Economy and efficiency of open versus closed systems

By Tamara Wilhite

Open source software and knowledge sharing have been a darling of the Internet era. Google’s software applications and technology, the Mozilla Firefox browser and Linux Operating System are examples of free open source systems that have become industry standards and part of the modern Internet infrastructure. Yet closed systems, with limited information, access, and software code remain common. Examples of this include IBM’s Cognos business intelligence tool and the Visiprise Manufacturing shop floor data management system. While it is easy to say “all applications should be open”, the economics and efficiencies of each model should be addressed. The reason some applications remain “closed” and proprietary can lead to insight of better methods to improve the economy and efficiency of the open realm.

Closed systems – Advantages

  • Vendor controls the code absolutely.
  • Limited information about application except for the vendor and licensed parties limits the knowledge base of those who could exploit it.
  • Training in use of the tool and administering it can be a profit center for the vendor.
  • If the vendor is the source of information about the application, they control all documentation. Unofficial documentation or bad advice is less of a problem.
  • Limited information about the tool leads to higher consulting fees for the software vendor or their licensed consultants.
  • Control of consultants is possible when the vendor manages education and often accreditation. The ability to approve is the ability to track and, if necessary, disavow consultants.

Closed systems – Disadvantages

  • Fewer developers prevents more rapid development of the application or implementation of bug-fixes.
  • Limited knowledge also results in few people developing defenses for the application.
  • If users cannot pick up an “application for dummies” book and self train, the cost of finding and then hiring from the small pool of experts drives up labor costs for companies using closed systems.
  • Closed knowledge bases also prevent employees from improving their own skills on their own time, driving up training costs.
  • Accreditation and certification limits the pool of potential consultants, driving up their price.

How open systems can improve based on closed systems

  • Provide the ability to determine whether or not information flows from the vendor or other sources, allowing for consumers to determine the quality of the information based on its source.
  • Implement rating systems, perhaps through user community forums, for ranking consultants or trainers.
  • Develop official training documentation or classes that others can then build upon or provide feedback upon.
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