I can’t disagree with one of the comments in George Osborne’s statement on Improving IT procurement and encouraging open source software – namely the introduction of new standards that means that the “UK Government should never again have to sign an IT software contract worth over £100M” (well – I could disagree slightly – I think £100M is still far too high a figure). It’s almost as if he's read my recent blog on the NHS NPfIT project....
But I do disagree with his comments on Open Source software – I think they are a major mistake – and suggest that when in Government the Conservatives will continue the focus on upfront costs than longer-term value. One only has to look at the recent Socitm report to see that, in UK Local Government, only 12% of the £3.2bn spend is on software, whilst over 60% is spent on the costs of internal and external services – and I suspect that Central Government’s split of costs is even more biased towards staff and services costs.
I firmly agree with his comments on open IT procurement, but I believe it should be on a “level playing field” that recognises not just the upfront cost of the software, but also the ongoing support costs, including the training/support costs for the end users and how well the software meets the end user requirements. If one focuses on the overall value and quality of the proposed solutions - rather than just the upfront costs – then Open Source solutions can still win business - provided they can show that they are better than the proprietary software in more than just upfront cost.
The problem is that Open Source software is, by its very nature, starved of significant speculative investment to make it better than proprietary software. Why should developers invest money in software unless there is a return on that investment – the problem is that many such “returns” are hidden in the sale of their hardware and support services – hence the need to take all these costs into consideration – rather than just the upfront software costs.
Yes, we have historically allowed monopolies to grow and exist in the software market, be it from Microsoft, Oracle, SAP or many others, and we would be better off if such monopolies had not been allowed to grow (I prefer to think of them as ‘dominant suppliers’ as there is competition against all of them – it’s just that dominant suppliers have been better, both commercially and technically, to achieve their dominance). Love them or hate them, one has to accept that they have invested vast sums in developing their software, on the back of protected IPR, and without that the software world would be much weaker than it is currently.
The trick is to learn to live with these global giants (accepting that the UK Government software market is a significant, but still very small percentage of their overall business) rather than avoid them – cue OGC to get their act together better?
I am trying to get hold of a copy of Mark Thompson’s full report, and will update this blog if/when I get to read the full copy.