Using open source software reduces your overall IT spend, according to a panel of CEOs at the Software 2004 conference in San Francisco.

Discussing the state of the industry were Tony Zingale, former president and CEO of Clarify; Jim Green, chairman and CEO of Composite Software; Juli Hanna Farris, founder and CEO of Scalix; Arup Gupta, president of Tata Consultancy; and Jeff Rodek, chairman and CEO of Hyperion.

As the economy begins to pick up steam, Zingale asked the group if they believe IT spending will increase. "It is going up, down and flat," said Rodek, explaining, "people think of total IT spending. But with open source and offshore, total spending can be flat. IT is growing by investing in process improvements. Software spending could be going up while total spend is flat, down or slightly up."

Farris agreed: "IT spending follows pain. Spending on Linux is a quick payback." Green also acknowledged that IT spending was changing: "More money is being spent on offshore and open source."

Companies are using their prior IT investments to get more out of the same infrastructure, the panel agreed. "We sold customers a Greyhound bus when all they needed was a Volkswagen," said Green. "Yes," added Farris, "open source, getting something for free, is a way to make up for our past sins."

The panel also all agreed that outsourcing jobs to other countries was a positive thing. "There is no big difference between managing a distributed development environment that is in say Boston, Reston, and Berkeley," said Green. "Add Bangalore and it doesn’t really make a difference."