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Glyn Moody

Glyn Moody's look at all levels of the enterprise open source stack. The blog will look at the organisations that are embracing open source, old and new alike (start-ups welcome), and the communities of users and developers that have formed around them (or not, as the case may be).

Does Microsoft Office Lock-in Cost the UK Government £500 Million?

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In may last column, I wrote about Microsoft's efforts last year to derail any possible adoption of ODF. That's very telling, because in a way it's quite separate from the issue of open standards, and it shows that one of Microsoft's chief fears is losing the extremely lucrative office suite business. But just how lucrative is it? An email from Microsoft that is apparently circulating around the Treasury department sheds some interesting light on this. Here's what it says:

As a strong supporter of openness and inter-operability in software and systems, Microsoft feels there would be risks associated with a narrow definition of an open standard or a restrictive single standard mandate. Moreover, we believe that this would actually the increase costs of procuring IT right across the Government estate rather than reducing costs.

Microsoft a "strong supporter of openness"? Well, that's an interesting claim given that it has spent the last fifteen years spreading FUD about the horrors of openness. But maybe it's seen the light now, so let's look at the second part of the above. Notice that it moves from open standards to restrictive single standard mandate: as far as I am aware, nothing in the current open standards consultation talks about single standard mandates – it's another of Microsoft's straw men.

The email goes on:

The evidence we have for this is that a study by CEDI for the Danish Government showed that they could save up to £68.4m by moving to a flexible two standard rather than a single ODF Standard. For the UK Government, the cost would be far greater and is estimated to be up to £516.42m by moving to a flexible two standard rather than a single ODF Standard. This is more than the annual savings for the total ICT Strategy implementation plan between 2012 and 2015. Even the Govt is not certain that there proposals are going to save money – there were no savings identified in ICT strategy and no impact assessment carried out.

As far as I can tell, the CEDI research is something to do with this, which points to this Danish government page with links to two studies. They're all in Danish, not unreasonably, but even with the help of Google Translate I can't find any figures about the savings of "moving to a flexible two standard" as claimed by the Microsoft email. But I assume it is backed up somewhere, so let's take it, and the £500 million figure for the UK, on trust.

One of the interesting developments over the last few years is how the debate about TCO – Total Cost of Ownership – has died down. In the early years of this millennium, there were various studies, from both Microsoft and companies based around open source, that purported to show that their solution had a lower TCO than the rival's. Of course, much of this depended on the details, but it was striking that there was no clear winner in any of these comparisons. I think the reason that the TCO argument has disappeared today is simply that it wasn't possible to use it to decide between offerings because there wasn't any big difference between the two alternatives from that point of view.

What that means in practice is that the total cost of Microsoft-only or open source only solutions is broadly the same – the real differentiation comes in terms of other aspects, such as the companies offering support, ecosystems, freedom from lock-in etc.

So if the UK government could save £500 million by moving from an open-source only office suite provision to a mixed one, as Microsoft claims, then, broadly speaking, it could similarly save £500 million by moving from a Microsoft-only approach to the same mixed environment, if the calculation is carried out on a fair basis.

Microsoft's recent email implies that the current lock-in to Microsoft Office is costing the UK government something like half a billion pounds, give or take a few quid. Surely a powerful argument for moving to that two-standard solution based on Microsoft Office and ODF office suites as quickly as possible?

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