Open Source + Off-shoring= Free Lunch

by Noc Team on June 27, 2010

Contributed By Sheikh Abdul Farhan

Did you see that sentence? ”Open Source with Off-shoring, a Compelling Cost Formula”

Let’s break it into parts. Open Source, Off-Shoring, Compelling the Cost.

Now the questions arises here, what are these terms, Open Source, Off-Shoring and compelling the cost of what? And what that sentence means as a whole.

So let’s start with getting the definitions of each and every part and then get into it as a whole.

The word, “Open Source” is typically associated with the filed of Software Development. Open source means, some software with its source code open to all. Confused? Let me clear, it means anyone can play around with its code and can modify this open source product according to his needs under the terms and conditions specified by its developer(s). There’s no licensing cost involved to purchase or edit this Open Source Software/Product. The term “open-source” software originated as part of a marketing campaign for “free software”.

Now, let’s have some discussion on Off-Shoring. Off-shoring describes the relocation by a company of a business process from one country to another—typically an operational process, such as manufacturing, development, or supporting processes. Even state governments employ off-shoring. Off-shoring can be seen sometimes in the context of services off-shoring or production off-shoring.

Off-shoring, in filed of economics and business, is used to reduce the cost of a complete product. Like web developers may be getting $50 US per hour to work on a project. This cost can be reduced by off-shoring this service, like in Pakistan; per hour rates of web developers may be around $30 US. If so, contractors of that web site development will surely go to cheap rates. And hence, it will effect the over all cost of a complete product, which is a website.

This whole process, which includes, Off-shoring for services or manufacturing, and reducing the cost of final product, can be taken to identify the term “Compelling the Cost”.

A famous organization, Standish Group, who’s mission statement includes, “The Standish Group provides IT investment planning research and services, such as, project assessments, requirements optimization, Total Cost of Ownership (TCO), Return on Investment (ROI), Risk, and Value Analysis based on years of high quality, independent primary research”.

According to Standish Group research, open source products are currently fulfilling the around 14 percent of developing a complete product. According to Standish Group further research, this ratio will continue to increase as developers and Managements will realize the need of open source products to minimize the over all cost in terms of money and time as well. Enterprises have realized the fact that using open source products, they do have a chance to develop and deliver the application that normally costs in million dollars at only a fraction of that cost. Hence, enterprises can save up to 25 percent of its cost.

Bringing the off-shoring into it, they can save up to 30 to 35 percent in the terms of manufacturing and maintenance cost and time. According to research of Standish Group, off-shoring is a growing trend. Not only manufacturing and development, but they have also started getting off-shore services for supporting services like call center services, hotlines, and other maintenance services. Around 18 percent of all software maintenance services are being off-shred.

Open Source with Off-shoring a Compelling Cost Formula is very much ‘in’ now a days because not only saving the money, but they are actually giving the product in less time which is helping them to make their goodwill and a good place as a competitor in market even as new comers.

Getting them all together, Open Source with Off-shoring, a Compelling Cost Formula, It is a formula to compel the cost of any project by off-shoring and increase the use of Open sourced products and add-ins, hence, providing the chance to Open Source developers to get a pace in market and save time and cost instead of developing it at your own.

{ 1 comment… read it below or add one }

Muazzam June 30, 2010 at 9:29 AM

Hey Farhan, thats nice… Keep writing good thing…

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