Open-source software
Microsoft at the power point
The Economist, Sep 11th 2003
Governments like open-source software, but Microsoft does not
IN MAY, the city of Munich
decided to oust Microsoft Windows
from the 14,000 computers used by
local-government employees in
favour of Linux, an open-source
operating system. Although the
contract was worth a modest $35m,
Microsoft's chief executive, Steve
Ballmer, interrupted his holiday in
Switzerland to visit Munich and
lobby the mayor. Microsoft even
dropped its prices to match Linux —
a remarkable feat since Linux is
essentially free and users merely
purchase support services alongside
it. But the software giant still lost.
City officials said the decision was a
matter of principle: the municipality
wanted to control its technological
destiny. It did not wish to place the
functioning of government in the
hands of a commercial vendor with
proprietary standards which is
accountable to shareholders rather
than to citizens.
Worryingly
for
Microsoft,
Munich is not alone in holding that
view. Across the globe, governments
are turning to open-source software
which, unlike proprietary software,
allows users to inspect, modify and
freely redistribute its underlying
programming instructions. Scores of
national and state governments have
drafted legislation calling for opensource software to be given
preferential
treatment
in
procurement. Brazil, for instance, is
preparing to recommend that all its
government agencies and state
enterprises buy open source.
Other countries are funding
open-source software initiatives
outright. China has been working on
a local version of Linux for years, on
the grounds of national selfsufficiency, security and to avoid
being too dependent on a single
foreign supplier. Politicians in India
have called on its vast army of
programmers to develop open-source
products for the same reasons. This
month, Japan said it would
collaborate with China and South
Korea to develop open-source
alternatives to Microsoft's software.
Japan has already allocated ¥1
billion ($9m) to the project.
Why all the fuss? Modern
governments generate a vast number
of digital files. From birth
certificates and tax returns to
criminal DNA records, the documents
must be retrievable in perpetuity. So
governments are reluctant to store
official records in the proprietary
formats of commercial-software
vendors. This concern will only
increase as e-government services,
such as filing a tax return or
applying for a driving licence online,
gain momentum. In Microsoft's case,
security flaws in its software, such
as those exploited by the recent
Blaster and SoBig viruses, are also a
cause of increasing concern.
Government
purchases
of
software totalled almost $17 billion
globally in 2002, and the figure is
expected to grow by about 9% a year
for the next five years, according to
IDC, a market-research firm (see
chart).
Microsoft
controls
a
relatively small part of this market,
with sales to governments estimated
at around $2.8 billion. But it is a
crucial market, because when a
government opts for a particular
technology,
the
citizens
and
businesses that deal with it often
have to fall into line. (In one notable
example,
America's
defence
department adopted the internet
protocol as its networking standard,
forcing contractors to use it, which
in turn created a large market for
internet-compliant products.) No
wonder Microsoft feels threatened
— the marriage of open-source
software and government could be
its Achilles heel.
Policymakers like open source
for many reasons. In theory, the
software's transparency increases
security because “backdoors” used
by hackers can be exposed and
programmers can root out bugs from
the code. The software can also be
tailored to the user's specific needs,
and upgrades happen at a pace
chosen by the user, not the vendor.
The open-source model of openness
and collaboration has produced some
excellent software that is every
bit the equal of commercial,
closed-source products. And, of
course, there is no risk of being
locked in to a single vendor.
That said, open-source is no
panacea, and there are many areas
where proprietary products are
still far superior. Oracle, the
world's second-largest software
company, need not worry (yet)
about governments switching to
open-source alternatives to its
database software. But Microsoft
is vulnerable, because an opensource rival to its Windows
operating system exists already,
in the form of Linux.
If Microsoft is indeed
squeezed out of the government
sector by open-source software,
three groups stand to benefit:
large consultancy firms and
systems integrators, such as IBM,
which will be called in to devise
and install alternative products;
firms such as Red Hat or SuSE,
which sell Linux-based products
and services; and numerous
small, local technology firms that
can tailor open-source products
for governmental users.
As a result, the company has
been fighting back. Microsoft and
its allies have sought to discredit
open-source software, likening its
challenge
of
proprietary
ownership to communism and
suggesting that its openness
makes it insecure and therefore
vulnerable to terrorism. The firm
also created a controversial slush
fund to allow it to offer deep
discounts to ensure that it did not
lose government sales to Linux
on the basis of price. And
Microsoft has paid for a series of
studies, the latest of which
appeared this week, which
invariably find that, in specific
applications, Windows costs less
than Linux.
More strikingly, Microsoft
has been imitating the ways of the
open-source “community”. Last
year, the firm launched a “shared
source” initiative that allows
certain approved governments and
large corporate clients to gain access
to most of the Windows software
code, though not to modify it. This is
intended, in part, to assuage the fears
of
foreign
governments
that
Windows might contain secret
security backdoors. Microsoft has
also made available some portions of
the source code of Windows CE,
which runs on handheld PCs and
mobile
phones,
to
enable
programmers to tinker with the code.
Tellingly, this is a market where the
company is a straggler rather than a
leader.
Jason Matusow, Microsoft's
shared-source manager, says that
developing
software
requires
leadership and an understanding of
customer needs — both areas where
proprietary-software
companies
excel. As for proposed legislation
that would stipulate one type of
software over another, it is
anticompetitive and could leave
users hamstrung with products that
are not the best for their specific
needs,
says
Robert
Kramer,
executive director of the Initiative for
Software Choice, a Microsoftsupported lobby group. Microsoft
will advance these views next week
in Rome, where it is hosting the
latest in a series of conferences for
government leaders. But the signs
are that many of them have already
made up their minds.