| Doctor prescribes Linux for more reliable networks, lower price (Part 2) |
(November 3, 2003)
Q: What do you estimate your cost savings to be as a result of introducing Linux and Citrix into your organization? What was the cost savings of Linux over upgrading your Microsoft products?
Dr. Echt: This is a complex question . . . because in the long term, any business decision must be based on a sound financial and strategic foundation.
First, we did not use Citrix. We employ it only for a very limited use to connect to hospital Citrix farms. We went thin client.
If we had chosen the Citrix Desktop solution with Linux, there would have been no cost savings over the next few years. It would have been a long term STRATEGIC decision. As the battle between MS – Steve Ballmer and Linux in Munich this years showed, the city of Munich decided to go with Linux to upgrade 14,000 desktops. Munich approved a $35.7 mill proposal by the German Linux distributor SuSE and IBM over the MS price which had been lowered from it’s initial $36,6 mill to $31.9 mill and eventually $23.7 mill. So how do I as CEO judge costs?
Clearly the lowest bid by Microsoft was not the best bid for the city of Munich. Mind you, Munich used DESKTOPS in their RFP, and I believe they went with CITRIX.
Thus, the costs per terminal upgrade/conversion paid by Munich were $2,550 with Linux versus $2,614 for the initial Microsoft proposal and $1,693 for their last (desperate) underbid.
Also,consider studies done by IBM pointing out that the licensing costs of Linux over MS are not the main driving force. Its workload consolidation with capabilities to quickly add capacity as shown in the example of Weather Channel’s Web site which handles 40+ million page views in just days with tremendous network traffic fluctuations. Their Linux xSeries Intel serves resulted in, according to IBM, a 70% cost savings over other platform options -- as well as (most importantly!) lower incremental growth costs.
The receptionists, billers, check-out people etc. etc. all did fine. They are mainly using billing. No problems. Some hiccups due to occasional problems with data transfer speed, but no loss of productivity.
To answer your question directly, we paid approximately $220,000 for - development costs
- complete new server hardware etc
- adding 30 Thin Clients
- implementation costs
That is at $1,467 per workstation, 44% less than Microsoft’s initial offer to Munich, 42% less than their Linux/IBM deal and still 13% less than MS cheapest underbid offer. Thus, we made out ok. However, we are working with a rather small company, Lille Corp, Any proposal by IBM would undoubtedly have been more expensive. We did not get an IBM proposal because that service was not offered by IBM at that time in August 2002.
However, I believe that the conventional way of comparing desktop upgrades/switches misses the boat entirely. In 10 years from now, and probably sooner within 5 years, there will be a vibrant Linux desktop service market, driven by the same forces that drove the Munich (and many others) decision. The main point however is still missed -- It lies in the step "back-into-the-past” return to the WYSE area of "refocusing” the user to core application usage, eliminating MS bloat, sluggishness and complexity. The concept is best highlighted as “user disempowerment”. I know that this is politically incorrect but in my 21 years of working with UNIX/MS networks, the biggest factor driving costs has been MS complexity and it’s ingenious way of shifting from WYSE to MSterminal desktop. In 1994 the cost per work station WYSE were approx. $1,000/year (based on figures from our 8 physician practice info-system using Unix/WYSE), in 2003 according to many independent sources they are $ 6,000 - $12,000 with an average of $8,000 per terminal per year. Going back to the concept of user access and preference setting control as well as total remote (server) control of settings will dramatically lower long term “work station” costs PLUS allow for much lower incremental growths costs. And that, I strongly believe will be the economics of Linux-powered thin clients.
I'll be presenting more details during my presentation next week at the Desktop Linux Consortium's Conference in Boston.
Q: What about support? Analysts and Microsoft proponents have argued that the total cost of ownership of Linux is higher than deploying Microsoft products in an enterprise once you start adding up service, support, etc. What is your experience with support?
Dr. Echt: Thin clients are “plug-and-play” swappable at a very low labor cost (and can be done by local management rather than IT support). Support costs are mainly server-oriented. Thin Client hardware is minimal, no hard disk, at approx. $ 100- 200/station. Thin client longevity will also likely be much lower. Our experience is very good. The market currently offers very little Linux expertise but I expect that will change.
Analysts are still working on the old Citrix Desktop model concept and simply have not yet caught onto the Thin Client concept.
As a medical practice, you deal with patient records and other confidential information routinely. Did you have any concerns about security? How were they addressed by Linux? Was security a key factor in your decision to move away from Microsoft?
Dr. Echt: Our medical records are both paper and internet based Oracle e-SCRIBE. All security concerns have been addressed. Access via Mozilla. No problems. Security was not a key factor – but it was certainly a factor in the decision to drop MS.
Q: What criteria did you use in selecting your systems integrator? Do you have any recommendations for other small businesses that are opting to follow your lead in deploying Linux in their enterprise?
Dr. Echt: We selected Lille Corp. since it was the only local company with the expertise. Lille Corp., in turn. hired out-of-area programmers for this project. If there had been a broad choice of vendors, we would have used the usual selection criteria (reputation, references, costs).
Q: Anything else a key factor in your decision?
Dr. Echt: Yes,there was another factor. Some resentment. Having managed a medical practice and witnessed the evolution of home computers from TRS-80 Radio Shack on, having worked with elegant UNIX network solutions for many years, having witnessed the systematic destruction of thousands of competing excellent program software by a monopoly software company, Microsoft, I was looking for a way to end the price-gouging.
Once the different pieces of the Linux thin client project came together and made economic sense in August 2002, we jumped. Risky? Yes, we are the first medical group in the Northeastern US to jump -- as far as we know.
Will it be the right decision in 5 years from now? Absolutely. And the pleasure of having been on the cutting edge will more than make up for the cost differential which version 1.00 users always have to pay!
Dr. Echt is presenting his migration from Windows to Linux at the Desktop Linux Consortium's Boston conference on November 10, 2003.
About Dr. Echt: MD, PhD and CEO of Capital Cardiology Assocatiates based in the Albany, New York area. The 36 physician-group powers their thin client network on the Linux operating system.
Dr. Echt attended medical school at Free University in Berlin, Germany where he graduated Magna cum Laude in 1969. He completed his PhD in Cardiovascular Physiology in 1970. He then completed his Medical Residency at Mt. Sinai Hospital in Hartford, CT and his Cardiology Fellowship at State University of New York in Buffalo, NY in 1980.
Dr. Echt is Board Certified in Internal Medicine and Cardiology. He is a Fellow of the American College of Cardiology and a Member of the American College of Physicians. He is on staff at Samaritan Hospital and St. Mary's Hospital in Troy, NY. Dr. Echt is Chief Operating Officer of Capital Cardiology Associates, PC. He is Clinical Director of Cardiology for Samaritan Hospital and Director of the Board for Northeast Health in Troy.
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