Economic impact of open source on small business

Results from an in-depth study of open source's role in small and medium businesses.

A few months back, Tim O’Reilly and Hari Ravichandran, founder and CEO of Endurance International Group (EIG), had a discussion about the web hosting business. They talked specifically about how much of Hari’s success had been enabled by open source software. But Hari wasn’t just telling his success story to Tim, but rather was more interested in finding ways to give back to the communities that made his success possible. The two agreed that both companies would work together to produce a report making clear just how much of a role open source software plays in the hosting industry, and by extension, in enabling the web presence of millions of small businesses.

We hope you will read this free report while thinking about all the open source projects, teams and communities that have contributed to the economic succes of small businesses or local governments, yet it’s hard to measure their true economic impact. We combed through mountains of data, built economic models, surveyed customers and had discussions with small and medium businesses (SMB) to pull together a fairly broad-reaching dataset on which to base our study. The results are what you will find in this report.

Here are a few of the findings we derived from Bluehost data (an EIG company) and follow-on research:

60% of web hosting usage is by SMBs, 71% if you include non-profits. Only 22% of hosted sites are for personal use.
WordPress is a far more important open source product than most people give it credit for. In the SMB hosting market, it is as widely used as MySQL and PHP, far ahead of Joomla and Drupal, the other leading content management systems.
Languages commonly used by high-tech startups, such as Ruby and Python, have little usage in the SMB hosting market, which is dominated by PHP for server-side scripting and JavaScript for client-side scripting.
Open source hosting alternatives have at least a 2:1 cost advantage relative to proprietary solutions.
Given that SMBs are widely thought to generate as much as 50% of GDP, the productivity gains to the economy as a whole that can be attributed to open source software are significant. The most important open source programs contributing to this expansion of opportunity for small businesses include Linux, Apache, MySQL, PHP, JavaScript, and WordPress. The developers of these open source projects and the communities that support them are truly unsung heroes of the economy!

Open source content management evolves

Open source refers to software that it is distributed freely and additionally offers access to the product's design – essentially opening the source code to collaboration and further ingenuity from outside developers, PRWeb reports.

Horton has taken note of the growing popularity of this type of Web development software and has embraced open source CMS as valuable resources for offering clients better marketing and advertising tools.
A community of developers working together to add more utility into a content management system leads to the creation of invaluable tools for businesses and organisations seeking to build a better online presence. On top of providing clients with a means to manage their own content, Horton also gives clients access to Web site management tools that are constantly improving. Open source software allows Web sites the potential to always change and evolve along with a growing library of programming technology.
The majority of Horton Web sites are developed on Drupal, one of the most popular CMS platforms available, Virtual Strategy Magazine writes.

With one of the largest and most dedicated online development communities, a few of the Web sites built on Drupal include big brands like Twitter and Nike. Even the Web site for The Whitehouse – the executive branch of the US government – is built on the Drupal platform. Horton Group also uses Wordpress as one of its main development platforms because of its simplicity and user-friendly interface. Horton Group believes the employment of basic but innovative open source CMS helps clients keep content fresh and relevant – Web sites become less static and more interactive.

A recent article posted to business2community.com states that more businesses will increasingly begin to adopt open source content management software because of the multiple benefits it offers. However, Horton prefers the use of open source content management systems for more reasons than their widespread popularity.

“Open source software is great because it allows us to offer a variety of options, but also promotes a strong knit development community that in the end will ultimately benefit the client,” notes Horton lead developer Matt Smith. “Most open source content management systems like Drupal are free, which allow us to pass bigger savings onto our customers. This gives us the capability to offer clients more diverse programming options at lower costs.”

France awards €2 million open source support tender

The central IT department for the French government has granted a €2 million contract to support 350 different open source tools throughout fifteen different ministries. The three to four year contract, which was officially tendered last year, was awarded to consulting companies Alter Way, Capgemini and Java specialist Zenika.

The supported software and technologies include several Linux distributions such as Ubuntu, Debian and CentOS and programs including Firefox, OpenOffice, LibreOffice, OpenERP, Nagios, Drupal. Programming languages such as PHP and Python are also within its scope.

The government's IT department is requiring the companies to give back improvements made to the open source code they are supporting to the respective communities as part of the contract. The current contract only covers bug fixes and maintenance of existing installations, development of new features will be covered by a new tender which has not yet been published. Not participating in the contract is the French Ministry of Economy, Finances and Industry which has awarded its own open source support contract.

Eight years ago, a similar contract had failed, resulting in "expensive proprietary software solutions" being rolled out throughout the French government, according to the news site LeMagIT. Therefore, aside from saving costs, increased and more sustainable adoption of open source tools is a priority.

Getting my hands on Drupal

If you happened to visit CodeTRAX, my (at the moment) personal software publishing spot, during the last two months, you would have noticed that I’ve started using Drupal on that website. My alternative options had been WordPress and a custom CMS based on Django, but I finally rejected both and I am glad I did so. Although I like WordPress, which I proudly use on G-Loaded, it cannot be compared to the flexibility and maturity of Drupal. I am sure it will get there some day, but there are many things that need to be changed in the organization of this project until it becomes as serious as Drupal is.

On the other hand, after trying Django for about 2-3 days during the last summer, I realized that this is far from what I was actually looking for. I recall that at some point I had felt like trying to re-invent the wheel. Well, Django is not a CMS. It’s a framework. I should have known better! CodeTRAX is not just about content. It is about the integration of different software: a CMS, bug trackers for projects, project wikis, download center, notification system, community-based support forums, statistics. In order to build all this around an open source CMS you need the best available open source CMS; and I think this is Drupal.

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WordPress vs. Drupal - Content Management Systems

Wordpress

The first CMS to highlight is called WordPress (which is what Make Use Of runs on). WordPress was started in 2003 and is released as free, open-source software, meaning it is developed for and by the community. WordPress is a very functional, extensible, and easy to use blogging content management system. With WordPress you can create just about anything from a family photo journal to large scale news site.

At WordPress.org, you can find the open source software that you can run on your webhosting service. It takes a little bit of know how to set up but if you’re lucky, your webhost might have an auto-installer for it. For those of you that don’t have hosting or don’t want to get into the configuration and setup, WordPress.com gives you your own free WordPress blog. It is like a blogging social network of sorts. WordPress is very secure and reliable because of its large user base and development backing. It is extensible through thousands of plug-ins to use on your WordPress site. Your site can grow as you grow.

Drupal

The next CMS is Drupal. Drupal is an open source content management system framework which means you can build anything from a static two page site to a high traffic social network. With this huge pool of flexibility comes a much more advanced set up and configuration. It will take you longer to get your site ready but it may make more sense in the long run.

The latest version of Drupal 6.x, gives a very clean admin panel with status and error logs so you can track most errors and know when your installation is out of date. This applies to all of your modules (referred to as modules in the Drupal community), themes, and core. Drupal, like WordPress, is extremely extensible and secure. It also has a very large user base and developer base. Best of all, Drupal is my favorite price - free!

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