
“Right now, Microsoft can go into any government agency, shake them and see how much money falls out,” says Don Christie, president of the New Zealand Open Source Society, told Keallhauled.
To the outside observer, this seems a curious assertion, given last week’s collapse of talks between the State Services Commission and Microsoft, which had been trying to work out a new, three-year, pan-government software licensing deal.
Surely that gives competitors a huge opening?
Mr Christie says that, unfortunately (from his perspective), government agencies are unlikely to now explore Microsoft alternatives. They have just become too blinkered, and ignorance of open source alternatives has left them in a “stunningly weak” negotiating position.
“No government agency in the past 10 years gone to open tender for their desktop licensing,” says Mr Christie. “Managers and CIOs have failed in their duty of care to protect taxpayer money.”
Cripes. How did we get to this state of fear and loathing?
Every year since 2000, Microsoft has negotiated two huge software deals with the government.
One covers every school, the other - the All of Government Microsoft Agreement or “G2009” covers every other government agency, including state-owned enterprises.
Each is a three-year agreement.
Both were last negotiated in 2006. In each case the government reached “mutually binding agreements” that put Microsoft forward as its preferred software supplier with subsidised pricing for schools, and discount pricing for government agencies who chose to opt-in.
The education deal - by one estimate worth around $20 million - expires in December, and is currently being renegotiated by the Ministry of Education, which is in talks with Microsoft, and rivals including Apple.
The G2009 deal was due to be phased in between June and October.
The 'collapse'
But despite six months of talks, the State Services Commission (SSC) - which negotiated on behalf of the government - was unable to reach a new mutually binding agreement with Microsoft.
Neither side will comment on specific pricing, but insiders say Microsoft sought to raise its pricing, but was rebuffed.
Instead, Microsoft has supplied the government with a letter outlining the pricing it is willing to offer government agencies, which will now negotiate with Microsoft individually.
SSC spokeswoman Marian Mortensten told NBR: “Microsoft has agreed to provide recommended retail price certainty for agencies as a basis for their individual negotiations.
“The SSC will now provide support for agencies following the cessation of the negotiations.
“Presentations will be run to advise agencies of the outcome of the negotiations, ways agencies can maximum their investment and achieve value for money in their spend on Microsoft products during the coming years, and opportunities for gaining the best value for money from alternative sources.”
Microsoft New Zealand country manager Kevin Ackhurst says there was no “collapse” in negotiations, but rather that the two organisations reach an understanding which is, in many respects, very similar to the 2006 mutual, non-bind agreement.
Usually, the more software an organisation buys, the larger its volume discount, Mr Ackhurst says. But the 2009 letter offered to the SCC continues the 2006 principle that smaller government agencies get offered the same licensing deal as large agencies, saving them both money and negotiating effort.
Two differences, Mr Ackhurst says, are that during the 2009 to 2011 period, government agencies can take advantage of any Microsoft pricing specials at any time, whereas the 2006 pricing was frozen for the duration of that three-year agreement. Agencies now also have six months to decide whether to opt-in.
The clock starts now
In a reflection of the state of communication between the two agencies, the SCC says agencies could take advantage of any Microsoft deals they liked during 2006 and 2009, and that time pressure is on.
Ms Mortensen says that as each agencies’ agreement expires between now and October (various agencies opted into the 2006 agreement at different times), each will have to sign with Microsoft within 30 days to qualify for the cheap pricing promised in its letter.
The Open Source Society’s Mr Christie says the collapse of the broader G2009 negotiation should be seen as an opportunity for government agencies to explore open source software (which is typically free, and updated by its community of users, albeit often under the aegis of a corporate sponsor; for example, Oracle-owned Sun Microsystems and Google help to bankroll development of OpenOffice, a no-cost alternative to Microsoft Office. Many, like IBM and Novell with their support for Linux - an open source alternative to Windows - see opportunities for ongoing service revenue.)
He points to the British government, which has mandated that its departments explore open source software, and accelerate its uptake, to get better value for taxpayers. To a lesser extent, Brazil and France have similar programmes.
“All about ideology”
The arguments for and against open source software are well-worn.
Microsoft, and other commercial software companies, say sticker price is only one issue. The cost of switching systems and ongoing training will soon wipe out any advantage.
Microsoft New Zealand’s nation technology officer, Brett Roberts, who generally enjoys a lot of respect in the industry for his willingness to turn up, in person or online, and debate open source advocates, goes further.
On his personal blog, he recently took umbrage at a Slashdot post, in which a user sought advice about a plethora of open source alternatives:
“I could paraphrase the [Slashdot post] as ‘we in the IT department really hate Microsoft so we’re willing to waste inordinate amounts of time looking into non-viable – or even non-existent – solutions if it means we can remove all Microsoft technology from our environment. Sure the end result might be expensive, flaky, bleeding edge, difficult to support and perform badly (especially once we’ve left this company in search of the next science experiment) but it’s all about our ideology’.
“I’m sure the CEO and/or business owner would be rapt.”
Mr Christie - who pre-empts criticism of self-interest by admitting upfront that his company, Catalyst, makes its living as an open source consultancy - says that argument doesn’t wash.
“Google and Amazon run their whole infrastructure on open source software”, he says, and those are companies who are very focussed on both performance, and cost control (although, it should be added, both also enjoy the advantage of large teams of developers who build open system software in-house).
Mr Christie says open source alternatives are inherently better for an increasingly interconnect world of internet-based computing.
For its part, Microsoft has been making nascent moves to support open source, and has moved more toward open standards (although many roll their eyes when they receive a .docx file, created with the latest version of Microsoft Office, and can’t open it, the new file format actually reflects the company’s support for Open XML, the format also used by the open source OpenOffice).
Multinationals vs locals
Mr Christie says he’s “very suspicious” of the whole government-Microsoft negotiation process, and the agencies’ proclivity to spend most of their budget on IT solutions from multinationals like Microsoft, HP and IBM - although he does accept NBR’s argument that the likes of IBM are bankrolling a number of Linux and other open source initiatives. There’s room for corporate-driven open source initiatives and Kiwi companies - like his own - choosing best-of-breed open source alternatives to bring to the local market, allowing the local IT industry to build expertise.
Microsoft emphasises that none of its All of Government agreements have been binding or exclusive. Agencies are free to pursue negotiations with any other commercial or open source vendor.
For its part the Open Source Society has sent a letter to the Auditor General and Tony Ryall, the minister in charge of the State Services Commission, asking them to review the way, in its view, the “government in general effectively deals exclusively with Microsoft for certain technologies”.
Mr Ryall has yet to respond to the letter, sent on Tuesday.
Microsoft's ace in the hole
Beyond time pressure to opt into the new Microsoft deal, and alleged ignorance about open source alternatives, there's another reason some education and government agencies are reluctant to expand open source initiatives: the Public Records Act, the first elements of which come into force next year.
Recently, the University of Auckland told NBR that although it has Google Apps licensing for all staff and students (50,000 in all), it is keeping staff on Microsoft Office, Microsoft Exchange and other Microsoft products, the better to be in compliance with the Act's provisions to record all communication.
Others are following the same rationale.
Mr Christie maintains that a mix of open source products would be equally capable of being in compliance with the act.
Comments
Thoughts on article
Hi Chris,
Thanks for the article.
XML Standards Error
Just a note on the
that you state MS Office 2007 and OpenOffice.org both use. There are actually two different standards, each claiming "openness". It's important to distinguish these two standards, as opponents to Microsoft will say that it's trying to confuse the issue of what an open standard is, whereas (as I understand it) MS will represent that they're genuinely trying to make their file formats interoperable with other systems.
See these two links for more details:
http://en.wikipedia.org/wiki/OpenDocument
http://en.wikipedia.org/wiki/Office_Open_XML
Desktop Linux - Novell sure, but IBM?
If you write more on open source desktop operating systems, I recommend including Canonical, rather than IBM. Canonical has a much larger share of the Linux desktop space through Ubuntu, the largest distribution. IBM is a commercial vendor, and doesn't really do desktop Linux as far as I'm aware.
Records
I find it interesting that public sector agencies are retaining MS due to public records requirements. Big companies can fall down, as we've seen in the auto and financial industry. Software companies are not immune to collapse.
In theory, open source standards should beat proprietary ones over the long term - given that no one owns them and software can be developed by anyone to read them later on.
Thanks again Chris, I look forward to reading more about this story as it progresses.
- Tim
IBM/Linux
Thanks for your comments, Tim.
In regards to IBM:
IBM has a commercial alliance with RedHat, maker of the desktop and server versions of the RedHat Linux distribution.
Clarification on the Public Records Act
Hi Chris,
I could be wrong, but it was my understanding the MS products - e.g. MS Office + MS Sharepoint - are currently incapable of helping organisations comply with the Public Records Act without the addition of extremely expensive proprietary 3rd party add-ons.
It is my understanding that open source alternatives to that Microsoft stack, e.g. OpenOffice combined with Alfresco or various other combinations of open standards compliant applications are, if anything, better at delivering PRA compliance.
If that's the case, then your assertion about organsations sticking with Microsoft products due to PRA compliance concerns is quite misleading. Either that, or those organisations using that as a justification are misinformed.
Cheers,
Dave
Public Records Requirements
Yes it is interesting their thinking on this. Last year I was helping few government organisations to thin outside of the box on how they could utilise Open Source in compliance management.
For example:
OpenOffice+Zimbra (of other similar Open Source email/communication tools)+Alfresco Records Management can replace the proprietary compliance/records management solutions.
And of course there are more
Clarification on MS OOXML and ODF
A point of clarification - your article is a bit confusing regarding the two "standards" for documents. Only one is open - the ODF (Open Document Format). The other, OOXML is Microsoft's more recent failed attempt at an open standard to compete with ODF (note the stupidity of introducing a "competing open standard").
MS Office 2007 uses a *non-compliant* variant of OOXML for DOCX, XLSX, etc. That's mostly because MS haven't been able to build a compliant version yet (because the OOXML standard is fundamentally broken).
OpenOffice and perhaps 10 other applications (e.g. KOffice, Lotus Symphony, Gnumeric, StarOffice, Abiword, Google Docs, etc.) offer practical interoperability via the more mature ODF standard.
Microsoft, having abandoned attempts to implement OOXML, have instead tried to offer ODF compatibility with the latest MS Office 2007 service pack, but have done so poorly. As a result, practical interoperability between MS Office 2007 with OpenOffice and other ODF-supporting applications is broken. OpenOffice's developers, on the other hand, have built in file *read* support for MS's proprietary DOCX, XLSX, PPTX, etc. files into OpenOffice, but only by reverse engineering those formats, and not because they've had any cooperation from Microsoft, or have benefited from OOXML.
further to that...
It's worth pointing out that your confusion about "Open XML" vs. Open Document Format is not surprising. Microsoft have tried to undermine OpenOffice's inroads (some analysts believe that OpenOffice's marketshare is substantially greater than that of MS Office 2007) by a) initially refusing to support ODF and creating OOXML to muddy the waters. Note, to further muddy the waters, MS made the OO stand for "Office Open XML" which has been mistakenly written as "Open Office XML" by about 50% of the journalists writing about it (I think you can see the possibility for confusion). To further confuse things, ALL Microsoft employees refer to OOXML as "Open XML" in all PR materials, clearly hoping to make it appear that their standard is "open" - and or to corrupt the meaning of that word (so that the public is misled into associating it with Microsoft... sort of like the misused words "user friendly")
Microsoft always look for opportunities to corrupt language to make things confusing for the laypeople (i.e. business managers, not tech managers) who make purchasing decisions. It's about making sure that the playing field remains tilted in MS's favour.
Recent non-NZ govt uptake of Open Source
In the last copuple of weeks a pan-Asian Open Source initiative has been announced, and the Italian Dept of statistics has reported on its use of open Source tools. Many more such reports & announcements are not mentioned here, this is just a quick sample....
http://www.osor.eu/news/it-statistics-institute-moving-to-open-source-in...
http://www.oss.asia/
To quote the Italian Government's Statistics Insitute, in the above article:
"The open source operating system is now the default OS for servers and Istat now also requires to have at least one open source application for every type of project. "That is not because we are strong open source advocates, but because of the embarrassingly poor performance of proprietary alternatives."
Open Source only succeeds if it works, not on how well it is marketed, unlike commercial alternatives, where marketing budgets are into $millions per year, none of which benefits the users, but is paid for by them.
Why not?
Why wouldn't Microsoft try to protect income from existing customers? Should they just lie down and give in to these Open Source solutions because the narrow office technical community has an idealogical bent? I have a clear roadmap with a solid vendor with proven expertise in developing software, why would I let the open source community develop software for me when I can't guarentee either quality or a direction thats inline with my requirements?
@Rob If only there was a
@Rob
If only there was a roadmap for OpenOffice that you could find by googling for "openoffice" and "roadmap" ;)
Here, here! Rob
I recently looked for an Open Source CMS system and read numerous pages of users comments - wonderful, wonderful, wonderful, insecure, wonderful, wonderful, single admin, wonderful, wonderful, no longer being developed......
Those that liked the products could see nothing wrong with them so they were talking them up, those who had wasted how much time moved to something else looking for a solution.
I was looking for free software for a club, I suspect I will buy something so I don't invent a job for life for myself.
@Rob Of course they do
@Rob
1)
Of course Microsoft try to protect their revenue, as does any corporation, their constitution and shareholders demand it. Companies are psychopaths by definition. Ethics and morals have nothing to do with companies. It's people and communities that value those things. We need to recognise their need for greed and resist it. The closer to a monopoly we allow them to become, the more they can extract monopoly rents (ie excess prices, just as we've seen in G2009).
From your and my perspective, we are New Zealanders, seeking protect and enhance our local quality of life, and to make our Government more effective. Microsoft is a foreign corporation. Revenue to them is a balance of payments deficit for us. I care not a jot about their bottom line. Their monopolistic super-profits are actively used to subvert the open standards we enjoy working with.
2)
The open source community won't develop for you. It develops for it's own needs. If you have needs that are similar to others who have chosen to create open software, then you will find something useful. If you have common base requirements, like many organisations, you will find much on offer, a wide range of support, and lots of people willing to be paid to help make it work for you, and have fun doing it.
Only when an open source piece of software is really good does it become successful and widely adopted. When the price is free, why use a second-best piece of software.
If you have some variations in your requirements, a commercial vendor may, or may not, choose to accommodate your requirements. It's at their discretion, and their pricing. No amount of wailing from you can influence their decision, unless you are a dangerously large percentage of their revenue. I've experience a vendor saying no to mods for the last 20 years, and there is nothing I can do about.
On the other hand, if you have open source, I can guarantee you can have your diverse requirements met. It's only a matter of how much of your money it takes to implement them, and that only depends on how big a variation you want.
If you have way out requirements or directions, you won't find much open source to suit your needs. But then again, you won't find much commercial either, and you'll pay an awful lot for it, both up front and ongoing. You can choose to spend your fortune on foreign closed source, or local developers, it's your choice. One would hope if you're going to a lot of trouble to do way out stuff that you're generating significant added value from it's deliverables, like Weta Workshop for example.
So, I hope you'll re-evaluate open source suitability to your requirements by having your technical people do some proper research, your accountants some proper costings, your archivists some proper comparisons, your HR department do some proper seeking of skills, your actuaries do some proper risk analysis, and your senior management do some proper strategic thinking.
David.
vagueries
@Paul,
Vague, unsupported comments like that don't do much to help your anti-open source message. I think you'll find that more than a few people have had quite a different experience from yours...
I think you'll find that open source CMSs are eating the lunch of proprietary ones the world over (and in NZ Government of late) because they develop more quickly, are more flexible, and scale better.
The fact that you don't think you can handle an open source one doesn't mean that others can't. I think you'll find that you can get someone to implement an open source CMS for you at a much more reasonable cost (and better feature set) than buying a proprietary one.
In fact, nearly all the web development companies I know (including mine) have shifted to building sites on open source CMSs like Drupal, Plone, and Joomla... I think you'll find that the proprietary CMS is a dying beast. If you still feel differently... well, good luck with that.
Dave
@Rob Of course they do
@Rob
1)
Of course Microsoft try to protect their revenue, as does any corporation, their constitution and shareholders demand it. Companies are psychopaths by definition. Ethics and morals have nothing to do with companies. It's people and communities that value those things. We need to recognise their need for greed and resist it. The closer to a monopoly we allow them to become, the more they can extract monopoly rents (ie excess prices, just as we've seen in G2009).
From your and my perspective, we are New Zealanders, seeking protect and enhance our local quality of life, and to make our Government more effective. Microsoft is a foreign corporation. Revenue to them is a balance of payments deficit for us. I care not a jot about their bottom line. Their monopolistic super-profits are actively used to subvert the open standards we enjoy working with.
2)
The open source community won't develop for you. It develops for it's own needs. If you have needs that are similar to others who have chosen to create open software, then you will find something useful. If you have common base requirements, like many organisations, you will find much on offer, a wide range of support, and lots of people willing to be paid to help make it work for you, and have fun doing it.
Only when an open source piece of software is really good does it become successful and widely adopted. When the price is free, why use a second-best piece of software.
If you have some variations in your requirements, a commercial vendor may, or may not, choose to accommodate your requirements. It's at their discretion, and their pricing. No amount of wailing from you can influence their decision, unless you are a dangerously large percentage of their revenue. I've experience a vendor saying no to mods for the last 20 years, and there is nothing I can do about.
On the other hand, if you have open source, I can guarantee you can have your diverse requirements met. It's only a matter of how much of your money it takes to implement them, and that only depends on how big a variation you want.
If you have way out requirements or directions, you won't find much open source to suit your needs. But then again, you won't find much commercial either, and you'll pay an awful lot for it, both up front and ongoing. You can choose to spend your fortune on foreign closed source, or local developers, it's your choice. One would hope if you're going to a lot of trouble to do way out stuff that you're generating significant added value from it's deliverables, like Weta Workshop for example.
So, I hope you'll re-evaluate open source suitability to your requirements by having your technical people do some proper research, your accountants some proper costings, your archivists some proper comparisons, your HR department do some proper seeking of skills, your actuaries do some proper risk analysis, and your senior management do some proper strategic thinking.
David.
Public Records act compliance
With regard to the Public Records act compliance, it should be noted that OpenOffice and ODF are used as the de-facto standards by the Australian National archive.
http://www.computerworld.com.au/article/154297/national_archives_readies...
It would seem therefore that ODF (iso 26300) and software using that standard such as OpenOffice.org, would be more likely to be in compliance than MS-OOXML. It should be noted that there is no existing software that uses MS-OOXML, even MSO 2007 is non compliant.
Disclosure: I am the OpenOffice.org Marketing Contact for NZ
@Rob, Think about it
@Rob
1)
Of course Microsoft try to protect their revenue, as does any corporation, their constitution and shareholders demand it. Companies are psychopaths by definition. Ethics and morals have nothing to do with companies. It's people and communities that value those things. We need to recognise their need for greed and resist it. The closer to a monopoly we allow them to become, the more they can extract monopoly rents (ie excess prices, just as we've seen in G2009).
From your and my perspective, we are New Zealanders, seeking protect and enhance our local quality of life, and to make our Government more effective. Microsoft is a foreign corporation. Revenue to them is a balance of payments deficit for us. I care not a jot about their bottom line. Their monopolistic super-profits are actively used to subvert the open standards we enjoy working with.
2)
The open source community won't develop for you. It develops for it's own needs. If you have needs that are similar to others who have chosen to create open software, then you will find something useful. If you have common base requirements, like many organisations, you will find much on offer, a wide range of support, and lots of people willing to be paid to help make it work for you, and have fun doing it.
Only when an open source piece of software is really good does it become successful and widely adopted. When the price is free, why use a second-best piece of software.
If you have some variations in your requirements, a commercial vendor may, or may not, choose to accommodate your requirements. It's at their discretion, and their pricing. No amount of wailing from you can influence their decision, unless you are a dangerously large percentage of their revenue. I've experience a vendor saying no to mods for the last 20 years, and there is nothing I can do about.
On the other hand, if you have open source, I can guarantee you can have your diverse requirements met. It's only a matter of how much of your money it takes to implement them, and that only depends on how big a variation you want.
If you have way out requirements or directions, you won't find much open source to suit your needs. But then again, you won't find much commercial either, and you'll pay an awful lot for it, both up front and ongoing. You can choose to spend your fortune on foreign closed source, or local developers, it's your choice. One would hope if you're going to a lot of trouble to do way out stuff that you're generating significant added value from it's deliverables, like Weta Workshop for example.
So, I hope you'll re-evaluate open source suitability to your requirements by having your technical people do some proper research, your accountants some proper costings, your archivists some proper comparisons, your HR department do some proper seeking of skills, your actuaries do some proper risk analysis, and your senior management do some proper strategic thinking.
David.
In France
The Gendarmerie Nationale are moving from Microsoft to Ubuntu Linux.
It is being done in stages , but by 2015 , all of its 90,000 workstations will be using Ubuntu.
The Gendrmerie had about 15,000 licences annually up to 2004, and in 2005 it bought 27.
The estimated savings since 2004 is 50 million euros.
They had an accountant who knew about Linux , and when MS started forcing them to buy new software licences , he got annoyed .
MS just got to greedy for them and have lost another lucrative source of money.
To quote the head of the Gendarmerie " The two biggest differences are the icons and the games. Games are not our priority".
They also found that open source applications usually are better
at handling open standards than proprietary software.
If the French can manage the change to open source , surly New Zealand can.
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