A very interesting post over at EMERGIC.org on storage costs. Rajesh says we are at about $1 per GB of raw, bare metal storage. The cost of a gigabyte in the EMC Symmetrix DMX800 in the data center I manager is about $4 per month, or $48 annually. To be fair, my $4 per month includes the frame, software to manage the storage, and maintenance in addition to the raw disk. However, I just received a quote to add more disks to an EMC frame. If I were to buy just the raw disk from EMC it would be at a cost of $19 per GB. Of course the type of drive that costs $1/GB is very different (ATA or SATA) from the drive that costs $19/GB (SCSI). However, I find it hard to believe that it costs nineteen times more to produce and sell a SCSI drive than an ATA or SATA drive. There are some interesting economics going on here.

posted: 7:22:49 PM  permalink  trackback ()  comments ()    

A part of the conversation I have been having with my colleague included the development of a graphic below, which was originally written on a napkin. The point of this graphic is that there are two market segments that will readily adopt Open Source software for their projects and contribute back to the Open Source community. Those two segments represent the two ends of a bell curve. At the low end of the bell curve are independent or small businesses that cannot afford enterprise solutions due to cost. At the high end of the bell curve are organizations that find enterprise solutions too restrictive and have significant funding available to produce highly customized solutions on their own. The middle of the bell curve represents the enterprise market. The reason the enterprise market is reluctant to adopt Open Source software and solutions are that these solutions require expertise to maintain that they are not willing to keep on staff, namely more people with specialized skills. The majority of the enterprise market does not see technology as being a core competency.

(Click on image to see a larger version.)

This diagram will not change until the "trusted technology advisors" (a term which I despise) can put Open Source in business terms, namely operational cost savings. What do you think?

posted: 6:15:38 PM  permalink  trackback ()  comments ()    

Why would you open source something in the face of huge profits? I have been having a conversation with a colleague of mine on this very topic for a couple of weeks now. My answer to him is that you would only open source a software package in two instances. One, when there is no money to be made but many people would find value in the software as a utility, such as MRTG and even PERL. Two, when open sourcing the software serves as a catalyst for increased revenue and profits, such as Mac OS X and UserLand's Frontier kernel. In case two the potential revenue and profits must be exponentially greater than retaining the intellectual capital contained in the source code. Unfortunately, the jury is still out on case two as hard numbers have not come in to validate this model. What do you think?

posted: 5:23:40 PM  permalink  trackback ()  comments ()