The secret behind PayPal: open source, and lots of it
The old way was to spend a lot of money on limited software and hardware. The new way, as PayPal's CTO (Scott Thompson) of three years found, is to scale out with lots of low-cost hardware and software. Open source enables this, and to marvelously good effect, as Thompson describes:
PayPal runs thousands of Linux-based, single-rack-unit servers, which host the company's Web-presentation layer, middleware and user interface. Thompson says he quickly saw the economic, operational and development advantages of open source and [Red Hat Enterprise] Linux technology. He now sees no other way to do it.
"When you're buying lots of big iron, as I did in other places I've worked, your upgrade path is $2 million, $3 million at a clip. You just had to buy big chunks of stuff to scale," he says. "Here at PayPal, our upgrade path is 10 $1,000 no-name servers, slapped into the mid-tier of the platform. And we just keep scaling it that way. It's unbelievably cost-effective."
You see how perceptions change? From 'the old way is the only way' to 'the old way is insanity,' and in a very short period of time. The article is fascinating for any CIO looking to scale out her IT. Open source offers a better way. Better performance and better value, at a much lower cost.
Just ask PayPal.
Matt Asay brings a decade of in-the-trenches open-source business and legal experience to The Open Road, with an emphasis on emerging open-source business strategies and opportunities. Matt is vice president of business development at Alfresco, a company that develops open-source software for content management. He is a member of the CNET Blog Network and is not an employee of CNET. Disclosure. You can follow Matt on Twitter @mjasay. 
Open Source is all about freedom to move ahead without worrying much about past investments.
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