The secret behind PayPal: open source, and lots of it

PayPal has discovered what the offline world will soon need to discover: open source offers superior scale.

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.

Tech Culture
About the author

    Matt Asay is chief operating officer at Canonical, the company behind the Ubuntu Linux operating system. Prior to Canonical, Matt was general manager of the Americas division and vice president of business development at Alfresco, an open-source applications company. Matt 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. He is a member of the CNET Blog Network and is not an employee of CNET. You can follow Matt on Twitter @mjasay.


    Discuss The secret behind PayPal: open source, and...

    Conversation powered by Livefyre

    Show Comments Hide Comments
    Latest Articles from CNET
    Mozilla CEO slams Microsoft over Windows 10 browser defaults