Is Office 365 really cheaper than going open source?
At first glance, the claim your business could make substantial savings by switching from free open-source software to a subscription-based service might seem unlikely.
Yet that is what a Microsoft-commissioned report argues, predicting the cloud-based productivity suite Office 365 could be almost 80 percent cheaper than relying on the open-source OpenOffice.
The claim certainly generated plenty of headlines about the benefits of moving from OpenOffice to Office 365. However, it seems that some of those savings are specific to the local authority in question, and the bulk of the cost difference between the two systems would diminish over time.
The costings were based on an an interview with the CIO at the town of Pesaro in Italy, which moved just over 500 employees to OpenOffice in 2011 but which in 2014 began work to switch to Microsoft’s Office 365.
The CIO Stefano Bruscoli estimated that some employees were losing up to 15 minutes each day to issues related to using OpenOffice. These problems included having to spend more time reviewing and formatting documents and OpenOffice’s slow speed when working with in-house systems.
Yet, according to the city of Pesaro, the number of employees losing time from their working day would fall every year after they began using OpenOffice. In the first year a maximum of 350 users would be affected, 250 in the second, 150, in the third and 50 in the fourth. From the fourth year onwards it predicted no more than 50 would be suffer this daily productivity loss.
In this projection, as the proportion of workers losing time to OpenOffice falls over time so does the cost of using OpenOffice. This diminishing cost isn’t readily apparent from the Microsoft report – which shows the same cost per user of OpenOffice in year one as in year five.
The cost breakdown in the Microsoft-commissioned report.
Image: Osservatorio Netics
In contrast to the €530.58 cost per user for OpenOffice, the report predicts that the cost per user for Office 365 over the same period would be €111.98, which Microsoft uses to support its claim that organisations running Office 365 can save 80 percent over OpenOffice.
However, Paolo Vecchi, CEO of open source specialists Omnis Systems, points out that – rather than showing the long-term running costs of the competing systems – the study reflects costs associated with transitioning to new software, costs which diminish as the system beds in.
“For years four and five the number of users [affected] will become 50,” he said, citing the town of Pesaro’s estimates that the number of users affected by productivity losses would fall to a maximum of 50 within five years of the authority transitioning to OpenOffice.
“Even if you’re not technical you just say ‘We’ve made the effort, we went through hell, but finally we’ve done it, everything is working fine’.”
The cost of switching systems can be exacerbated when moving from Microsoft software to an open-source alternative, which Vecchi refers to as ‘breaking vendor lock-in’, but he still struggles to see how those one-time costs would reach €313,307, as stated by the town of Pesaro.
Vecchi also questioned why a council that said it had suffered an initial loss of productivity after moving to a new office suite would then impose fresh disruption on staff by moving to Office 365.
So why does the report portray the cost per user as being the same in year one as year five? Osservatorio Netics, the Italian consultancy that produced it, explained the figure of €530.38 as reflecting the average cost per user over the five years rather than over individual years.
“We chose to show an exemplar year, a model,” said a spokeswoman for the organisation.
“The calculation takes into account that the costs of the first year are higher than fifth, giving precisely an average between five [years].”
An outdated comparison?
Another issue when it comes to the cost comparison is the age of the software used by the city of Pesaro.
The town reports that OpenOffice was prone to crash when used with its in-house systems and those crashes were factored in when considering how much OpenOffice had cost the council in lost productivity.
But while moving to a more recent version could have cut crash-related losses, in 2015 the council was still using a version of OpenOffice dating from 2010 to produce documents – according to metadata from its documents.
Metadata showing a version of OpenOffice dating from 2010 was used to create documents by Pesaro staff in 2015.
“The report once again doesn’t explain why the council had so many problems but nowadays, after four years, we see evidence that they are still using them [the same version] and they never bothered upgrading,” said Vecchi.
When asked why the council had not upgraded to a newer version of OpenOffice to try to rectify some of the problems it reportedly had, the Netics spokeswoman said: “The migration is still in progress, all users are moving to O365 [sic].”
Other features of the report stand out to Vecchi, such as the claim that it cost the council €291,000 to convert “initial files”.
The report explains this figure was so high because the council kept running Microsoft Access databases and Microsoft Excel on some systems, which in turn incurred costs related to converting Excel Macros and to using the Access database.
The council said it had to keep running this Microsoft software because of incompatibility between OpenOffice and its in-house systems.
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