Linux: making small businesses possible

by Sander Marechal

Here at Lone Wolves we do more than just blog and write open source software. We have a small company as well and we build websites for equally small businesses in the area. It's nothing big, not even full time, but it pays for this website and the servers we need to keep our projects running. It's Linux that made this possible. If we would have been stuck on the Windows platform there is no way we could have done what we do because it would simply have been too expensive.

I'l admit that our company is a bit of a special case so I'll give some background first. Skip this paragraph if you are just here for the gory details. When we started this company we had two requirements. The first was financial independence. We did not want the company income added to our personal income for tax reasons. The second requirement was that it had to be cheap. Here in The Netherlands the cheapest financially independent company form (a so-called B.V.) needs € 18.000,- starting capital. Other forms are usually considered ill-suited to run a company and make money. But making money was not what we were after. We just needed a way to pay the bills for our hobbies. In the end we settled for a Foundation. It's cheap to set up, financially independent and it's able to make money. It's just not able to give away the money to stakeholders, that's all. Perfect for us!

Enough of the boring background and back to the money. We had about € 1.500,- to set up our company, buy the hardware and software we needed and get going. We managed, thanks to Linux. We would have needed at least 3-4 times the amount we had if we were stuck on Windows. Our setup isn't too complicated. We have two desktop PC's that we use to build websites, one in each of our homes. We also each have one server. They are used as development server, as webserver for the applications we cannot put on shared hosting (such as subversion and bugzilla) and we use them as backup servers. They are also each other's failover. For this comparison I am leaving out anything that would have been the same in either scenario, such as the shared hosting, hardware, domain names, etcetera. I am also leaving out the work we put in—the fabled "TCO". The time we put in is free and no matter what environment we would use, it would have taken time to implement. TCO is interesting for companies that pay for maintenance. We don't.

I am going to give you three scenarios. The first one will show the cost if we would have drunk the kool-aid and bought the latest and greatest of anything we needed and Microsoft or it's preferred ISVs offered. The second scenario shows a more realistic Windows setup that we would use on a tight budget. The third scenario is what we actually use: Linux.

Scenario 1: Bill Gates and partners are my heroes

We love Bill Gates and anything he cares to sell us. And sell us he will. A hefty € 6.440,- towards his pockets. More than four times our entire starting "capital". See the sidebar for the exact list of software we would have bought in this case. One server would get MS-SQL to run the development sites. One server would get SourceSafe and run our code repository. It's not entirely true to our current setup because the servers cannot use each other as a failsafe. We would need to double-up on SourceSafe and SQL server licenses for that. Also, I have no idea how CAL's work so that might have further driven up the cost of a public code repository. Notice that under "We love Bill" we would be programming .NET sites.

Scenario 2: A realistic Windows shop

In this scenario we owe Bill and his band of brothers only € 2.800,-. Less than half the previous scenario but still well over our total starting budget. We replaced Vista with XP. Replaced the development enviroment with PHP and it's associated tools and replaced one server with a cheaper SBS edition. In this scenario the failsafe problem from the previous scenario solved because the code repository and the SQL server are open source software. The added cost of one regular 2003 server over the SBS server is because the SBS license only allows one SBS server. All other servers need to be regular 2003 servers. If I had to design a webdevelopment shop based on Windows, this is how I'd do it. Maybe I would add € 320,- to replace one Paint Shop Pro with Photoshop, but only if the developer makes use of the extra features.

Scenario 3: Our Linux shop

Here is the setup we are currently using. Everything runs Debian Etch GNU/Linux. We use Bluefish and Kate for programming, and GIMP and Inkscape for graphics. Backups are done automagically with rsync. It's all open source software and all pretty standard stuff at that. Because it costs nothing we were able to spend our entire starting capital on registering the company, buying hardware and getting hosted. I was able to cheaply get a second hand HP ProLiant from my old boss, who also donated some even older HP NetServers (hat-tip to DHL).

In short, without Linux, our company, our self-financed hobby would not exist. I am sure the same is true for many start-ups. Hardware prices have been going down over the years but the cost of proprietary software has only risen. Start-ups need much more of an IT infrastructure to get going and the license costs are dragging them down. How much more capital would be invested in actually useful things if open source software was the norm instead of the exception? It is no coincidence that virtually all the successful start-ups of today are powered by open source software. Without it, I would still be sitting in the basement, wondering how I'm going to pay for another year of webhosting.

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#1 Anonymous Coward

Note, that buying Photo Shop, you are not paying Bill Gate$.

#2 Sander Marechal (

I know. But I am still buying from a preferred ISV, thus supporting the Windows ecology. I am sure that Corel pays enough to Microsoft for licenses and other things.

#3 Tim webster

I use Scenario 2-3 for my small business.

The 2 servers of course runs linux. But I require windows XP on two desktops to run SolidWorks. All other desktops/laptops run linux. Unfortunately one copy of SolidWorks cost more than your complete I love Bill Gates setup.

#4 Anonymous Coward

Pretty clean and clear cut assessment that drives the point. That is probably why most PHBs miss it. It is too simple.

Now! are you planning to donate to Debian!!! I very much hope so.

#5 Anonymous Coward

really well written with useful info. thanks

#6 Anonymous Coward

Not that linux is bad -- it is a good development env. that should be used along with Microsoft but the first variant (6600) looks questionable.

Actually Microsoft is pretty small business/developers friendly. That's how they got to the top.

You can get most Microsoft server and desktop sftware (Visial Studio is extra) for $500 a year by becoming a partner (10 installation instances permitted per package). That includes all updates.

There are several free Visial Studio "mini-distributions" (C++, VB, C# and something else) that are adequate for small firm.

#7 Devon

Actually you could achieve the same thing with the mac platform. I also operate a small business and we also use open source software. However we have found that mac has given us the best of both worlds. CS3 is a absolute must for us.


NeoOffice (productivity) $0.00
Apache (Web Server) $0.00
Ruby on Rails (programming) $0.00
Textedit (text editor) $0.00

We use CS3 in replace of Gimp, and inkscape, and bluefish sometimes you just have to have all the tools integrated and complete power.

#8 Sander Marechal (

Anonymous Coward #4 wrote:
Now! are you planning to donate to Debian!!! I very much hope so.

No solid plans, but I do intent to do that. Usually I donate to smaller projects.

Anonymous Coward #6 wrote:
You can get most Microsoft server and desktop sftware (Visial Studio is extra) for $500 a year by becoming a partner (10 installation instances permitted per package). That includes all updates.

Are you talking about MSDN licenses? Because last time I checked MSDN lcenses were a lot more than $500 and came with all sorts of additional restrictions. I also tried calculating the "I love Bill" package through Microsoft's partner volume license website, but it just hangs halfway through in Firefox (figures... :-)

Devon wrote:
Actually you could achieve the same thing with the mac platform.

True. But I can't put OSX on refurbished/donated hardware. Software costs would come down somewhat but hardware cost would go up. I must admit that those new 24" iMacs look very sweet though, and they are not as expensive (comparatively) as Macs once were.

CS3 is just overkill for us. We primarily focus on development and implementation. Any real design work that comes our way is relatively light and can be done with GIMP and Inkscape. We use freelancers for high end designs.

#9 stomfi

I work at a small business who until this point exclusively use Windows on 8 desktops.

To increase data security and back up ease of use, they recently decided to install a file server. Much to my surprise their Windows support consultant, who has always derided Linux for the past 10 years, recommended a Linux server because it was more robust and secure.

This wasn't a price thing as they recently spent $70K on a CAD/CAM software license, but this was a dyed in the wool MS guy, recommending Linux.

On the cards is also a Linux workstation for their CAD/CAM software as he has told them it will run faster, a Linux print server and eventually a Linux virtual MS Windows server, so they reduce the complexity of running their desktops, and get better Internet security.

Of course I could have installed it all for free, but businesses have this mindset where they see another business as being more reliable or expert than their own employees.

This is still a pretty amazing shift in perception for a MSCE. Yet he tells me all the very small business support people he knows are going down this route, as the unwanted work they have to perform for security breaches, crashes, and data integrity is much much less.

I can see that eventually he will have to generate more work for himself by finding and recommending Linux desktop software to replace the Windows only versions they use at present, and of course he will support it by learning Python etc.

When the technical support MSCEs start retraining themselves as Linux experts, the writing is on the wall for Windows in small offices.

#10 KillerBurger

depends from business to business. Actually GIMP is good but photoshop is better. depends if you need support to u r software or just for strict professional usage only rather than extra features.depends from platform to platform, business to business and Indvidual to individual.

#11 Azmi Hayaze (

Hi Sander, cool. I love open source too. But you are not mentioning the technical support / administrator fees for both OS. I guess its different.

All the best.

Azmi Abdulkarim Hayaze'

#12 Sander Marechal (

stomfi wrote:
businesses have this mindset where they see another business as being more reliable or expert than their own employees.

In the large businesses I have worked it wasn't about being reliable, but about being able to blame an outside party if things went wrong. Shifting blame seems to be big with higher management, unfortunately.

Azmi Hayaze wrote:
you are not mentioning the technical support / administrator fees for both OS.

Yes I did. I mentioned that it did not matter for this comparison since all the installation and maintenance is done by myself in my own time. I don't pay someone to support it.

#13 Derek

Microsoft offer something called Action Packs. This allows a business to have [almost] all the MS products for about GBP150 per year. Still, I cancelled my subscription a year ago, and I don't regret it.
Nice article.

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