Like you perhaps, I've watched the evolution of open source software with some interest and not a little skepticism. But the movement hasn't gone away and continues to grow almost daily, and is now important enough to attract the interest, and often commitment, of large multi-national corporations. And even publications like Fortune are running articles that lend credibility and seriousness to a movement presumably only geeks could love.
What is open source software and why should you care? I had a chance recently to visit with Doug Moore, one-time developer of Applied's Diamond carrier system and now president of Innovex Technology, a small Birmingham company that specializes in providing open source solutions to the insurance industry. Moore is passionate about open source, perhaps surprising for someone who knows a lot about commercial software, support, and the vagaries of development. Here's some of what I learned that I think agents should know about.
What is open source software?
Most open source software (OSS) is free. It can be downloaded from a number of Web sites. OSS includes the application software, that is, the useful program itself, as well as the source code and tools used to create it. Thus, OSS recipients are in a position (provided they have the technical skills) to make changes to and improve the software. OSS users aren't restricted in how they use the software — with the caveat that they can't sell what was provided free.
Of course, there's no free lunch; never has been. OSS users pay for their use of the free software by returning any improvement back to the community for its unencumbered use. Therefore, open source isn't the way to go for proprietary applications.
Another important dimension of the open source movement is the creation, adoption, and use of publicly created and generally accepted standards of all kinds. Standards are the lingua franca on which programmers all over the world depend to create software that works and plays well together. In our industry the ACORD XML standards are a key element. But many other standards bodies, usually with the active involvement of companies like Microsoft and IBM, are busy creating hundreds of standards that will make it increasingly viable to connect anything to anything — and that process makes OSS increasingly viable.
How does OSS software get created in the first place and then maintained and improved?
The developing OSS movement is created by hundreds of thousands of volunteer programmers across the planet. Why do they do it? To some extent, they probably do it for the love of the process and participation in a special kind of community. Then too, no doubt some like to show off their skills — for ego gratification and to add to their portfolios. How does the process happen? Through informal, but effective, project teams that remotely discuss potential changes, make decisions, do the code, and then test like crazy.
OK, so some programmers are having fun in their spare time. Where's the business model? Who's making money out of OSS? Who can you depend on to help? A number of companies have appeared that package open source software, bringing together disparate elements to create a complete office productivity solution — for both generic and industry specific applications. And some companies, like IBM, provide highly tailored systems integration and support services for open source (and of course commercial) software.
Moore's company, Innovex, is interested in providing OSS systems integration services for the insurance industry to agents, MGAs, and carriers. He's pulled together relevant open source software and is in the process of creating insurance specific modules that can be brought into the insurance environment in combination with open source to provide complete, end-to-end solutions.
What can open source software do?
Open source has tended to focus on operating system and generic application areas. Linux, a server (and sometimes workstation) operating system competes with Unix and Microsoft offerings. OpenOffice is an office productivity suite that competes with Microsoft Office. A variety of mail servers compete with Exchange — Mozilla with Internet Explorer, Apache with Internet Information Server, MySQL with SQL Server, Oracle, and DB2, and so on. You get the picture. And much of this open source software is first rate. Apache is employed on more Internet servers than any of its commercial competitors. MySQL has a reputation for being very fast, if austere, and is used to support thousands of commercial Web sites.
Open software can do a lot, but so far very little for the insurance industry and agents in particular. As far as I know, no one has created an open source management system, rating, proposal, or other agency software necessities. The potential use for open source software today, then, is as an alternative to generic operating system and office productivity software.
What's the potential advantage
of open source to agents?
Moore has done some research and created some cost comparisons between outfitting an agency with open source versus primarily Microsoft operating system level and office productivity software. He says he can show that for a 25-person agency the initial savings from using open source could be $50,000, with similar additional savings relating to total cost of ownership over time.
Where would these savings come from? If an agency could use open source for its basic infrastructure instead of Microsoft's, it could dispense with Exchange Server ($7,000), ISA security server ($1,420), Biztalk for XML management ($7,000), SQL Server ($11,100), Windows 2003 Server ($6,000), Office ($11,000), and odds and end such as Windows XP for the workstations. That brings the total to about $50,000, which is not pocket change!
What's the catch? A great deal of agency software runs on Windows and uses SQL Server. That means an agency needs to have Windows on the desktop, a Windows file server, and a database server, so the real practical savings due to open source software would be much smaller than $50,000, resulting, for instance, from saving the cost of the Internet/intranet server, e-mail server, and Office. But even swapping out Office is problematic, since vendors sometimes use the built-in programming language provided with Word and Excel and not available with OpenOffice.
Is open source a pipe dream for agents?
Not a few agents would probably like to reduce the toll they pay Microsoft by using open source solutions provided by vendors like Innovex, but is it really possible? According to Moore, it certainly is in areas dealing with the deployment of Internet related solutions. Open source isn't a complete agency solution today, and it would make no sense for agents to think they could swap out everything they have and replace it with free versions.
On the other hand, Moore believes that open source will continue to become more and more important as agents cope with rising costs. They need to cut costs, yet their technology expenses grow each year. Something must be done.
At the ACORD Conference in Orlando in May, Moore demonstrated a $200 Wal-Mart PC running Linux with a Windows-like user interface, office productivity software, database software, and server software. He said it would be no trouble to fully equip a five-user agency — hardware and software — for under $2000.
That wouldn't include agency specific software, but imagine what might be possible to the extent that agents can use ASPs for their management system, quoting, and other software needs via vendors and carriers. Provided the ASP software is fully browser-based and doesn't require any Microsoft software to run locally, it's not unreasonable to imagine agencies going about their business online, with only an isolated (a workstation or two) Microsoft presence.
Open source isn't quite ready for prime time in agencies, but one can
see how it might be. One way or another it's likely to have a significant
effect on agents, carriers, and vendors. And in the meantime, before it becomes
commonplace, consulting groups like Moore's Innovex can help agents
understand and benefit from open source solutions that are appropriate for
them.
© Copyright 2003 by Sound Internet Strategy. All rights reserved
Open software can do a lot, but so far very little for the insurance industry and agents in particular.
…Moore believes that open source will continue to become more and more important as agents cope with rising costs.