Microsoft vs. open source gets political

Microsoft is facing a growing battle against open-source software that is edging into politics on a global scale.

Just last week, the German government announced a deal to replace parts of its IT system with open-source programs, and Taiwan officials announced, as part of an effort to curb Microsoft's dominance in software, preliminary plans to promote the development of local Linux software.

Germany and Taiwan are only the latest countries to take sides in a software battle in which Microsoft and developers of commercial, or proprietary programs, are increasingly facing off with proponents of open-source software.

"We are seeing a lot of traction for Linux in the government sector, particularly in China," said Rajnish Arora, senior program manager of enterprise servers and workstations at market research company IDC in the Asia-Pacific. "There is also a lot of interest in Korea."

Most commercial software companies allow only their own programmers to make modifications to source code. Open-source software such as the Linux operating system is typically developed by programmers distributing source code modifications freely over the Internet.

Open-source software has been installed on a major portion of servers hosting Web sites and e-mail accounts around the world. The Apache Web server, for example, is used to run about 64 percent of active Web sites around the world, compared to about 27 percent for Microsoft's Web server software, according to Netcraft LLC.

Open-source software is however making slower inroads in the market for corporate, in-house servers and on desktop PCs, where Microsoft and other U.S. vendors reign, according to IDC and other market research companies.

The perceived benefits of open-source software have moved government officials in countries including Germany, France, Finland, the Philippines, South Korea, and China to try out the technology. A decision to replace Microsoft's Windows at least in part with open-source alternatives is often the result.

Officials within these countries have identified open source as a potential driver for cost savings. Some say security is enhanced by embracing open-source software. Others have said use of open-source software could stem software piracy, and lead to growth of local software alternatives.

Industry insiders agree that government use of open-source software and Linux in particular is proliferating.

"Once you leave the shores of the U.S. the question would be not if but where is Linux being used" in government, said Matthew Szulik, chief executive officer of Linux software maker Red Hat Inc. His company, in Raleigh, North Carolina, has been one of the beneficiaries of the Linux wave, as its version of the open-source operating system is used on more than half the Linux servers used today, according to IDC.

Though not all open-source software is free, for the most part it doesn't require customers to pay ongoing licensing fees or royalties, and typically costs less than software from the big commercial developers. By contrast, many users say that Microsoft's plans to move customers to an annual licensing scheme will drive software costs up.

In Norway, government representatives said they have looked into open-source software as a way to cut costs. "One thing is for sure: open source will be an issue," said Fred Arne Odegaard, assistant IT consultant with Norway's Department for Trade and Industry. "Contracts with Microsoft are getting more and more expensive."

The prospect of paying more for software has prompted changes in France, too. The country's head of IT systems at the Ministry of Culture, Bruno Mannoni, said the department has cut back on expenses since it began replacing 300 of its servers running Windows NT and Unix to open-source alternatives.

"It's working out to be a lot less expensive and a lot more reliable than what we used before," Mannoni said.

Price aside, government officials around the world are also looking for ways to increase use of local software and curb the export of IT funds to major U.S. companies. That is the case in a number of countries in the Asia-Pacific region.

In Thailand and the Philippines, for instance, government-funded computer research centers have created their own open-source software applications that they are distributing to government users and small businesses. By offering essentially free operating system software for servers and desktops, they expect to make computer technology more accessible and aid the local economy in their countries.

"If I'm a country and I would like to be a world class supplier of software, I can use open-source software to bootstrap my expertise," said Dan Kusnetzky, vice president of systems research with IDC, based in Framingham, Massachusetts. "I can hand my experts world class software, give them the source code, and say go to work.

"It in essence removes 10 to 15 years of the growth cycle of a software development industry," he said.

Taiwan is an example where government officials have announced intentions to pursue open source over major commercial applications in part to rein in Microsoft and preserve room for competition within the local software industry.

"Microsoft has been dominating the market here in Taiwan and we don't want this type of development to continue," said Tan-Sun Chen, a member of the Legislative Yuan and co-chairman of the Technology and Information Committee, in an interview with IDG News Service.

Motivated by the Fair Trade Commission's investigation of Microsoft's pricing practices in Taiwan, legislators are seeking ways to curtail Microsoft's dominance of the market, Chen said. One of the suggestions put forth during a June 3 meeting of legislators and officials would see the Taiwanese government allocate funding for the development of open-source software, including Linux, he said.

Software piracy has also played into the debate in countries where the use of illegal copies of software applications accounts for most of the software used by businesses and consumers.

"With open source (piracy) is not an issue at all," Kusnetzky said. "Under most of the recognized open-source software licenses it is perfectly acceptable to purchase a single copy of software and install it on any number of machines, or simply download it for free off the Internet."

Such behavior has become an international dilemma for commercial software vendors, according to the Business Software Alliance (BSA), a trade group which tracks software piracy rates around the world. BSA Statistics released Monday show that the commercial software industry lost nearly $11 billion to illegal software use in 2001.

In Perú, where software piracy rates are as high as 60 percent, members of Congress have proposed a bill that would require government agencies to use open source software whenever possible. One of the reasons given for the proposed legislation is to cut down on software piracy.

Security is another prime motivator behind the growing interest in Linux, government users say. Systems built on software from a single vendor are more vulnerable to attack than systems integrating software from different sources, some officials contend. When the German Federal Ministry of the Interior in Berlin last week announced a government deal with IBM Corp. to purchase hardware and software products that support Linux, the official who signed the deal said that the switch to open source would avoid a "mono" IT environment, which is more susceptible to attack.

Some commercial vendors like IBM have been able to take advantage and even fuel the interest in open-source software, particularly Linux. IBM, which invested US$1 billion in 2001 alone in open-source projects, mainly developing systems to run on Linux, boasts some 75 customers in various governments that are using products from IBM that run the Linux operating system.

The China Post Office, for instance, has struck a deal with IBM to run Linux at 1,200 branch offices. In addition, the China government works with Red Flag Software Co. Ltd., based in Beijing, to install Red Flag Linux on some government computers.

IBM has about 130 other potential government customers that are looking into using Linux, said Ralph Martino, vice president of strategy at IBM.

As governmental interest in open-source software increases, it has spurred Microsoft to strengthen ties to governments, and offer deals. The company was able to nip an incipient move to open source technology in Mexico, for example, by pledging funds for the country's e-Mexico project.

Microsoft officials in the U.S. declined to be interviewed for this story, but issued a statement saying that the company "is committed to helping governments develop strong, sustainable IT infrastructures that deliver ease of use, value through innovative technology, a clear road map for future development and access to source code to improve security and implementation."

Microsoft is no stranger to dealing with governments, since its dominance in the desktop software market has sparked inquiries and lawsuits. In the U.S., federal and state lawmakers have been investigating the company's business practices for more than 10 years. One result was a federal antitrust suit, which led to a 2000 ruling that Microsoft violated federal law by abusing monopoly power in the desktop operating system market to thwart competition.

Meanwhile, the E.U. executive body, the European Commission, is investigating Microsoft's business practices in the market for server software, and Taiwan's Fair Trade Commission has also launched inquires into Microsoft's business practices.

The issue of source code, too, has made its way into the legal arena. The nine U.S. states and the District of Columbia, which have declined to participate in a settlement with Microsoft in the federal antitrust suit, have asked that Microsoft hand over the source code to its Internet Explorer Web browser.

Though Microsoft has called such proposals drastic, there are signs that it sees some benefit to the concept of sharing code. Last year it launched a program it called the Shared Source Initiative. It allows customers in academia and the government to access the source code for Microsoft products to use for testing and reviewing application development.

Austria became the first government to take part in the initiative, gaining access to the code for Windows XP, according to a December 2001 statement from Microsoft.

Microsoft is also helped by the fact that on the desktop, there are few open-source productivity applications equipped to knock Microsoft products from their dominant perch.

Many of the latest switches taking place at the government level deal with software designed for high-powered servers. The one desktop software product with open-source roots that has shown some promise as an alternative to Microsoft's Office suite comes from Sun Microsystems Inc. Called StarOffice, the desktop productivity software competes with Microsoft Office. The free open-source version of the product is called OpenOffice.

"The challenge of course is that the software may not be as functional or as easy to use as the closed-source alternatives," said IDC's Kusnetzky. "If you look at the function by function comparison of Microsoft Office and Star Office, for instance, Microsoft Office does quite a bit more."

In Finland, where the government has been testing StarOffice and OpenOffice for use by some of its government agencies, early results reveal some incompatibilities for users trying to open Microsoft Office documents in the open-source alternative. "We recommended open source only for people who don't exchange documents with other people," said Arja Terho, a counsellor in Finland's Ministry of Finance.

Government plans to mandate or promote the use of open source also have a variety of critics, including some within the open-source community.

At least one local Linux developer in Taiwan believes that the government's efforts to boost Linux through government support may be misguided.

"Something should not be entitled to get financing from the government just because it's called Linux," said Sean Lee, sales and marketing director at Linux developer eRexi Ltd. in Taipei. Instead of blanket support for Linux, Lee said, the government should target specific needs in discrete areas of public administration.

In Perú, some local developers say the proposed "free software" bill would harm the country's own developers of commercial software. As the debate continues, the open-source technology at the center of the issue continues to gain steam. IBM continues to test and develop Linux systems, as have major vendors such as Hewlett-Packard Co., Intel Corp. and Sun. As a result, the once-enigmatic software movement might soon grow out of its mystique, according to Larry Augustin, chief executive office of VA Software Corp., which was founded as a Linux company before mounting losses forced it to exit the business.

"Linux is moving from being something specialized to being just another operating system on the list," he said. For the sake of computer users everywhere, he said, that's a good thing.

(IDG News Service correspondents John Blau in Düsseldorf, Germany, and Sumner Lemon in Taipei contributed to this report)

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