Open VS. Proprietary

When a retailer has a combination of retail stores, catalog sales and Web purchasing available for its consumers, all systems that implement the retailer's chosen forms of consumer purchasing must be integrated and synchronized to provide consistent consumer shopping. Additionally, the systems must provide real-time data for use by decision management systems and staff to ensure business is operating at a suitable profit level and meeting customer needs.

Retail stores and headquarters have traditionally operated independent systems. Now they need to share systems, applications and data. When choosing systems, retailers want investment protection, the capability to integrate new technologies as they become available, and the ability to quickly respond to changing business needs and market conditions. The question is, where is the retail advantage — is it in open or is it in proprietary systems?

To answer that question, let's begin by examining retail technology trends and problems.

Technology Success Some of the most successful retailers, companies such as Burlington Coat Factory (, RadioShack (, Home Depot (, Wal-Mart ( and Staples ( have integrated good business strategies with appropriate technology. In an industry where technology changes slowly, these companies are often early adopters.

Retailers and others use technology to stay competitive in four key categories: convenience, price, size and speed. On the sales floor, technology tools help retailers balance inventory assortment, manage ordering and track pricing. At the strategic level, it provides for planning and decision-making. Over the Web, e-business technology allows consumers to interact with retailers anytime and from any place.

Three of the most important areas in retail where technology changes are taking place today are server consolidation, new store architectures and POS devices.

Server Consolidation According to the SCO Group (, some of the most common problems that retailers are facing relative to servers are:

1) Multiple servers running multiple operating systems — a management/maintenance nightmare

2) Staffing operations teams to keep systems up and running, especially older systems — very expensive

3) Lack of application resilience and fault tolerance — when one server fails, switching the application to another server is unlikely.

Because of these problems, retailers are becoming interested in server consolidation. Server consolidation is not a new idea, but with the recent downturn in the economy, some enterprises are focusing on it more seriously. The thinking is that server consolidation reduces maintenance costs, increases control, and improves system uptime. When server consolidation also includes fewer operating systems, then it is much easier to provide application resiliency by failing over an application from one server to another.

Linux and open source applications such as Apache Web Server ( are at the center of server consolidation. IBM ( has been very successful in selling zSeries servers with hundreds of instances of Linux running as quests under z/VM as server consolidation platforms. This type of solution can result in significant cost savings, especially for retailers that receive high volumes of sales orders and inquires via the Internet.

New Store Architectures Until the past several years, retail applications have primarily resided on retail store premises. The applications generally would be run on small machines, usually Intel-based (www., and were connected back to central headquarters through some type of private network or a dial-up connection. This mode of operation is changing because there are two things that retailers don't want to lose — time and money.

With new, high-bandwidth networking technologies now available, applications are being centralized on large servers at regional or centralized headquarter locations. POS devices are connected via high-speed networking back to the regional or centralized computers. This change has resulted in reduced administration costs and the development of new POS devices and POS applications.

POS Devices Today, there are hundreds of thousands of POS devices in use. POS devices utilize various operating systems with variants of MS/DOS, OS/2 and UNIX still running the majority of POS devices. Because older operating systems like MS/DOS and OS/2 may not run Java applications, support new graphical applications or drive today's new peripherals, and UNIX is considered expensive, the operating systems of choice are becoming Linux and Windows.

In that competition, Linux is becoming the operating system of choice for POS devices because it has cost advantages over Windows. Also, it is very reliable, morphs easily to fit the needs of POS and POS devices, and is already the operating system of choice in the appliance area.

Open vs. Proprietary The argument here is not that Linux is the best solution today for all components of a retailer's architecture. For example, mission-critical applications that require eight-way or more computers are better suited today for UNIX. Instead, we argue that the combination of Linux and open systems is the best solution today for several of the components, e.g., POS devices, Web serving, and so forth.

The advantage that Linux and open source software provide over proprietary systems in the retail market include:

Freedom of Choice — building systems that rely on a single vendor is almost a guarantee that at some point the user will begin to feel locked into a single solution for his business needs. The freedom to change as new technology arises is reduced.

Higher Reliability — Linux has gained the reputation of being very reliable through the experience of system administrators installing and maintaining Linux in shops that include both UNIX and Windows-based systems. System administrators favorably compare Linux to UNIX in terms of reliability.

Lower Software Licensing Costs — Open-source software is less expensive to obtain than proprietary software. Best-of-breed open-source software, such as Apache Web Server, can be utilized with no software fees and Linux can be downloaded for free from the Web.

Availability of Best-of-Breed Open-Source Applications — Today there are several open-source infrastructure applications that are among the leading applications in their areas. These applications include Apache (Web serving), Samba ( for LAN serving, Postfix ( and Sendmail ( for mail serving. We expect more business applications to be developed via open source.

Lower Complexity — Linux is the logical choice for POS appliance implementation. It is rapidly becoming the operating system of choice for appliances and embedded applications over all other operating systems including proprietary systems from Microsoft ( and Wind River (

Conclusions As retailers work to create new architectures and reduce retail management costs, open-source systems are emerging to take a leading role. Independent Software Vendors (ISVs) are beginning to realize that they can drive down the total cost of ownership (TCO) for users by moving their applications to Linux platforms supported by open source infrastructure software. ISVs can still receive their normal licensing fees for their software, but end users, including retailers, save significant dollars because of the lower cost Linux- and open-source-based infrastructure solutions on which they operate.

Bill Claybrook, research director for open systems/source at Aberdeen Group ( is one of the industry's best-known experts on this subject. In this article he discusses the issue of open source versus proprietary systems in the current retail market. Watch for his monthly contributions on open systems to our Techsplanation page to resume in February.

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