RUNNING AN ENTERPRISE ON LINUX
 

From PeopleSoft to OpenMFG and beyond, ERP software is moving on to Linux.


by Nancy Cohen

May 19, 2003
 
     
  Everybody’s heard the “yes, but” Linux story: Linux is gaining traction as an operating system of choice for high-performance computing and web serving, but is still in dormant stages for enterprise software applications. This month, the story became “no, that’s nonsense” with PeopleSoft’s May 6 announcement that it too is jumping on the Linux bandwagon.

The extent of that jump is quite broad. PeopleSoft is moving all 170 of its business applications on to the Linux operating system. The new options will debut in the fourth quarter of this year, running on a platform that includes Red Hat Linux, along with IBM’s xSeries hardware, DB2, and WebSphere Application Server.

 
         
  PeopleSoft has a talent for reinventing itself as needed according to business change. Once compartmentalized as ERP vendors, PeopleSoft takes on a broader identity, and promotes its competency as providers of enterprise application software. That Linux evangelists see the May announcement as a significant step forward, pushing Linux in the mainstream, is understandable: PeopleSoft makes programs that manage large businesses’ HR, customer relationships, supply chains, and more. Its promotional material says that over 5,100 organizations in 140 countries are running PeopleSoft software.

This week, Open talks to PeopleSoft’s David Sayed, Technology Product Marketing Manager, for further details on what led the company to adopt such an aggressive Linux move.

Was there a time when, if anyone told you that your CEO would be standing before an audience and referring to Microsoft’s death grip and calling .NET toxic, you would have said, no, you’re crazy?

SAYED: In this business, you never want to say that anybody’s crazy; that is what makes it interesting. For the past couple of years, actually, we were starting to see more and more interest in Linux, and that interest has been matched with the maturity of the Linux operating system. In corporate America, actually everywhere at this point, people have gained comfort with Linux.

We’ve read that the Linux distribution to which you will port the applications will be Red Hat Linux. Why did PeopleSoft choose Red Hat?

SAYED: We’re initially supporting Red Hat because that’s where we see customer demand, but we would not rule out any other in the future. Customer demand is what directs us overall. We want our customers to dictate the technology.

Your CEO makes it quite clear that PeopleSoft is not in favor of dependency on Microsoft software. What is PeopleSoft? Sun-centric? HP-centric? IBM-centric?

SAYED: Solaris, HP-UX, AIX, Microsoft, any. The reality is that today’s IT environments are very heterogeneous. If we were to standardize on one platform, it would be a problem. In our marketing materials, and in the way we interact with our customers, we show that we work with different platforms.

Your CTO has been quoted saying several Wall Street banks were among the customers that persuaded PeopleSoft to release the Linux versions. How confident is PeopleSoft that other industries are as ready for Linux as are the banks on Wall Street?

SAYED: It’s not just Wall Street. Well-known companies in other sectors such as retail, high technology, and manufacturing tell us they are moving to a Linux-based infrastructure, not just financial.

What’s your assessment of the significance of PeopleSoft's move toward the adoption of Linux?  Is it a ‘first’ of any sort in the software industry?

SAYED: Yes. It is a first. We are moving all of PeopleSoft’s applications, not just a certain subset of applications, to Linux. It represents a broad commitment to Linux on the part of an enterprise software vendor. It goes a long way to make the statement that Linux is ready for enterprise applications, rather than only edge-type projects.

 

The party doesn’t stop with Linux
by Ned Lilly, president and CEO of OpenMFG

PeopleSoft recently turned heads when the high-end ERP vendor announced its decision to port its products to a Linux-based architecture. At the time CEO Craig Conway declared, "Unix broke the dependency on IBM mainframes, and Linux will break the dependency on Microsoft."

He was right to refer to the unhealthy dynamic between ISVs and Microsoft as a "dependency." In their dependence upon Microsoft for the building blocks of their product, vendors place their destiny in the hands of a competitor with effectively limitless resources. Saddled by continued dependence, they have neither control over their own destiny nor that of their customers.

PeopleSoft joins a growing list of ISVs that have embraced Linux on the server and in the data center, including rivals SAP, Oracle, and JD Edwards. But Open Source doesn’t end with Linux, and here’s where the PeopleSoft news is more mixed. The company went on to say, “PeopleSoft has selected IBM eServer xSeries, DB2 Universal Database, and WebSphere Application Server as its Linux development platform of choice." So while the new products will run on the Linux operating system, upper layers of the software component stack will contain proprietary products from IBM.

IBM has had a fair amount of success in persuading ISVs to embrace the DB2/WebSphere platform. What’s more, the company's very visible embrace of Open Source software such as Linux, Apache, and Eclipse has been a brilliant tactical thrust to support the company’s overall strategy to sell hardware, infrastructure software, and services. But let's be clear: Vendors who move from Windows, SQL Server, and .Net to Linux, DB/2, and WebSphere are not solving the fundamental problem of "dependency." In fact, one could quite reasonably argue that they are just trading one dependency for another. ISVs along with their customers, partners, and VARs should look to their own self-interest, and know that there are some outstanding alternatives further up the "stack" in the world of Open Source. The party just doesn't stop with Linux.

My own company has an ERP application, OpenMFG, whose server runs on Linux and PostgreSQL database. The GUI client was developed with the Qt framework for C++, which gives us the ability to support Linux as well as Windows, Mac OS X, and various commercial Unix flavors on the desktop.

Our product does not satisfy the OSI definition of Open Source. We own the code outright and don't make it available for free to everyone who wants it. We make the source code available to customers and partners. Furthermore, we encourage product enhancements at source-code level by either group. Doing so means that partners can better meet customers' individual needs.

Elsewhere there are fully Open Source application alternatives.
Compiere is a CRM and ERP for small-medium enterprises.
SQL-Ledger is a double-entry accounting system in Perl.
GNU-e blueprint is an ambitious work in progress.

Whether one chooses our company’s product or any other, two things are becoming clear: Standards-based open-architecture ERP solutions are especially compelling in smaller business markets, where they are gaining a strong foothold. What’s more, opportunities for business software built on Open Source components need not stop at the operating system level. The estimated total cost of ownership for  open-stack ERP solutions vs. a proprietary are quite telling. The availability of application source code significantly reduces implementation time and costs.

Costs and Fees Proprietary ERP Open Stack ERP
License: 15 users and server $50,000  

$20,000

Database $10,000   Included

Additional component licenses

$10,000   Included
Implementation $90,000
60 days @ $1,500

$30,000
20 days @ $1,500

Total upfront cost $160,000

$50,000

Total recurring cost $12,600/year
18% of license fees

$20,000/year

Upgrade to next major release

$30,000
60% of original license fee
Included
5-year TCO $253,000 $130,000

TCO Source: OpenMFG