Citi is trying to cut $4.6B from its IT budget over the next few years. A laudable goal, especially given how much of that money is almost certainly pure waste, proprietary shelfware that never lived up to expectations. Or maybe IT priorities simply changed. Or something. The question, however, will budget cuts result in lower productivity? Definitely maybe. Nick Carr, implicitly pounding his utility computing p Citi is trying to cut $4.6B from its IT budget over the next few years. A laudable goal, especially given how much of that money is almost certainly pure waste, proprietary shelfware that never lived up to expectations. Or maybe IT priorities simply changed. Or something.The question, however, will budget cuts result in lower productivity? Definitely maybe. Nick Carr, implicitly pounding his utility computing pulpit, rightly suggests:When viewed in light of similar efforts by other corporate giants – Hewlett-Packard, for instance, is in the midst of an IT rationalization program expected to cut a billion dollars (a billion dollars!) from its IT budget – Citi’s announcement will up the pressure on other large companies to take a hard look at their IT spending and take advantage of new opportunities to do more with less. In the short run, the rationalization wave could be good news for IT vendors – at least some of them – as it will involve investing in the modernization of IT plants and equipment. But in the longer run, the trend at the top tier of the enterprise market is clear: IT spending is going down.More with less. Sounds reasonable. But what about doing more with more? That is, why not stop wasting money/people implementing and re-implementing proprietary software and redeploy those resources to open source?Yes, I know that the bulk of IT spend is not software, but rather services (i.e., people). But I also know from my own experience that open source software tends to be dramatically cheaper to both acquire and implement. Alfresco, for example, costs less than the ongoing maintenance contracts of our proprietary peers (Documentum, Microsoft Sharepoint, Vignette, etc.). Usually dramatically less.And our partners – many of whom do both proprietary and open source implementations – have told us repeatedly that implementing Alfresco is a drop in the bucket compared to the cost of implementing Documentum, for example. This is just one reason that roughly half of the world’s top financial services companies are now Alfresco customers. Banks are successful because they spend money wisely. They’re spending more and more with Alfresco now. Why is it cheaper? Because open source and open standards – as well as simplicity and clean architecture – make the SI’s job easier and, hence, the implementation cheaper. I have literally yet to compete in the same digit-space (meaning, if our deal is six figures, theirs is seven) as one of our proprietary competitors, despite delivering a superior solution. More and better software, at 1/10th the cost (literally). And it’s not as if Alfresco is the only open source vendor providing this kind of value. Many of my open source peers provide the exact same benefits. SugarCRM, just yesterday, announced its deal with the State of Oregon Department of Human Services, which realized massive savings going with SugarCRM. Examples abound (Zimbra @ H&R Block, MuleSource @ [large retailer that I’m not allowed to mention 🙂 ], etc.).Citi: I have a proposal for you. You can shave that $4.6B, improve productivity, and improve innovation and flexibility in your IT ranks. How? Buy more open source. The more you buy, the more you save. Funny thing, open source. Open Source