Open Source Software: The Hidden Cost of Free


Recently, Michael Skok wrote that “open source is eating the software world.” As general partner at North Bridge Venture Partners, Skok should know. He’s witnessed the power of open source as an entrepreneur and VC. And he’s seen the positive, long-term adoption trends revealed by the annual “Future of Open Source” survey sponsored by his firm and others.

While not entirely hyperbole, Skok’s claim raises a fundamental question: Should you let open source eat your software world? Maybe.

If you’re an ISV or if software development is central to your company, some degree of open source adoption is almost a foregone conclusion. But if software development is not a core competency for your company, then using commercial software may still make sense.

In the spirit of full disclosure, my company develops commercial software. We are also one of the vendors who’d get displaced if IT departments decided to replace packaged IT management software with freely-available, open source alternatives. So I’ve got a dog in this fight, so to speak. I’m just not convinced that this particular fight is “winner takes all.” Here’s why.

Build or Buy – You Pay Either Way

As suggested above, not everyone has the desire or the skills to support, maintain and even enhance a software solution. And that’s what you’re doing with open source: You’re responsible for maintaining, enhancing and customizing the application to meet your needs.

Think of commercial software as a house and open source software as everything you need to build a house — raw lumber, nails, sheet rock, windows, plumbing fixtures and the rest. You can spend your money and buy the house, or you can spend your time and build the house. Either way, you pay for your house.

Like a do-it-yourself house, you are on your own if something goes wrong with your homegrown, open source application. Yes, you’ll find plenty of free help online. Too much help, perhaps, and that may lead to one or more wild goose chases as you hunt down and fix the problem yourself (think many, many trips to the Home Depot). But that’s a key dividing line between buying commercial software and building your open source solution.

Free, open source software may be a cost-effective alternative on the front end of an application development project, but you’ve got to factor in the costs of the ongoing maintenance and support as well as the up-front development to get the project’s true cost — not to mention business risk.

Swapping Application Lock-in for Vendor Lock-in

One of the chief advantages of open source software is that it frees you from vendor lock-in, which makes it extremely difficult and expensive to switch off a vendors’ proprietary commercial app. In fact, “freedom from vendor lock-in” ranked as the number one reason to adopt open source software in the 2011 and 2012 Future of Open Source surveys. In the 2013 survey, “freedom from vendor lock-in” was number two, edged out by “better quality software” in the number one slot.

Am I going to argue in favor of lock-in? No, but you’re still locked in with open source software, just not to the vendor. With open source, you’re locked in to your app. After you’ve opted for an open source app, it’s up to you to provide ongoing maintenance, upgrades and troubleshooting, as well as any needed end-user support. Congratulations! You’re now a software vendor. The high switching costs of commercial apps are now replaced by the high costs of supporting open source apps.

Bottom line, open source may be “eating the software world,” but not all of it. For ISVs and other software development professionals, open source is a no-brainer. We use it in development and in our commercial products wherever and whenever it makes sense. It is free, after all, and the quality is second to none, as this year’s Future of Open Source survey reinforces.

But software pros have resources in place to support their open source efforts. Your organization may not be so lucky, or it may not be interested in putting them in place. After all, not every company has acquired an appetite for open source.

As published on http://www.forbes.com/sites/rajsabhlok/2013/07/18/open-source-software-the-hidden-cost-of-free/

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About Shailendra Nair

AI Generalist & Executive Tech Leader in Insurance & Benefits Tech. Driving growth, trust, and resilience from AIG to Marsh McLennan. I am an AI Generalist and Executive Technology Leader with a career dedicated to reimagining how insurance and benefits ecosystems work in a digital first world. My expertise spans Insurance & Benefits Tech, digital transformation, and cybersecurity, with a proven ability to turn technology into both a growth engine and a resilience enabler. I have worked with global leaders such as PepsiCo, Allianz, AIG, and Marsh McLennan, experiences that gave me a rare mix of perspectives across insurance carriers, broking, and benefits advisory. This combination allows me to design solutions that balance global standards, local compliance, and client expectations while driving measurable business value. My strength lies in full stack insurance technology leadership, covering Property & Casualty, Life, and Benefits. I bring hands-on expertise in infrastructure, cloud, security, and enterprise architecture, combined with data platforms, AI automation, and digital ecosystems. Having led across this spectrum, I can translate complex technology into practical outcomes that deliver trust, scale, and innovation. As an AI Generalist, I focus on impact: • Building automation first operations that scale efficiently. • Designing chatbots and intelligent assistants to empower employees and clients. • Deploying AI-driven QA frameworks to improve speed and accuracy. • Exploring agentic AI roles to support compliance and transformation. My philosophy is simple: technology should reduce friction, inspire confidence, and accelerate growth. I design platforms that enhance sales, revenue, and client stickiness, proving that tech can directly enable business outcomes. At the same time, I remain deeply client centric a solution enabler who thinks out of the box to solve real challenges and deliver measurable ROI. 🌍 What excites me most is reimagining benefits ecosystems for the future of work. Employees demand seamless digital first experiences, organizations need efficiency, and regulators require trust and security. My mission is to build ecosystems that are secure, resilient, innovative, and human focused.
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