft will be felt for many months to come, but one thing the trial has highlighted, according to Gary Barnett, research director at Ovum, is the complexity of total cost of ownership calculations and of fundamentally changing an enterprise's IT strategy.

"The Newham trail shows that the cost of ownership story is not clear," said Barnett. "It is not true that Linux will always give significant total cost of ownership savings. Any organisation considering a fundamental overhaul of its IT structure should look at the whole range of options available, including more effective management of Windows, thin client technologies and open source solutions."

Newham's choice: three options proposed by Netproject

The Netproject study commissioned by Newham Council proposed three alternative IT strategies: 

  •  Using thin client technology based on Windows Terminal Services to run Windows applications. Netproject estimated that, for 5,400 users, the cost would be £200,000. In addition, the council would have to pay licence fees for desktop application software such as Microsoft Office. 
  • A hybrid set up. The Netproject study established that a pure open source option would not be practical for the council. However, it recommended using open source desktop applications where possible and Windows Terminal Services to run the remaining Windows applications. The cost over two to three years was put at £443,000. This was Netproject's recommended option. 
  • A full-scale upgrade to the latest Microsoft software. The Netproject report warned Newham about the security issues relating to the Microsoft environment and the need to replace a large number of desktops. Netproject estimated the cost of Microsoft licensing would be £1.75m a year for 5,400 desktops, Office and client access licences for Microsoft Systems Management Sever and Exchange 2003.

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