Open Source Blog

TCO versus TIO: a simple diagram
March 20, 2007

Stephen Walli has a very simple diagram that demonstrates the difference between focusing on total cost of ownership, versus the total innovation opportunity of open source, comparing the focus of Red Hat versus Novell/Microsoft as an example.

Source: Stephen Walli, click on the image for the original, larger version.

He backs it up with some information from Red Hat VP of open source affairs, Michael Tiemann’s, presentation at the 2006 Red Hat Summit:

"- Companies spend on average 4-8% of income on IT (Financial companies 8-12%)

- So regardless of how you carve up the cost savings, you're messing around with something that will NOT move the stock price anytime soon.

- IT focusing on the value creation side of the bar can help by delivering better customer service (and retention), market growth, competitive advantage."

For more on the total innovation opportunity of open source see also:
The innovation opportunity of open source
Putting a value on the total innovation opportunity of open source
Balancing open source risk and the total innovation opportunity
EnterpriseDB – the open source total innovation opportunity in action
Unisys aims to ride the wave of open source TIO
Open source TCO and the total innovation opportunity
Ingres’s Roger Burkhardt on the innovation opportunity of open source