Application Development Cost Comparison

Complexity in developing applications to solve business problems adds costs in the following ways: increased costs of hard to find, specialized, development staff; increased costs performing quality assurance tasks for a less common environment, issues with timeliness deploying a complex solutions, costs associated with staffing to maintain a complex customized application. Understanding the complete costs involved in developing a solution is key to making an informed decision. As a result of this, customers have asked Microsoft for credible, evaluative data to assist them in making value-based IT decisions as the cost trade-off of developing custom applications using J2EE on Linux versus .NET on the Windows platform. Microsoft commissioned Giga Research to examine the relative benefits of Linux and Windows by comparing the costs incurred and benefits achieved by two sets of organizations: those using Linux as the basis for their applications and those using Microsoft Windows. Source: Forrester/Giga Total Economic Impact Study Overview last updated on September 8, 2003: http://download.microsoft.com/download/7/3/e/73e77129-db34-4c95-b182-ab0b9bd50081/TEICaseStudy.pdf .
The primary conclusion of the study is that Microsoft offers a substantial cost advantage over J2EE/Linux as a development platform for the applications considered. Interviews with organizations using Linux quickly indicated that J2EE was their development and deployment platform of choice. As such, a J2EE/Linux environment has been used as the basis for comparing a Linux to Windows environment in this study.
Based on the study findings, the primary sources of Microsoft’s cost advantages are:
The J2EE application server and Unix-based database software used in the Linux development and deployment stack drive up product costs and development complexity relative to the comparable Microsoft products.
Microsoft’s tools simplify development of applications like those profiled in the study when compared to the J2EE/Linux products in the study. This simplification translates into lower labor costs for development.
The findings in this study are based on interviews conducted with seven organizations that use the Microsoft .NET-generation platform to develop and deploy custom applications within their enterprises, and five organizations that use Linux. The analysis extrapolates from these user experiences to create two composite organizations a large enterprise and a medium-size enterprise — that are developing and deploying custom applications using either J2EE/Linux or the Microsoft platform.
The comparison of the two platforms shows large to medium-size organizations that develop, deploy, support, and maintain custom applications on the Microsoft .NET platform can expect to experience 25 percent to 28 percent less cost during a four-year life cycle than if the J2EE/Linux platform was used.
The following are the findings based on the model of the sample large-size enterprise:
• For J2EE/Linux, the total costs associated with the initial development and deployment, plus three years of support and maintenance, were $2,289,041.
• For Microsoft, the total costs associated with the initial development and deployment, plus three years of support and maintenance, were $1,643,112.
• Giga found that for the large sample organization, the total costs associated with the initial development and deployment, plus three years of support and maintenance, were $645,929 less using the Microsoft platform. Microsoft’s total costs were 28.2 percent less than the total costs for J2EE/Linux. The primary driver of this difference is a shorter time to deployment for Microsoft nine months vs. 12 months for J2EE/Linux.
The following are the findings based on the model of the sample medium-size enterprise:
For J2EE/Linux, the total costs associated with the initial development and deployment, plus three years of support and maintenance were $881,455.
For Microsoft, the total costs associated with the initial development and deployment, plus three years of support and maintenance were $661,012.
Giga found that for the medium-size sample organization, the total costs associated with the initial development and deployment, plus three years of support and maintenance, were $220,443 less using the Microsoft platform. Microsoft’s total costs were 25 percent less than the total costs for J2EE/Linux.
Each of the models is based on an application scenario that was common among the interviewees. Both are portal applications. Both composites assume the same application development scenarios to allow for comparability. The report presents both the financial and the non-financial factors evident in choices made between Linux/J2EE and the Microsoft platform by the interviewees.
Among the interviewees, Microsoft’s development tools were shown to be highly productive for the target applications. In addition, Microsoft’s software prices were shown to be generally lower than those of application servers, databases and related products associated with the J2EE/Linux platform.
It is only when the low prices of Linux are put into a larger IT context that their true impact on IT costs becomes evident. In a head-to-head comparison, the list price for Red Hat 9 (the Linux version chosen for this study) is lower than the price of Microsoft Windows Server 2003. However, the key cost factor in the study’s Linux cases was the J2EE environment, not the operating system. Although the cost of Linux is low, the impact of that lower cost on the overall economics of application development project is small. The full development and deployment environment and the labor associated with the development project are the larger costs. Comparisons of individual elements within the stack of software products required to build and deploy a complete application tell only part of the story and can be misleading.
Summary
Even though the Linux operating system can be acquired for free or low cost, Windows on the server and desktop provides better TCO for enterprise customers. The studies cited above do not account for lost opportunities and other qualitative factors resulting from making a Linux choice versus a Windows choice. A lack of a stable ecosystem that includes enterprise support, availability of applications, and other key components, limits Linux’s current potential as a long-term, cost-effective solution for large enterprises.
When comparing products, decision-makers need to make a price-to-value assessment. They also should consider whether they are getting a rich platform solution or a basic operating system that requires many add-ons to be truly useful in their business.
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