Accountancy firm dumps Microsoft for OpenOffice

The Melbourne member office of international accountancy and business advice provider HLB International is mid-way through the process of replacing its Microsoft Office-based desktop suite with the OpenOffice.org open source alternative.

ZDNet Australia understands the key driver of the migration at the 150-person HLB Mann Judd Association office is cost, with management being reticent about paying for new licences for the latest versions of Microsoft's flagship Office products. It is believed an initial deployment of OpenOffice.org on about 40 desktops is being extended to the entire office.

The Melbourne HLB Mann Judd office declined to comment on the specifics of the rollout including whether the deployment may spread to other Australian offices within the association. The HLB Mann Judd Association here is a tightly-knit grouping of independently-owned accountancy and business advice firms servicing markets such as Brisbane, Cairns, the Gold Coast, Adelaide, Perth and Hobart.

The rollout is believed to be under way with the assistance of Melbourne-based open source software consultancy Cybersource.

Like hen's teeth
Intelligent Business Research Services (IBRS) analyst Dr Kevin McIsaac said HLB Mann Judd Melbourne's move from Microsoft Office was rare, with few other medium-to-large organisations in Australia biting the bullet.

Dr Kevin McIsaac, IBRS

Migrating to OpenOffice.org from a proprietary solution was simply not attractive to large organisations in "developed" nations because the cost of buying software was only a small part of the total cost of ownership (TCO) of an IT solution, he said.

"If you've got a solution already in place, it's actually quite expensive to replace, because sure the software doesn't cost you anything, but there's a huge migration cost," McIsaac told ZDNet Australia.

"TCO is not just the software cost, it's the software plus all the hardware plus all the support over four years, so in the TCO of Windows and Office, the software is not a large part of that."

The analyst estimated office suite software was between five and seven percent of the total cost of a typical corporate desktop package.

In comparison with less developed countries like India, McIsaac said the cost of staff in Australia was "very very high", and so any migration that involved re-training staff could quickly become quite costly.

"You'll hear people who talk about 'I can save myself $10 million by not buying Windows and Office in my corporation' and that's true. But those organisations are spending hundreds and hundreds of millions of dollars on IT -- I bet you could save that kind of money on other projects which are vastly simpler," said McIsaac.

"It's just a question of -- is this the best place for me to try and squeeze money out of my environment right now? And for many customers that I talk to -- mostly medium to large organisations -- it's just not the best place to save money."

"It's not even clear that you will save money, or how long it will take to save money."

Another problem with migrating to OpenOffice, he said, was the document conversion process. "Not all of your documents will be compatible," warned McIsaac. "Particularly with respect to macros, but there is occasionally some problems with formatting."

Starting from scratch
However, said McIsaac, it could make sense for some organisations in particular cirucmstances to use OpenOffice.org.

"If I was a greenfield, if I had no infrastructure at all, it might be quite interesting," he said.

"If I was in India, where people cost a fifth of what they do in Australia, I don't have any existing infrastructure, and I don't have any existing documents in place to translate, it looks like a very attractive option."

McIsaac said one other advantage of OpenOffice was that unlike Microsoft Office, it supported the OpenDocument format -- a publicly available open standard for office documents.

OpenDocument is currently a hot topic of debate after the United States State of Massachusetts said in September it would adopt the format and dump Microsoft Office because it wanted to move away from proprietary formats.

Microsoft has subsequently submitted its own open standard, dubbed 'Open XML', to a European standards body in the hope it will eventually be approved as a global standard.

McIsaac said by using such a standard like OpenDocument, IT managers might feel more comfortable about the longevity of their documents, and avoid being locked in to one vendor, or to one vendor's product upgrade lifecycle.

"If MS decides their product is no longer supported and I've got to migrate to the latest you-beaut version of Office, I've gotta do it," he said.

"If all of your documents are in an open format then escaping from MS would be less of a risk."

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Talkback 24 comments

  1. Reality Check? Anonymous -- 09/12/05

    This doesn't sound right in the context of this story?

    "TCO is not just the software cost, it's the software plus all the hardware plus all the support over four years, so in the TCO of Windows and Office, the software is not a large part of that."

    If all they are doing is replacing MS-Office with OpenOffice on existing servers and desktops, then where's the cost? There's no mention of replacing Windows, just replacing MS-Office. In the case of MS-Office, the TCO is ALL Software related. Training & Support? They are so similar its not funny. I can only see large cost savings in this example.

    I wonder what the real facts are here?

    1. Office 12 much bigger problem Anonymous -- 10/12/05

      If cost retraining actually is the reason not to switch to OpenOffice.org, the next generation of Microsoft software will be even more problematic.

      Office 12 will look completely differen from what most MS-Office users have used so far and will require major retraing. It will use a different file format from current MS-Office versions given Microsfts bad track record of handling old formats

      I would guess that people who stay in the Microsoft world passt the next MS upgrade is in for a lot more costs and trouble than people switching to OpenOffice.

    2. Office 12 much bigger problem Anonymous -- 10/12/05

      If cost retraining actually is the reason not to switch to OpenOffice.org, the next generation of Microsoft software will be even more problematic.

      Office 12 will look completely differen from what most MS-Office users have used so far and will require major retraing. It will use a different file format from current MS-Office versions given Microsfts bad track record of handling old formats

      I would guess that people who stay in the Microsoft world passt the next MS upgrade is in for a lot more costs and trouble than people switching to OpenOffice.

    3. TCO Renai LeMay -- 12/12/05

      Hi there,

      Kevin McIsaac (the analyst quoted in this article) was pointing out that in his opinion, the cost of software involved in a typical office suite is not large when compared to the cost of keeping staff trained.

      Please feel free to contact me using the below e-mail address if you have any further queries.

      Kind regards,

      Renai LeMay
      (the author)
      renai.lemay@zdnet.com.au

    4. Absolutely! Rex Alfie Lee -- 21/12/05

      This writer hasn't really done his research before opening his mouth. As you say the only change is the software & the ease of transfer is unlikely to require any new training.

      If someone wants a feature from any of the Office products they basically choose the icon that looks most like the Microsoft one.

      This to me is just another beat up of FUD & the writer is a Microsux employee or beneficiary.

  2. Im's so sick of Microsoft alreafy Anonymous -- 09/12/05

    I'm jut fed up with all this Microsoft TCO crap. They can't compete with open source when it comes to saving money, so they came up with this TCO thing, to proove that MS Office and Windows are in fact cheaper than free software. Go figure. You'd have to be a total idiot to eat that much crap. What would you rather have: a free Honda or an expensive Harley? It's THAT simple.
    I choose Linux, I choose Firefox, I choose OpenOffice.org 2.0, I choose Evolution and Ubuntu, I choose open source, I choose virus-free, I choose no-cost.

  3. Paid for Article Abe -- 09/12/05

    This is nothing more than an article by an analyst who slurped MS "Get the Facts" mis-information like slurping Kool Aid. It is amazing how low some people stoop for a buck. He is trying to defy the real facts this company demonstrated for themselves by testing the migration out with 40 cases. What kind of idiots he things consumers are? It is mind boggling. MS succeeded with this approach previously, but they can't any more.

    As Abe Lincoln said
    "You can fool all of the people some of the time
    You can fool some of the people all of the time
    But you can't fool all of the people all of the time"

    Give it up guys, you are all naked and exposed.

    1. Wishful Thinking Anonymous -- 10/12/05

      It amazes me how these guys write. They take a success story that looks unfavourably on their perfect son and turn it into a failure by the end of the article.

      The coded message in these type of articles is: "Don't worry, you Microsoft Faithful, we shall overcome." And step by step Microsoft, Windows, Office, and their proprietary file formats lose a little ground here, a little ground there, until eventually they can no longer avoid reading the writing on the wall.

      But then these same guys will turn around and say, "See, we told you this was going to happen," pretending that they were on top of it all along.

    2. Paid for article Renai LeMay -- 12/12/05

      hi there,

      just to clarify Kevin McIsaac didn't write this article. In my role as a journalist for ZDNet Australia, I interviewed him to give some background on what was going on in the rest of the industry with respect to OpenOffice.org migrations.

      Please feel free to contact me using the below e-mail address if you have further concerns.

      Kind regards

      Renai LeMay
      (the author)
      renai.lemay@zdnet.com.au

  4. Hyperbole Leslie Satenstein -- 10/12/05

    Before trying OpenOffice for the first time, I was already apprehensive. but, to my amazement and delight, I was able to be productive immediately, and there are so many nice things in this product, that Microsoft, in my view, is in catch up mode.
    I cannot see paying substantial dollars to relicense software that is available for free.

    Like fresh air, Open Office is wonderful.

  5. Costs of migrating to OpenOffice Matt Taylor -- 13/12/05

    A woefully badly constructed argument, as one earlier comment alluded to in the aspect of software costs, This was correctly picked up on in that next version of MS Office will be very different and potentially have high training costs.

    I personally switched from MS-Office 2003 on WinXP to OpenOffice 2.0 on Mac OS X. Took about 30 minutes and all my docs work fine. Im working with complex documents, spreadsheets and presentations all the time collaboratively with colleagues and clients using multiple versions of MS-Office.

    The misinformation by analysts and press I think is coming from those people who have not had first hand experience of trying such systems. They are using past, possibly now irrelevant (e.g. using openoffice 1.1.2 which I would agree was clunky), experience together with theoretical frameworks, by which to analyse and postulate on outcomes.

    Dr McIsaacs should be invited by the author to commit to one day of using OpenOffice 2 on his "everyday use machine" and then comment again on migration costs, so that we can get a balanced article based on real world experience.

    1. Using OpenOffice Renai LeMay -- 19/12/05

      hi Matt,

      thanks for your feedback. I did quiz Kevin McIsaac on this matter and it is clear that he has personally used OpenOffice.org extensively, including the latest version 2.0.

      Kind regards,

      Renai LeMay
      News Journalist
      ZDNet Australia

  6. TCO Anonymous -- 15/12/05

    The argument that MS Office has a lower Total Cost of Ownership is false. It may be the case that there are some (quite considerable) costs involved in training for OpenOffice but as other people have noted there will also be a considerable cost in training AND upgrading for MS Office 12.

    Also what this fails to take into account is that once the company has moved to OpenOffice there are no costs associated with updating the software and moving from one version of OpenOffice to the next would require comparatively little training (certainly no more than any MS Office upgrade).

    As well as this, because OpenOffice uses the Open Document Format it is safe to assume that documents created would remain compatible in future versions (something that is often not the case with older .doc formats - although this does seem to be improving with MS opening and "standardising" its next generation XML format).

    For anyone willing to think of longer term benefit, OpenOffice would be a better choice: training probably wouldn't cost more than training for MS Office and there won't be extra costs for the actual software every few years.

  7. How do they achieve integration John -- 15/12/05

    One thing Microsoft does far better than anybody else is extend each product into the other and provide mostly seamless integration. Therefore from Office you can use a shared document space, access databases etc. The only true problem I have with most Open Source products is they are developed in silos, with very little integration between applciations. Until this is oversome Open Source remains a point solution and not enterprise grade. For example Mono wil l allow a .Net applciation to run on a Linux Server...this is not an enterprise applciation but another point solution as you need all the pieces of the puzzle. As an enterprise application vendor what is needed to make it all work, you will be amazed

    1. Integration not the answer... Anonymous -- 15/12/05

      Look at all the problems Microsoft have had with IE being integrated.

      Besides, different programs are created by different development teams. How many companies do you know that integrate their products with another company's?

    2. You missed the point John -- 18/12/05

      Microsoft products from desktop to server to applciations are all integrated and work together exceptionly well. Why because they are designed to do so. My objection to Open Source as it is today is that many great pieces of software are written, which is great but there is nobody driving an overarching technical design which is how they will all fit together. You may say this is great but when I now have 10 critical apps and none of them talk to each other I am ten years behind my competitiors. If Open Soure can match Windows, office, outlook, CRM, ERP, sharepoint services and portal, Exchange, SQL Server, SMS, MOM, Active Directory in a single integrated solution I would throw all this out and get one. The problem is I can't and therefore would lose my competative advantage, I might as well use a typewriter. I am not saying MS is best of breed or worst of breed, but it satisfies my business requirements end to end. Offer me an alternative I would jump at the change

  8. Software cost is important... Anonymous -- 16/12/05

    "TCO is not just the software cost, it's the software plus all the hardware plus all the support over four years, so in the TCO of Windows and Office, the software is not a large part of that."

    Office 2003 Pro - £371 (PC World UK online price)
    50 PCs

    50 x £371 = £18,550

    Depending on the business and its profit margins, that could put them into debt for a few years. For some businesses, the cost of software is a very large part of the TCO.

    1. Free does not make cheap John -- 28/12/05

      Being Free does not make it cheap. Lack of integration with back end systems, poor quality of features, behind current technology etc also make free not cheap. It is a business decision to forgo these features to acquire free

  9. Why not use both MSO and OO Anonymous -- 16/12/05

    It doesn't have to be a one or the other proposition. The major problem I see with organizations or businesses moving to OO from MSO or Firefox from IE is that it is viewed as a one or the other proposition. Articles like this tend to reinforce that notion. The beauty of open source is that you can run along side proprietary and have a transition period if needed. You can convert to Open Office over a period of time and provide as-needed training. The majority of people don't use the majority of features in MSO. The relatively few features that are used are picked up easily in OO. People need to get over this. Run both.

  10. RE: OpenOffice Replacing MSOFFICE Training? Anonymous -- 22/12/05

    Whats all this talk about re-training people to use OpenOffice? With MS-OFFICE 12, the entire interface is different. With OpenOffice, although there are a few differences (ie native format is StarOffice compatible files) - the interface looks very similar to Office 2003. It wouldn't take as much to train staff to use OpenOffice as it would for the next-gen office.

    Personally, I am quite happy with the interface provided by Microsoft Office 2003, and I believe that MS actually had an excellent interface right there. To change it is stupid on their part. O2003 has proven to be very reliable, and easy to use. I do however use a combination of Office 2003 and OpenOffice on separate computers.

  11. Where are the facts Anonymous -- 25/12/05

    When people talk about replacing Microsoft Office with OpenOffice.org, they seem to point out that:

    1. The cost of the software is small (5-10%) of the total IT budget.
    2. The cost of training employees
    3. The cost of migration

    Well, I don't know about (1) and can only make educated guess about (3), but I can definitely comment on (2).

    I had worked in a company where they went from Office 97 to Office 2003. There were training materials as well as some short training for everyone, including contractors, temporary, etc. Out of curiousity, I asked just about everyone I knew if they made use of any new features. The typical answer is "NO" and keep using the Office the same way they did since Office 97.

    I can attest that to my own experience using the Office suite. Why? Because most of the time, people are using the Office for very basic tasks: creating a reports, tables, etc.

    Judging from the number of basic features people use in Microsoft Office and the features available in Office.org suite, I believe most people can do fine with OpenOffice.org.

    More importantly, I believe most people learn how to use the Office applications by experimenting over time.

    That is to say, the cost of training on OpenOffice is no more than that of the new version of Microsoft Office. Probably and more than likely less.

    It would be more realistic if reports can be made from companies already switched to OpenOffice.org. What problems do they run into? How big? How do they solve them? Would they consider the switch costly? Would they do it again? Would they recommend the switch? What advice would they give to those consider switching?

  12. Invalid cost comparison Paul Thomas -- 25/12/05

    MS Office 12 and later will require document conversion and retraining at the same levels as changing to Open Document Format through OpenOffie.

    There is no guarante that MS 12 will translate older formats at 100% accuracy either. Worse, there is no exisiting software to test so that guru's such as Dr McIssac can make pronouncements having any real value. Anyone needing advice should look upon such guru's with caution and should seriously question the quality of advice they offer in other areas as well.

    Businesses that believe the only cost to MS 12 upgrade is the licensing are in for a rude shock.

    There will be training.

    There will be conversion headaches.

    I have no axe to grind against MS. They have made a huge contribution to our world by helping proliferate IT. My complaint is always about the experts who proselytize MS without acknowledging that the coming changes are not as simple as load and go.

  13. Openoffice is not a matter of short terms costs Anonymous -- 27/12/05

    While it's true that the cost of MSOffice is a trifle compared with the total IT budget, let's not forget that when it comes to enabling a knowlege management system, using a proprietary format such as MSoffice over an open standards solution such as OpenOffice could cost major corporations million in terms of not just IT dollars, but in the business opportunity lost from not able to "mine" these closed format documents.

    1. Sharepoint Services John -- 28/12/05

      What do you mean mine these documents is a problem. Any search engine worth a grain of salt can mine all relevant information from a microsoft document format with no loss of anything. Install the free engine that comes with Windos 2003 and you will see what I mean

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