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Open Source Software – In digital administration (partly translation)

- translation of the chapters: contents, foreword, summary, recommendations of the working group and introduction.

CONTENTS

Foreword
Summary
Recommendations of the working group
Introduction
Open source software in digital administration
1.1. Open source software in digital administration
1.2. Digital administration in Denmark
1.3. Digital administration according to the Digital Taskforce
1.4. Digital administration in practice
1.5. The requirements of digital administration for information technology
1.6. Why is open source software of interest to the public sector?
1.7. Open source software in political focus
1.8. Conclusions
What is open source software?
2.1. Open source as practice and movement
2.3. User’s rights under open source licences
2.4. Distribution and payment
2.5. Open standards
2.6. Licences and copyright
2.7. Conclusions
Open source as desktop, infrastructure and specially developed software
3.1. Definitions
3.2. Software on the workstation
3.3. Infrastructure software
3.4. Specially developed software
3.5. Conclusions
Economic analyses of open source
4.1. Economic characteristics of software as a product on a market
4.2. Limitations of the analysis
4.3. The economic rights perspective
4.4. The economic development perspective
4.5. Options
4.6. Software costs in an options perspective
4.7. Upgrading in an options perspective
4.8. Licence ties
4.9. Economic model for an investment decision
4.10. Example of option
4.11. Conclusions
Economic analyses of the application of open source to desktop
5.1. The general economic model
5.2. A fictitious example
5.3. Århus County
5.4. Hanstholm Local Authority
5.5. AMU (Employment Training) Centre Copenhagen
5.7. Compatibility
5.8. Market development
5.9. Overall assessment of the examples
5.10. Conclusions
Economic analyses of open source as infrastructure software
6.1. Linux vs. UNIX
6.2. Case study: Consumer information
6.3. Conclusions
Open source and specially developed software
7.1. Standard systems
7.2. Older systems and ownership of source code
7.3. New development and ownership of source code
7.4. One system, several user institutions
7.5. Need for development in digital administration
7.6. The European Environment Agency
7.7. Three traditional scenarios for the development of new systems
7.8. A fourth scenario: Open source as a form of cooperation
7.9. Conclusions
The socio-economic consequences of open source software
8.1. Qualitative socio-economic assessments
8.2. Quantitative socio-economic assessments
8.3. Conclusions
Conclusions and recommendations
Annex
Glossary
Document exchange list MS Office/StarOffice
Overview of Microsoft licences
Age of PCs which can be used in latest version of Office suites
Application and development of open source software
Available reports on open source software

Foreword

The Board of Directors of the Danish Board of Technology decided in 2001 to have a more detailed analysis made of the usability of open source software in public administration, including the economic perspectives in a change-over to open source software.

This report presents the results of this work. It contains an economic analysis of open source software and additionally analyses the usability of open source software. The report also makes a number of recommendations on how the public sector can promote the use of open source software.

The report has been drawn up by an interdisciplinary working group under the Danish Board of Technology. A number of people who together have special knowledge in the area and the necessary economic expertise have been chosen as members of the working group.

The working group has consisted of:

· Jan Birk, Head of IT, Employment Training (AMU) Centre, Copenhagen
· Jens Hørlück, Associate Professor, Department of Economics, Århus University
· Niels Jørgensen, Associate Professor, Department of Computer Science, Roskilde University Centre
· Mogens Kühn Pedersen, Professor, Department of Informatics, Copenhagen Business School

The Board of Technology has made a secretarial office available for the working group.

The Board of Technology and the working group would like to thank everyone who has contributed to the project along the way and made data available: the Danish Commerce and Companies Agency, Microsoft, IBM and Mærsk IT. Special thanks are due to the public institutions which have provided the basis for the examples in the report: the Danish Consumer Information Centre, Århus County, Hanstholm Local Authority, the European Environment Agency and the AMU Centre Copenhagen.

We wish to thank Simon Gjedde, Ministry of the Environment, and Thomas Myrup Kristensen, Ministry of Science, Technology and Development, for their contributions to the discussions of the working group.

Responsibility for the contents of the report rests solely with the working group.

Danish Board of Technology, October 2002
Jan Opstrup Poulsen, project leader

Summary

The conclusions of the report and the recommendations of the working group are based on the analyses in Chapters 1-8, the results of which can be summarised as follows.

Chapter 1: Open source software in digital administration
The public sector needs to change over to communicating digitally. This development makes great demands both on the IT systems on which digital administration is based and on work processes in the public sector. From the economic point of view, the change-over poses great challenges, as huge investments will have to be made in IT in the public sector over the next few years. It is therefore natural, in connection with these investments, for detailed assessment to be made of what forms of information technology it is anticipated will be used, and who controls the development of ownership of this technology. The question is to what extent open source software can supplement or completely replace supplier-owned software.

Chapter 2: What is open source software?
The core of the concept of open source is the user’s access to the source code and right to alter and distribute the software, which is laid down in an open source licence. Open source is also linked to attitudes on knowledge sharing, freedom and open standards.

The right to distribute means that the open source software – but not if it is specially developed – can be obtained in return for the distribution costs, i.e. free or almost free of charge. Costs of adaptation, maintenance etc., which account for most of the total costs in connection with software, still have to be borne.

The right to make changes entails a right to choose supplier for maintenance tasks, and the use of open standards by the open source software provides greater freedom of choice with respect to the other software it is to be used in conjunction with.

Chapter 3: Open source as desktop, infrastructure and specially developed software
The prospects of increased application of open source software on the desktop are heavily affected by the dominant position of Microsoft’s closed file formats. The essential requirement to be met for increased application of open source on the desktop and for greater competition to be established in the area is that the public sector makes sure that word-processed documents are exchanged in an open file format.

The prospects for using open source software within the infrastructure software area are good, as the area is dominated by open standards and there are already high-quality established open source products. High priority should be given to the issue of security in choosing between different solutions in the area of infrastructure.

In public calls for tender for work relating to specially developed software, the public sector can demand that all or parts of the software are supplied as open source. Consideration can also be given to demanding less far-reaching rights, such as access to the source code and the right to modify it.

Chapter 4: Economic analyses of open source
The working group’s economic analysis of the potential in open source looks at software as an option, and the analysis is based on two perspectives, the short-term rights perspective and the more long-term development perspective. The short-term rights perspective focuses on who owns the software, and what economic consequences this has for the user. When there are comparable products, the rights perspective identifies clear economic advantages in procuring open source rather than supplier-owned software. The long-term development perspective identifies important factors in relation to the development and maintenance of the software, where the use of open source generally requires greater local skill. Providers of supplier-owned software gain revenue through licence ties and through frequent upgrades.

The costs of this can be reduced by using open source software.

The ordinary market conditions for standard software will lead in the direction of a very small number of suppliers or a monopoly. It will only be possible to achieve competition in such situations by taking political decisions which assist new market participants in entering the market.

Chapter 5: Economic analyses of the application of open source to desktop
The economic analysis of the application of open source to desktop software is based on the costs of Office suites. The analysis is made as a comparison between Microsoft Office and StarOffice/OpenOffice, and the software is assessed from both the rights and development perspectives.

In switching from Microsoft to StarOffice/OpenOffice direct savings can be made in licence payments and costs of replacing software (as StarOffice/OpenOffice makes different/lower demands on the hardware). On the other hand, there may be increased costs in building up expertise among the systems managers and in training end users. There are also problems with compatibility, particularly with layout and complicated spreadsheets.

Chapter 6: Economic analyses of open source as infrastructure software
The economic analysis of open source software as infrastructure software is based on foreign studies and a case study. The foreign studies show that open source software is cheaper than supplier-owned software for the selected areas of application. The same is true for the case study. The analysis shows that open source as infrastructure software entails substantially lower costs.

Chapter 7: Analysis of open source in specially developed software
Digital administration will necessitate major investment in specially developed software over the next few years. Ensuring sufficient competition afterwards, when the system has been developed, will be a problem for public purchasers. Ownership of the source code is essential for the later changes and adaptations, partly because the systems have to be put out to tender under the EU Directive. Many institutions need subject-specific systems, but do not want to be tied to a particular supplier. Supplier-owned systems entail a strong tie to a single supplier, and in reality this knocks out competition, so that the EU’s rules on tendering do not have any practical impact. User-owned systems are more expensive in actual development, but provide an opportunity for greater competition in continued development, and are therefore cheaper in the long run. An alternative for systems with several users is to develop the systems as open source and consequently bring about greater competition in the development of systems.

Chapter 8: The socio-economic consequences of open source software
There is significant socio-economic potential in the application of open source software. The report asks to what extent open source is a genuine alternative in digital administration. Economic estimates show that there is great economic scope for investments in both IT skills and pilot and development projects in choosing open source as an alternative to supplier-owned software under the prevailing economic market conditions in a number of software areas. Whatever choice is made, it will be necessary for decision-makers in the public sector to develop strategies for future IT investments involving open source software.

Recommendations of the working group

The working group recommends that the State and other authorities should jointly formulate principles and objectives for the procurement of software, partly on the basis of the following observations.

It is necessary for a number of decisions in relation to IT to be taken in a coordinated manner, where the State – with all the ministries and agencies, etc. – is capable of acting as a corporation and taking joint decisions on the basis of a multiannual planning horizon.

Joint decisions are necessary to introduce open standards, which is essential if greater competition is to be established, with the application of open source as one of the options. Central decisions are also necessary to provide economic support for pilot projects and to draw up framework agreements, draft contracts, etc., which can serve as tenders or alternatives for local decision-makers.

In the short term
·The State must not put all its eggs in one basket. It must be ensured for all types of software that each individual administrative unit has a real choice in a competitive market.

·Open source software must be judged on the same terms as supplier-owned software, and in calls for tender and other purchasing open source must be assessed on the basis of a realistic costing which takes account of all economic factors.

·Investment decisions can often be a mixture of open source and supplier-owned software. It is not an either–or decision, and the purchase of open source should not therefore be dictated as a general principle.

·An initial pilot project must be established in the near future in which open source software such as StarOffice/OpenOffice is implemented in a medium-sized public administration. The pilot project will be used to gather experience on the overall user-friendliness and quality of the systems, on the accomplishment of the change-over task, for example the training of users and IT staff, and on the extent and resolution of compatibility problems in connection with electronic exchange in Microsoft formats. This experience must be put at the disposal of all other administrations.

In assessing options, special priority must be given to the value of the open source code, including the long-term value inherent in supplier independence with respect to maintenance and it being possible for security to be subjected to independent reviews.

In the longer term
·Establishment, for example within one to one and a half years, of a larger follow-up project in which a number of administrative units use open source software, for example switching over to StarOffice/OpenOffice, and utilise previously gathered experience to reduce installation and adaptation costs.

·Preparation of a strategy for the introduction of an open standard for the exchange of word-processed documents.

The working group recommends that a standard document format is developed, firstly for problem-free exchange of documents and secondly for integration in systems used in digital administration. A strategy for the introduction of an open standard for the exchange of word-processed documents is important, because there is no genuine competition at present in the desktop area, largely due to the fact that Microsoft formats also represent de facto standards for electronic document exchange, and among these the doc format for word processing is the most important.

Introduction

Open source software (software with open source code) has become very popular in the last few years and is advancing at a speed unknown outside the world of IT. Just a few years ago, open source software was regarded as a slightly ‘nerdy’ rebellion against the giants of IT. Today it appears in television advertising in the company of the IT giants. In other words, open source software has become an area of business – an alternative, and therefore a competitor, to supplier-owned software.

This interest has also spread to the world of politics. Because open source software is now increasingly used for commercial purposes, because it is characterised by independence from software producers, because it is opposed to the creation of monopolies and because it is characterised by a ‘free-of-charge principle’, open source software has had a great impact on the political agenda, nationally and internationally.

This report does not judge whether open source software is better in general than supplier-owned software, or whether it is more morally sound. It analyses whether open source software is, or may become, a genuine alternative to supplier-owned software in public administration. The report also aims to take the discussion forward into the digital administration of the future and to look at open source software as a means of political strategy in developing this.

The working group has aimed to make a serious assessment of the advantages and drawbacks of using open source software, without excluding any of the options at the outset and without looking at open source software as an either–or problem. At the same time, the report identifies opportunities for putting open software to use in digital administration. Open source software opens new doors, and the report shows that the first step can be taken.

The report analyses open source software against the background of the working group’s internal discussions, an independently prepared economic analysis, various background reports, Danish case studies, the holding of a workshop and a long series of discussions with IT players.

Open source software exists in many versions. This report focuses on the prospects for applying open source software in public administration. The working party has therefore concentrated on the needs which exist within typical administrative units. This in turn has meant that the focus in the report is on office software (desktop) and operating systems (infrastructure). But as the working group has carried the discussion on open source software forward into the digital administration of the future, specially developed software has also been looked at.

The working group does not consider the report to be exhaustive in either discussion, analysis, field of study or conclusions. It has, on the other hand, been the working party’s endeavour to make a balanced assessment of the opportunities for using open source software in public administration and to contribute an objective economic analysis of the social consequences of changing over to open source software.

Last update: 03-06-2003

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