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Press Release

    Open Source Mandates Close Competition

    04/07/2006

    Open source mandates—laws that require all city and state government agencies to use open source software—are the latest fad in technology policy. Over 40 countries, ranging from France to Brazil, have enacted open source mandates. In the United States, Oregon, Texas, and New York City have also moved forward with such measures, each with varying degrees of success or failure. Last year, Massachusetts adopted a proposal that would mandate the use only software and formats that meet a standard of “openness.” State agencies have until Jan. 1, 2007 to make the migration to the new standard, but officials have already conceded that “the magnitude of the migration effort to this new open standard is considerable.”

    In general, “open source” refers to software whose underlying programming code is not proprietary, or owned; anybody can modify or adapt the code to his or her own needs. Open source software is also typically free, and anybody can distribute it. Linux, an operating system that competes with Microsoft Windows Server, is perhaps the most well-known of the open source products available in the market today. These programs and their software engineers usually earn their financial support through donations, advertising and consulting fees, or by selling the underlying hardware. For instance, Red Hat Linux sells their own, improved version of Linux, and also offers consulting services. Most of the large hardware vendors like IBM and HP also sell servers running open source software. So, while the origins of open source lie in a shared commons of code, there are very large economic interests that profit from open source software. Now, some of these concerns are attempting to use the good will created by open source to force mandates on state governments that directly benefit their business model. When these mandates give priority to open source solutions, they are clearly anti-competitive attempts to use the political process to capture market share.

    For quite some time now, proprietary software has ruled in the marketplace. Popular games, accounting software and spreadsheets are typically proprietary programs bought from computer stores for a price. However, recently, open source software has made significant inroads in the free market. The Mozilla Internet browser is one example of this phenomenon. After AOL bought out the Netscape browser, AOL released Netscape’s source code, or blueprint, to the public. The open source community turned it into Mozilla, which receives critical acclaim and now has ten percent of the browser market. The Linux operating system and the Open Office suite have experienced similar success in niches in the university, personal computing and corporate world.

    It’s bizarre, then, that open source advocates, who are catching up in the market with increasingly popular products, would resort to lobbying the government for business. Open source mandates would force state governments and municipal and city subsidiaries to purchase and use only open source software. Of course, open source advocates have every financial incentive to make their software more ubiquitous, but that battle should occur in the marketplace, not the political arena. Proponents often justify open source mandates on the alleged ‘superiority’ of their products; but if this is the case, it should be reflected in the market.

    Because the core elements of open source software are not sold, their lobbyists argue that it will be cheaper than proprietary software like Microsoft Windows. But in a study for the AEI-Brookings Joint Center for Regulatory Studies, Professor Alan MacCormack of the Harvard Business School finds that acquisition costs account for less than 10 percent of the total costs of software ownership. The upshot: comparing the upfront costs of proprietary software to the “free” price of open source software is a poor measure for evaluating software options.

    The other 90 percent of total IT costs comes from, but is not limited to, the overhead required to run a system, the expenses and learning curve associated with switching technologies, consulting fees required to operate and maintain the system, security and data management, and so forth.

    For some of these measurements, like security, open source solutions may indeed save municipal governments money. But for others, like the overhead that comes from consulting costs and the learning curve, proprietary software is probably a better option. Truth be told, whether open source is a viable and superior option for a municipality’s technological needs depends largely on … the municipality’s needs. Mandates that limit flexibility when acquiring software may hamper the ability of municipalities to meet such needs in the most cost-effective manner.

    This is why imposing a one-size-fits-all approach to state technology moves in the wrong direction. Imagine if Ford lobbied Georgia to require all city and municipal police and fire departments to use only Ford automobiles since they cost less. Not only would such a policy of vehicular micromanagement ignore the needs of each city, the public would rightly see it a naked attempt by Ford to boost its business at the taxpayers’ expense.

    To be sure, open source software, like Ford cars, is not without its virtues. If a city department decides that open source software is a more viable solution in a specific area, it should be free to choose and implement it. And, undoubtedly, some will. But that shouldn’t be the state government’s decision to make. And it shouldn’t be pushed by a politically driven software movement trying to legislate its way up the market.

    Open source proponents should continue to engineer quality software instead of lobbying state governments to play favorites. Eventually, through decentralized needs of each municipal department, the market will sort out the most appropriate IT policy, be it proprietary or open source software, or an even blend of the two models.