Open source not free, Senate hears

By Liz Tay on Feb 10, 2010 3:01 PM
Filed under Software

Government could be stuck with $500m software spend.

The cost of transitioning from proprietary software to open source could outweigh any benefits of making the switch, according to the Australian Government Information Management Office (AGIMO).

AGIMO's policy and planning division general manager Graham Fry told a Senate Estimates Committee hearing that scoping the potential for a platform change could cost more than it saves.

"Agencies are obliged to consider value for money on each occasion they apply a software," he said.

"That means considering value for money between the alternatives of open source and proprietary software.

"If the cost of assessing it was greater than the cost of the software, you would have to think twice."

The Government spent over $500 million on software annually, according to 2008-09 data from the senate's Finance and Public Administration committee.

A 2007 AGIMO survey revealed that 68 percent of government agencies were either piloting or using open source software.

But further questioning from Greens Senator Scott Ludlam yesterday revealed research had not been undertaken since. AGIMO took on notice a suggestion that the research be revisited.

Centrelink, the Australian Bureau of Statistics and National Archives of Australia were known to use open source products; however, it was up to individual agencies to make procurement decisions, AGIMO said.

Greens spokesperson Senator Scott Ludlam had been pushing for the government to adopt open source software to promote openness and reduce costs.

While open source software may reduce licensing costs, the cost of support could be an issue.

"Open source does not necessarily mean no cost," Fry said. "There cannot be an assumption that we would save by doing that [converting to open source software]."

32 comments in this discussion

"It is true to say that there are a lot of complex factors to consider and a lot of costs involved in a wholesale switchover to any new set of technologies, either proprietry vendor change or ..."

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Comments: 32

hellfire Feb 10, 2010 3:51 PM	Just as a comparison Compare Open Office and Microsoft Office and then tell me it is not worth spending the money to by the Microsoft Office Program? The user gets what he pays for in my opinion.
FrankJackson Feb 10, 2010 4:09 PM	@hellfire: You are making the assumption that they want this on desktops. Indeed OSS desktops still have a way to go before being able to really compete with Windows, but believe me the govt does not spend $500mil on XP/Vista/office licenses every year. A lot - if not most - of that money will be for server software licensing and not have much to do with desktop software purchases.
Sams Feb 10, 2010 4:53 PM	I find OpenOffice more than adequate for our home/office needs - in fact, it is excellent. Where is the one-button PDF export on MS Word? I wouldn't dream of sending a draft proposal or contract without PDFing it first. As far as I'm concerned, businesses that send MS Office documents to external contacts might as well add the disclaimer "I am a moron" in their email. The people I've talked to that think MS Word is better invariably perceive a lack in OpenOffice because they expect the behaviour, menus and function names to be identical with MS Word. In many common cases they are, but some (like 'pivot tables') are under different names. From the article: "Open source does not necessarily mean no cost," Fry said. "There cannot be an assumption that we would save by doing that."" Government MS-loving doublespeak: nobody is saying assume there will be a saving - look at the case studies instead.
Graeme Harrison (prof at-symbol post.harvard.edu) Feb 10, 2010 4:59 PM	I agree with Sams and I believe Hellfire is dead wrong in claiming "You get what you pay for" wrt open source. Open Source is probably the antithesis of this oft-applicable (but here inapplicable) cliched adage. What breaks the nexus between cost and value is the ability to produce 100m copies of OpenOffice for negligible extra cost over producing one copy. When you buy a physical item, there is cost in the manufacture, so often 'bargain items' are found to be deficient because they sought to cut costs in the manufacture. The answer is never to force every app in every government department to change to open source. BUT good public policy would be to require use of open source standards and open source apps for common apps where they are available, unless you write a justification for staying proprietary. In particular, it should be outlawed to specify submission of a DOC or DOCX format in any submission to a publicly-funded entity. Instead, open source document formats (Open text or PDF) should be encouraged. The government never says, submit your comments via a TNT satchel... that would be unacceptable to overtly sponsor a proprietary solution... well in the same way, all inter-departmental documents, public discussion documents, public submissions etc should favour Open Office (ISO world standard) over MS' proprietary formats. [And yes I know MS bribed certain countries' standards committees to get its still-proprietarily-controlled formats to get some ISO standing.] Open Office IS the best/easiest/cheapest roll-out of open source possible. And the only conflicts are caused by MS going down proprietary routes to remain inconsistent. So best to shift our education of kindergarten classes through to all public sector institutions to truly-open document formats as the first step to remove such pressure to remain in full "vendor lock-in" mode. Other roll-out for servers and workstations will then follow.
Graeme Harrison (prof at-symbol post.harvard.edu) Feb 10, 2010 5:03 PM	And Sams, when someone sends a DOCX attachment to external parties, you know that is equivalent to saying "I am a COMPLETE idiot." [Because they got sucked into a viral marketing plan by MS to get everyone else to have to upgrade their Office software, because some idiot will insist on sending some document in the latest MS version.]
Private Citizen Feb 10, 2010 5:56 PM	"Proprietary Software rules!" - now is that a statement of fact, opinion or just flamebaiting - your choice :-) (@Sams / @Graeme Et Al)
Graeme Harrison (prof at-symbol post.harvard.edu) Feb 10, 2010 6:23 PM	Actually, it can be hard distinguishing between a "cliched adage" and a simple "platitude" ;-) But as further proof of my claim that "You get what you pay for" does not apply to open source, you have to look no further than Wiki. Anyone who has used Wiki for research ought think "How come I can have the most comprehensive encyclopaedia ever devised - and it costs me nothing?" The answer lies in the fact that the creative commons environment gives people the incentive to participate that does not happen with a commercial venture. But even use of Google search engine, and 98% of the rest of the internet (the free bits) disproves Hellfire's platitude.
ITrant Feb 11, 2010 12:00 AM	The dirty little software secret is that support always costs more than the software price - Open Source or proprietary. Save on the purchase price.
Ace Feb 11, 2010 11:05 AM	While I am sure there are plenty of Open Office users about in Govt, I doubt this has much to do with the OSS the Govt is talking about. More likely they are referring to database, web servers, app servers, PHP & Java web apps (like Liferay) and other middleware and web-based systems. Desktop is probably the last place to see a change to OSS. With regard to 'You get what you pay for', the great thing about OSS is that anyone can analyse it, customise it or re-purpose it. That and lack of licensing cost are primary reasons serious OSS projects are often superior to their market-leading commercial competitors. For example, check out Oracle 10g or SQL Server 2008 vs Postgres 8.4. Postgres out-performs the others in almost every department for a total licensing cost of $0 per annum. It's got to the point where now Oracle (and maybe MS) licensing now prohibits the publishing of independent benchmarks - too embarrassing?
Slatts Feb 11, 2010 1:37 PM	Just an aside, if you want to publish your word 07 .doc or .docx as a pdf, get the office plug in here: http://www.microsoft.com/downloads/details.aspx?FamilyID=f1fc413c-6d89-4f15-991b-63b07ba5f2e5&displaylang=en
Sams Feb 11, 2010 2:04 PM	@Slatts - ta, I can point some of my clients at that :-)
jimmy Feb 11, 2010 2:51 PM	@Sams There's a free open source program called PDFCreator from pdfforge that I've used in both commercial and home enviroments that is excellent for creating pdf files from almost any program, http://www.pdfforge.org/pdfcreator
Sams Feb 11, 2010 3:34 PM	I'm sure the MS plug-in will be fine. As for us in our company, we all use Linux and OpenOffice - the latter having convenient (and superb) one-button PDF export.
arjenkamphuis Feb 12, 2010 12:10 AM	What AGIMO seems to forget is the economic difference between importing $500M of software licenses from abroad vs spending the same amount of public funds on local IT-services companies. Sure the number is the same but the impact is not. $500 represents hundreds of potential jobs in Australia that are currently exported to the US and other supplier countries. This is aside from the issue of national sovereignty in the area of public information processing. A government should have control over its information systems and this government clearly does not (not being able to change supplier means you're not in control). Moving towards opensource in a step-by-step controlled manner is just good public policy that Germany, France and most of Latin America are already pursuing.
DigiGuy Feb 12, 2010 7:58 AM	I can't believe our freedom loving Government could entertain the notion of giving away Billions of dollars of future jobs and industry growth for Australians just so they won't upset Microsoft and co. There is a perfect example of what to do in this situation going on now in Munich, it is deliberately slow so that no stake holders are left out, everyone is a winner.Some successful recent changeovers include NYSE/Euronext, LSE is changing to a Linux solution asap after the multiple spectacular Microsoft failures,The French Gendarmerie is dropping their Microsoft systems for a Linux fix,even the US Whitehouse is going FOSS.Just roll in some French and German government appeals to their citizenry to stop using internet exploder and a bunch of British hospitals going down from malware attacks in the last 4 or 5 weeks and a FOSS solution looks quite compelling actually. How much would it cost to clean up Centrelink if it got taken down for a period of 2 or 3 days by one or more of the millions of pieces of malware ? The cost would be horrendous. If we don't start now $500M will look a bargain in the future when we have no choice and a much higher price tag.
Who has an agenda? Feb 12, 2010 11:52 AM	Talk about AGIMO having an agenda: "The cost of transitioning from proprietary software to open source could outweigh any benefits of making the switch" - Yes, it "could" but but the chances are very slim. There are thousands of examples of companies switching to Open Source from proprietary and saving, but I don't see any the other way around. "Open source does not necessarily mean no cost...There cannot be an assumption that we would save by doing that [converting to open source software]." - The software if free. Support is OPTIONAL which doesn't cost, but no more than support for proprietary which have large upfront license fees, novation fees, yearly license fees + COMPULSORARY support fees. You are also not locked in and reliant of the proprietary vendor innovating for you. In general, the costs are about 50%-10% that of proprietary, so yes you can make that assumption. "If the cost of assessing it was greater than the cost of the software, you would have to think twice." - By that logic, you should never access any new proprietary software either. You should never test Windows 7 and the latest office. No wait, they force you to upgrade at a higher cost, don't they. Worst of all is probably Oracle which charge enormous license fees when they could get the same outcome with open source products. Spending $500M on local support is better than importing $500M to international software makers. If these AMIGO guys aren't in the pocket or wined and dined by at least a few proprietary vendors (e.g. Microsoft & Oracle), I'll be shocked. This is why lobbying needs more regulations.
boz Feb 12, 2010 2:46 PM	I run my own humble little business using open-office, thunderbird and a linux server, but windows XP on my desktop as I develop mostly windows software at this momment in time. It is no problem to receive a DOCX or XLSX from a client but will usually return the reply as PDF. Microsoft locks in Office from the very cheap bulk licencing deals they do with schools. Using open office is no problem for my daughter but when teachers teacher says she has to do her homework in publisher and so therefore get her parents to buy ms office it makes my blood boil.
Consultants wasting tax payers money Feb 12, 2010 3:24 PM	Governments around the world (including US, UK, Canada, and even Hungary, Jordan and Vietnam) have programs to encourage the adoption of open source technologies – based on carefully researched risk and savings analysis. Ireland’s Tax System runs on open source software – what would be a greater risk for any government? The fact is that Open Source is the next wave and proprietary vendors are simply using IBM’s old FUD (fear, uncertainly and doubt) tactic to try to hold back the flood waters that will eventually dilute their massive license revenues. You’ll know when the tide has changed when Oracle ceases splurging your license fees on America’s Cup Yachts rather than the software improvements.
Real Stats!!! Feb 12, 2010 3:33 PM	The current ICT deficit is $28 billion per annum(2008 ref: https://www.acs.org.au/09icttradeupdate/ict_trade_update.pdf). That is $28 billion more money we spend on proprietary solutions from overseas than we export. Could Graham Fry explain how switching to Open Source software with no license fee, and paying for local talent in Australia could cost more than proprietary software?
Ace Feb 12, 2010 4:09 PM	Badly written OSS could well be more costly to support than well written proprietary software. However, with OSS, at least you can tell if it's badly written. To me it's just a choice, and cost is only one factor. Support is another. Excellent OS projects are often as good, if not better, than competing proprietary products, and should be evaluated on equal terms. May the best product win the day!
cynic Feb 12, 2010 4:13 PM	Last year the Early Government Workshop in Canberra lead by AMIGO was attended by major vendors including (Microsoft, Oracle, Red Hat, etc). The proprietary vendors, without any evidence to support their position, opened by forcefully stating that Open Source is too risky and isn’t really an option. It is disgraceful that our government pays purportedly independent consultants (who operate “Centre(s) of Excellence” consultancies around these proprietary solutions) to advise them to buy proprietary products. If they want to talk risk, just look at the risk profiles of any of Oracle’s ERP failures around the world, and closer to home. Why does the WA Government continue to pour hundreds of millions of taxpayer dollars into the black hole they call Shared Services – expenditure estimates to date are $600+ million? The answer is they’re totally locked into a proprietary Oracle solution and lack the will and guts to face truth. Instead of braving the consequences they’ve locked the taxpayer into a never ending financial quagmire, again with the advice of consultancies with vested interests.
cynic Feb 12, 2010 4:26 PM	Additionally, how many extra jobs would the Australian Government create by adopting an Open Source platform to replace Microsoft Office, and commit 50% of its annual license fee savings ($250m) to support Australia's Open Source industry to support the platform? This would provide a great boost to the Open Source community and provide a clear message to the other proprietary vendors. The proprietary vendors need to be put on notice that the ICT budget rape they practice with every license extension and/or renewal won't be tolerated and that the government won't be held captive any longer.
graeme.speak Feb 12, 2010 5:01 PM	This scope now extends far beyond just an OSS debate. "Cloud" platforms now leverage OSS to the extreme. GoPC.net, an Australian cloud platform, hosts an AppStore where users click to select normal desktop apps which add to their personal "cloud desktops". OpenOffice is just one example and by default is pre-configured to Microsoft formats. Our admin office runs this alongside a traditional Microsoft network and everybody shares the same documents whether on a PC or GoPC. We can provision new users in seconds and we estimate the cost savings are well over 90%. Full disclosure, I work here at GoPC.net. And we would go broke if we waited for our government to wake up. Instead we have real solid interest from Europe and North America even though it's hosted here in Australia. There are now many examples of successful desktop OSS deployments through government right across the globe from Europe to South America.
Ace Feb 12, 2010 5:25 PM	A quick surf across the Pacific show the Republican party running the primary web site (www.gop.gov) on Liferay, the Whitehouse (www.whitehouse.gov) running on Drupal, as is the NY State Senate. Would these people want to stake their reputation on unreliable OS? No way. 70,000 French police desktop PCs needed a better browser, and along came Firefox...and OpenOffice...and Ubuntu...and a saving of 50million euros. IMHO, the single Govt Australian entry in the OpenOffice page (http://wiki.services.openoffice.org/wiki/Major_OpenOffice.org_Deployments) is an embarrassment.
plover Feb 15, 2010 3:59 PM	"it was up to individual agencies to make procurement decisions, AGIMO said." The thing about FOSS software is that you can avoid the expensive and cumbersome Government procurement processes altogether. So I suspect many Government agencies have no idea of how much open source software they are already using. Similarly it hard to believe that only 86 percent of agencies were using open source software back in 2007. I mean not perl???? No apache or bind anywhere?? I doubt it....
DJ Feb 15, 2010 9:43 PM	Of course Open Source software is NOT free. The "Free" part refers to licensing under the GNU. Yes, there are still design, integration and migration costs. Yes, there are still operational costs. Yes, there are still ongoing costs, just like any software platform. Stop wanking on about the free upfront license cost, and start looking at the many benefits of Open Source software such platform independence, interoperability, ability to modify and enhance. What other software allows this ? At the end of the day, it's all down to the technical talent you have working in your organisation. If they are good at design, deployment and ongoing support (which they should be) then chances are after an initial cost getting to an Open Source platform, the ongoing platform development will just become a part of doing business - without all the license costs, upgrade costs and my favourite "add-on module" costs. It's like the good old days when IBM sold you a mainframe, which down the track had a memory upgrade through an engineer flicking two dip switches, then writing out a bill. Those days are gone.
Neutrino Feb 16, 2010 1:01 PM	All: Please remember that the purchase decision by any large organisation has to consider a lot of things and value for money and standardisation are just part of the total equation (by value for money I mean whole of life value for money including decomissioning, disposal costs). In governments these requirements are mandated by regulation and legislation, in industry they are just good business sense. Please also remember all organisations covered by the privacy act(s) have a duty of care to protect the data they are custodians of. Yes, I can hear the howls about Microsoft products being the major targets of attack and that may be true now, but were everyone to move to a single open source platform where the source is already available watch how quickly it would be penetrated! We are actually better served, when all things are taken into account by having a mix of systems (including hardware architecture) not one homogenoues one and agreeing some standard data interchange formats that will allow on-the-fly or as needed transformation. We do not want a situation either where all governments in the world can see all of each others data without the person at the end of the chain giving permission. Yes there will be some cost penalties in some agencies but they have also got to protect years of data (in some agencies more than 100 years worth) and keep it accessible for daily use,research and preserve it for the future. While Open Source is suitable for some, the cost argument alone is not the answer, it has to be based on needs, cost vs benefit analysis, value for money,the risk assessment (all risks at all levels assessed for impact and probability at minimum), availability of support, skills exchange & development and for many organisations: will it help local developers, companies or our brother sister organisations and how will we exchange the data with the organisations we need to. The latter one has been helped dramatically by the Internet but there is some data that should ONLY go to certain places and we would be foolish indeed to think that everyone should have access to all data. This isn't an argument for censorship just support for privacy, none of us want our private data spread all over the world, especially things like medical records, I've had the experience and I don't recommend it to anyone. Suppliers of all kinds have tried for monopoly position since the history of humanity and the leopard in the IT Industry does indeed change its spots, not always for the better.
DJ Feb 16, 2010 4:59 PM	you started off with a good message, but your sentences all mesh together without punctuation and paragraphs, so I lost interest as it was too long and too boring.
tacky Mar 12, 2010 10:43 AM	MS sells Office licences to Government at a discount and the Australian public will pay MS back plus a lot more. This is how it work. A treasury and finance department issues a tender document and provides it as a .DOCX format. My firm uses MS Office 2003. However we could not view the document as Office 2003 does not recognise .DOCX format. We either has to pay MS $$ to get Office 200x (whatever) or download Open Office. It is fortunate the the Open Office group keeps up with what MS is doing. Imagine what choice the public has and how much they will be paying MS when dealing with Government if the Government only issues document in MS format and continues to upgrade their Office software?
Sams Mar 12, 2010 11:47 AM	Neutrino: "Yes, I can hear the howls about Microsoft products being the major targets of attack and that may be true now, but were everyone to move to a single open source platform where the source is already available watch how quickly it would be penetrated!" In the IT security world we have this thing called 'encryption' - it is entirely independent of the format of your document. So there goes your entire argument. OpenSSL is one of the best security packages available and is very widely used .. and is open source. Whenever you are using HTTPS, chances are high that it is implemented by OpenSSL. The myth that being open source or an open protocol/format makes things less secure has been utterly smashed many times. In fact, the reverse have proved to be true. In any case, how exactly does putting something in an MS Word doc make it secure - because I can easily extract the text with a simple command line tool (and frequently my apps do to index said docs).
Graeme Harrison (prof at-symbol post.harvard.edu) Mar 15, 2010 5:28 PM	I agree with Sams in noting that Neutrino's argument does not hold water. We ALL use the same protocols in accessing the internet, and the security is in the session-based encryption (SSL) which allows banking sessions etc. Productivity gains come from developing and sticking to standards (ASCII character-encoding and up). What Neutrino is arguing is a bit like when half of business was on EBCDIC encoding (IBM mainframes) and the other half was on ASCII. There was no greater security, just an inability to inter-connect. I think what the Australian and state governments have done in open source is woeful. They should all be shamed by having a list published each year showing the slow-moving elephants in our midst, so we know which departments are most recalcitrant... and worst in contributing to the $26b IT deficit. Ministers who care would then shake-up their departments, to get the intransigent old-timers to retire, in much the same way as the shift from IBM mainframes to servers required a change in IT management to happen. Rudd ought get involved at a policy level, as our international trading competitors are all shifting to open source. Smart public sector IT staff should already be planning the migration, because after all of this priming-the-pump for the GFC stimulus, the government will be looking for every possible savings while we repay the debt.
tallguy Mar 15, 2010 7:44 PM	It is true to say that there are a lot of complex factors to consider and a lot of costs involved in a wholesale switchover to any new set of technologies, either proprietry vendor change or switch to open source. The analysis would certainly be expensive as identified in the article. BUT - a well thought out information systems strategy that is deliberately biased towards open source could achieve a slow migration without the exorbitant costs. First step is to hit the "easy" targets - maybe Open Office (but don't forget initial user productivity loss costs). Then you mandate consideration of open source for all new systems (i.e. full justification of why not if non open source is chosen). You also need to mandate consideration of a switch to open source whenever an investment of more than $xx is required to upgrade or enhance an existing system. Upgrades to large ERP or database applications can cost a small fortune. Last and most important, you need an effective governance mechanism to constantly drive and enhance the strategy as it is implemented. This accountability must be centralised and cannot be left up to each department to decide. With the right will, within 7-10 years the government systems landscape could look very different!