The Legal Issues Essay Accounting Essay

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Both open source and closed source (proprietary) software come with benefits and detriments. Commercial companies purchasing software, therefore have to weigh up these factors in order to make a decision as to which type of software would best suit their business. The considerations which need to be made by prospective users can be categorised into five overall factors: usability, innovation, security, cost and service & support. The importance of these factors to commercial companies will vary from company to company. Thesefactors could be a major detractor or attractorfor oneparticular company to buy one of these types of software, whilst the same factor could be in fact seen in the opposite light by another company, or perhaps not seen as a consideration factor at all. It all depends on the type of company, their size, infrastructure, resources (especially staff) and their business model. Therefore the benefits and detriments outlined in this essay should be taken as a generalisation and not assumed to be the case in every instance.


The purpose of this essay is to provide an understanding of the differences between open source and closed source (proprietary) software, and the benefits and detriments each has for commercial companies purchasing software and what factors this market group use to decide which path to go down when it comes to choosing between the two.

The issues that have been raised are usability, innovation, security, cost and service & support. Therefore, this essay will analyse open source and proprietary software with regards to these issues.

1. Open Source Software

Open source software can be defined as [1]software in which the source code is by definition freely available to the general public for redistribution, modification, examination or any other conceivable purpose.

1.1. Usability

Open source software has been highly criticised for its lack of usability, because normally, the technology is not analysed by usability experts and does not cater to most computer users.

Open source software is generally centralised to the developer, and without system administration experience or the knowledge required to code in the appropriate programming language, modification of the software and knowledge on how to resolve errors as they come up is therefore limited to people with the relevant technical knowledge.

In addition, open source software doesn't require documentation by law such as user manuals or guides, which hinders the creation of such tools. If and when documentation is included, it is typically general, containing implicit jargon, inhibiting learning and understanding. Without adequate documentation companies have to rely on alternative means such as online communities, assuming they can be found and the issue they require help with is one that others have encountered previously or are at least willing to collaborate with.

These obstacles are a hindrance, but are not insurmountable.

1.2. Innovation

Open source software allows for innovation by providing all users with the freedom and flexibility to modify the software to their needs and preferences, without restriction.

However, innovation may or may not be made available to other commercial companies who use the software. It is a user's choice as to whether they share any adaptations or modifications to the software with any communities online. It is also important to mention that in order for users such as commercial companies to become aware of such innovation they must be actively participating in these communities.

It has been argued whether customised changes to original software source code actually put a cap on the future support and evolution of the software, as these potentially can result in limitations to the introduction of future fixes, updates or modules focused on improving the software. This can leave commercial companies with a version that may have issues that cannot be resolved and which cannot be rolled back to an earlier version.

It is worth noting that a resultant of this is that open source software manufacturers generally struggle to attract large scale Research and Development.

1.3. Security

Open source software is commonly viewed as having security issues. [2]New data from Forrester Research has shown that 58% of IT Executives and technology decision makers in large companies are concerned about the security of open source software.

Open source software is not always developed in a controlled environment. Whilst large companies normally have a dedicated development team, often the software is being produced by individuals from all over the globe who don't always work on the software for its entire developing lifespan duration. This lack of continuity and common direction may lead to effective communication barriers surrounding the software.

Furthermore, open source software is not always reviewed or validated by peers for use. Whilst commercial companies are free to inspect and approve source code, the level of expertise needed means that it is entirely possible for a programmer to embed back door Trojans to seize confidential and sensitive information without the user discovering it being done.

The potential risk can be lowered by sticking with software from a reputable brand which has a concentrated development team, preferably supported by a strong online community.

1.4. Cost

A massive attractor of open source software is that a large proportion of it is free and if the capabilities of a commercial company are such that they are able to train, implement and support at little cost to them then it is certainly an attractive option.

However, even with that in mind, open source software requires staff which have a sufficiently high level of technical expertise so they can manage content. It is therefore necessary to consider the incurred costs once the software has been obtained as they could be substantial if the company doesn't have the resources already in place to manage it.

Costs which are incurred in the long-term include set-up, innovation, the opportunity cost incurred dealing with service and support issues and the costs related with investment in infrastructure caused by the general inability to scale (assuming the company will expand and develop which will in turn evolve requirements).

Noticeably, more and more open source software manufacturers are charging for add-ons, additional services and implementation within the company's infrastructure.

The total ownership cost for open source software may therefore be more or less the same as some proprietary software options as a result.

1.5. Service and Support

Service is one of the most important issues to do with open source software. Open source software depends on its community network online to deliver support through forums and blogs. Whilst there are huge, loyal and engaged online communities that commercial companies operating with open source software can turn to, many companies in this day and age are expectant and often accustomed with the immediate support and services that allows issues to be dealt with in a short time, and these kind of communities cannot guarantee this high level of responsive service and support that proprietary software comes with.

2. Proprietary Software

Proprietary software also referred to as closed source software is [3] a type of software in which the user does not control what it does or cannot study or edit the code and cannot distribute the software without permission of the software copyright owner.

2.1. Usability

Proprietary software normally involves expert testing on usability, and as the software is typically aimed at a more specifically targeted audience, and thus more tailored, usability is generally quite highly rated.

In addition, detailed user guides and manuals are included. This allows for quicker training and provides a referencing immediately, allowing commercial companies to progress along the learning curve faster.

Supporting services comprise of training courses which are specifically targeted, seminars and extensive support to aid in maximising software use.

In addition, whilst proprietary software is looked upon by many people as "closed", today's proprietary software offers many ways for enhancements to be made by third party systems and developers.

2.2. Innovation

Proprietary software manufacturers don't allow users to view or edit the source code. Whilst this may be seen as a disadvantage to many commercial companies, it ensures the security and reliability of the software. However, many proprietary software manufacturers do actually customise their software to meet the requirements for specific users, especially large companies in order to provide more flexibility while investing in Research and Development so that new products and upgrades can be offered to these companies regularly.

Proprietary software manufacturers, like open source manufacturers, have online user communities that share ideas, strategies and best practices through feedback tools such as forums and surveys, which also promote innovation and allow the software to evolve with changing requirements.

This innovation is completely tested and verified, and is available to every software user. Therefore, it doesn't require investment in Research and Development or the technical understanding of source code, as help and support with implementation is usually part of the package.

Due to the fact that sellers must make sure their software does not become redundant, commercial companies also benefit from the 'business' focused type of targeted innovation, that is, continuous investment in R&D as opposed to "innovation for innovation's sake", which follows a 'technology' focused innovation path typically associated with open source software.

2.3. Security

Proprietary software has always been viewed as more secure because it is developed in a controlled environment by a dedicated team with a concentrated direction.

Also, as the source code can only be viewed and manipulated by this team, and is heavily audited, eliminating the risk of back door Trojans and reducing the risk of there being bugs or issues with the software is much more easily controlled.

2.4. Cost

Proprietary software costs for commercial companies vary from a few thousand pounds to a few hundred thousand pounds, depending on how complicated the system needs to be. The cost is made up of a base fee for the software, integration into the company's infrastructure and services as well as annual licensing/support fees.

This cost can be prohibitive for some commercial companies, although what the user pays for is a more customised product from a trusted manufacturer which incorporates higher security and functionality levels, continuous improvements, an increased ability to scale, continuous training and support and a reduced need for technical expertise.

In order to support these elements and maintain websites which are highly available, a mechanism must be in place to recover the expenses.

However, as mentioned earlier, because open source software providers are increasingly also charging for additional services, add-ons and integration, the difference in cost between the two options is narrowed.

2.5. Service and Support

When the internet is an important outlet for an organisation, which is often the case in this day and age, software is often a secondary concern. The level of service and the support structure requirements related to maximising uptime and reducing downtime take priority. Service is probably the greatest benefit of using proprietary software. Proprietary software manufacturers offer ongoing support to users, which is an important selling point for commercial companies without the technical expertise or resource to dedicate to this area.

If the user documentation, including manuals and guides, is not enough, or if a company runs into difficulties with the software, there is a clear and immediate point of call for them in order to get help and assistance.

There is a an element of risk reduction with proprietary software because commercial companies who use the same software are collaborating with each other if they are viable and if they have intimate knowledge of the software and services being used, should any issues arise.

Due to the fact that service is one of the principal reasons companies choose proprietary software over open source software, many proprietary software manufacturers compete with one another, which in turn increases the bargaining power which commercial companies purchasing software have and thereby increasing customer service levels among these manufacturers.

3. Conclusion

When companies purchasing software are deciding between open source or proprietary (closed source) software, it is vital for them to first consider their organisation's internal business (resources and capabilities), their external environment (stable or evolving), and the level of risk they are prepared to take. These issues can then be used as a fundamental guide to make an informed decision between the two.

Proprietary software may be seen as the safer option of the two, certainly for commercial companies who are in-experienced with software implementation and management. However, these issues of concern regarding security, and in fact other concerning issues with service and support, usability and innovation may not prove to be such an issue for commercial companies which have the resource, experience and expertise to confront and overcome them.

Commercial companies who require a more flexible software package implementation within their organisation, would be more inclined to opt for an open source solution which has a greater scope for customisation to meet precise requirements.

Overall, proprietary software is the more popular choice for commercial companies mainly because it comes with greater security and support, which reduces the need to spend company resources on these areas, giving them more time to spend on actually running their business as opposed to worrying about the IT.

4. Reflective Account

I found this assessment enjoyable but challenging for a number of reasons, some of which are directly related to the topic of the essay and some related to the process of compiling and writing.

I knew that this report would be tricky even before I looked at the topic on which I was to write about. This is because I have never actually written an academic technical report previously where I have had to adhere to school style guide standards. I have to confess, this was the first time I have looked at the school style guide book since I started my course and certainly the first time that I have actually applied it to my coursework. So ensuring I followed these standards was somewhat tedious and time consuming first time round.

Another aspect I found challenging was to keep to the 2500 word limit. The topics on which we had to choose from in this assessment are of a very broad nature and therefore I found there was a lot of scope to go down a number of varying paths. This meant I had to choose what I included within my report carefully. I felt that I had to be diligent on what I was writing in order to keep my report short and concise and ensure that I wasn't babbling unnecessarily.

I chose to write my report on the benefits and detriments of open and closed source software. I started writing this report from the point of view of individual consumers, but a way into it I realised that what I was writing was actually more relevant to commercial companies purchasing software instead. Naturally I just changed the title of the report to accommodate this. 

During researching the topic of open and closed source software I found that there was a plethora of information available, which in some ways was beneficial as it gave me greater choice on what parts to use. However, I discovered that having a surplus of information took nearly as much time to organise, as actually writing the report itself.  One of the reasons why it took so long to decide upon what resources to use was that I found that there was a high volume of contradictory information e.g. A lot of references said open source software was free, when strictly speaking this is not true. The was also a discrepancy between the definition of proprietary and commercial software. 

Overall I think I have made a decent first attempt at a technical report, and I believe my report covers most, if not all the benefits and detriments of both open source and closed source software. If the word limit had been greater I would have liked to have gone into further details on each of these, particularly the factors that I was only able to mention broadly.