The Bank, the Budget and the OS Shocker

Well the FUD continues to flow fast and furious here in the Linux blogosphere, where local pharmacists have recently noticed a sudden surge in demand for blood pressure medications.

No sooner did Linux fans begin to calm down after the recent attack on open source in general, in fact, than a fresh report arrived from down under that caused tempers to flare up all over again.

“ME Bank picks ‘cheaper’ Microsoft stack over Linux” is the title of the report by ZDNet Australia, and the result has surely violated physicians’ orders for numerous blogosphere residents. “Calm and quiet” have gone out the window, replaced instead by an atmosphere filled more with anger and mayhem.

‘That’s All They’ve Got’

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“It’s complete and utter bunk,” began Linux Rants blogger Mike Stone, for example. “The public statements by ME Bank have been ‘joint’ statements with Microsoft, and Microsoft even features this particular case on their ‘Case Studies’ page on”

The bank “declines to reveal even small details such as which Linux platform they were considering!” Stone added. “If you’ve done a thorough and unbiased study and come to a result you’re confident is right, you’re not concerned about revealing the details of that study.

“No, from what I can tell everything pointed to Linux being less expensive, but ‘based on our past experience, we knew that it would cost more,'” Stone concluded. “That’s all they’ve got.”

‘Do the Math in Calc, Not Excel’

“There’s no way GNU/Linux would cost the same with an OS-agnostic application,” blogger Robert Pogson agreed. “A $0 license forever is much less expensive than an enterprise license from M$ forever.”

Then, too, “there’s malware, re-re-reboots, extra hardware, and a restrictive EULA,” Pogson added. “All of those cost money — lots of it.”

Indeed, “are you kidding me?” Google+ blogger Gonzalo Velasco C. exclaimed. “Did they learn the mathematics in Germany, where recently some municipality have (wrongly) claimed the same?”

Meanwhile, “in some other part of that article, they say the cost would be ‘approximately the same,'” he pointed out. “Make up your minds! Do the math in Calc, not in Excel, perhaps you’ll get a more accurate result :-D.”

‘Somebody Is Utterly Wrong’

It’s clearly true that even with free software “you still have to pay for other things, like the IT guy’s time and expertise,” Gonzalo Velasco C. explained. “But I really doubt it is more expensive, or Red Hat would have never made 1 billion, starting from below microsoft and with a more expensive product+service!!”

In fact, Brazil’s largest bank — Banco do Brasil — has moved more than 45,000 ATM machines from OS2 to Linux, and the desktops of all its agencies from Windows to Linux, he pointed out. “They state that just in licenses, they were saving R$13 millions (~ US$7 mill.) per year.”

In short, “many other banks, local and national governments, ministries, etc., are migrating and saying they are saving, and there is no big corporation profiting with that,” Gonzalo Velasco C. concluded. “Somebody is utterly wrong… guess who?”

‘I Would Be Very Wary’

Others took a more moderate view.

“There will always be a certain number of these stories, and some of them may even be legitimate,” Google+ blogger Kevin O’Brien told Linux Girl, for example. “But I think the numbers show that Linux is still taking over the server room generally, so I wouldn’t lose any sleep over one company.”

To wit: “They may have an IT department full of Windows people, and that would make changing to Linux more difficult,” O’Brien pointed out.

Similarly, “it looks like they based their decision on what their techs knew so they wouldn’t need to hire more contractors,” consultant and Slashdot blogger Gerhard Mack agreed. “The result may be cheaper, but I would be very wary of keeping my money in a bank with that level of technical skill.”

‘A Track Record That Would Bother Me’

Claims like ME Bank’s are always out there, but “I don’t know that I’ve ever seen itemized proof,” offered Slashdot blogger yagu. “I think organizations go with what they know, or what they think they know.”

For instance, “I know of an unnamed large public utility that decided to convert their entire java platform with .NET because it was ‘better’ technology and would save money,” yagu noted. “A few years ago, they converted it back to java. So much for money saved.”

Then there’s “the perception that ‘Microsoft and Windows community specialists’ are readily available and Linux specialists are not,” he added.

“I’m convinced much of Microsoft’s staying power is inertia-based,” yagu explained. “They do have good technology, but they have a track record that would bother me if I were making architectural choices. Microsoft may be able to convince a firm they’re ‘cheap’ to get in the door, but what then? They’ve shown they unilaterally alter their pricing at what seems to be their whim. No thanks.”

‘Been There, Done That’

Bottom line? “Good luck to ME Bank,” yagu concluded. “It’s probably neither a bad choice nor a great choice; it’s just a choice.

“I’d choose Linux because I think it’s better,” he added. “But in a community of Microsoft fans, it would be a hard sell and maybe even a bad choice. My experience is that once a direction is set, people move on and do what needs doing. They’ll probably be happy.”

As for yagu, meanwhile, “I’d probably look for someplace else to work,” he said. “Been there, done that.”

‘More About Oracle vs MS SQL’

Chris Travers, a blogger who works on the LedgerSMB project, had a different view.

“This makes some sense,” Travers began. “Here the bank had settled on a commercial off-the-shelf ERP platform first, and they probably were looking at choices of Oracle on Linux vs SQL Server on Windows Server. While PostgreSQL might have been an option, for these sorts of critical applications there has not been enough visible critical mass to really make the case — the platform does not have the exposure.”

Meanwhile, “when comparing the costs of Oracle + proprietary ERP + Linux critical support vs MS SQL + proprietary ERP + Windows, the operating system is going be the least of the factors,” Travers explained. “Oracle on Linux is not generally considered cheaper than MS SQL on Windows.”

Even if PostgreSQL was considered, “a major issue right now for businesses that use it is that the database is so good that there is a perpetual supply shortage of qualified DBAs,” he added. “If you get good at working with PostgreSQL you get a job right away. This, of course, keeps admin costs high for the moment until the market catches up.”

So, “if I am right, this says much more about Oracle vs MS SQL than it does about Linux vs Windows,” Travers concluded.

‘That Was Plain Wrong’

All software has a cost for businesses, “whether in licenses, support from the OS developer, third party support or even in-house support,” Robin Lim, a lawyer and blogger on Mobile Raptor, pointed out.

“What surprises me is selecting Windows because it would cost AU$100,000 less,” Lim told Linux Girl. “Since ME Bank is spending AU$57 million on a ‘technology transformation program,’ an AU$100,000 savings over five years does not seem all that significant.”

In fact, “I would not bank there,” Lim asserted. “Given the value of the data stored in a server, assessment of ‘costs’ should go beyond the price of the license, support and cost of the personnel requirements. That kind of decision should have been based primarily on security.”

In short, “justifying it with cost and convenience, well, that was plain wrong, and sends the wrong message to depositors,” he concluded.

‘There Is More to the World’

Slashdot blogger hairyfeet felt sure the bank made the right decision.

“I have NO doubt that in that use case MSFT is the cheaper option,” hairyfeet told Linux Girl. “This is something that for some reason the otherwise bright FOSS community just doesn’t seem to get: There is more to the world than can be served by Firefox, gimp, and LibreOffice — a LOT more.”

Most likely “that bank has tens, maybe hundreds of millions, tied up in custom software that would have to be tossed, and the cost of having to hire a bunch of devs to build all that software from scratch (if they even could) would cost much MUCH more than some Windows licenses,” he explained.

‘The Bottom Line Is the Bottom Line’

Last but not least, “it would be easy for us as Linux fans to sit back and say, ‘yeah, but Linux is free, they could have saved a bundle!'” Google+ blogger Brett Legree pointed out. “But, the bottom line here folks is, err, ‘the bottom line’ — something banks specialize in, right?

“I’m pretty sure that ME Bank and specifically the person responsible for making the decision knew what he was doing, and since the software was not platform-specific, this to me adds even more weight to their argument,” Legree asserted.

To illustrate, “an old friend of mine from university, a computer science major, works for one of the largest Canadian banks,” Legree explained. “He is responsible for the same kind of thing, on the back end systems. And for as long as he has been there, they’ve been using Solaris.

“I asked him, ‘Why not Linux?’ Legree recalled, “and he replied that it would cost too much to switch.”

So, “Linux is a wonderful thing,” Legree concluded, “but it is not *always* the best solution for *every* problem.”

Katherine Noyes has been writing from behind Linux Girl's cape since late 2007, but she knows how to be a reporter in real life, too. She's particularly interested in space, science, open source software and geeky things in general. You can also find her on Twitter and Google+.


  • Either someone is playing games with numbers to make MS be cheaper or they are not telling the whole story. The only way a Windows install will be cheaper than a Linux install is because they rely on an MS only application they believe is mission critical and it will too expensive to port to Linux or too difficult to find a Linux equivalent.

  • "It ain’t what you don’t know that gets you in trouble; it’s what you do know that ain’t so."

    –Will Rogers

    "Never argue with a fool; onlookers may not be able to tell the difference."

    –Mark Twain

    "The idea that Bill Gates has appeared like a knight in shining armour to lead all customers out of a mire of technological chaos neatly ignores the fact that it was he who, by peddling second rate technology, led them into it in the first place, and continues to do so today."

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  • First, cost estimates are extremely hard to pin down. Once you get past hardware and licensing costs, the estimates for costs such as training, consulting, support, etc. are pretty much whatever the estimator can imagine.

    Second, why is there an assumption that it has to be Windows OR Linux?

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