Open source: the key to sustainable savings in public sector IT

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Things could hardly be tougher in the Whitehall front line. Last year Gordon Brown made it clear in his budget speech just what he expects – 4% annual growth in spending on front line services financed out of just 2% overall budget growth.

Enacting this latter day miracle of loaves and fishes is not going to be easy. But it will not happen at all unless Whitehall ends its chronic failure to use market power to deliver sustainable savings in the massive bill the public sector pays for software.

Nowhere else would departments or their agencies tolerate a monopoly or a monoculture. Imagine if every department decided, as policy, to buy its hardware from the same supplier. Of course innovation wouldn’t stop – improvements in manufacturing and the fundamental laws of physics would see to that. But the pace would slow – what’s the incentive if the buyer is locked in? – and the price would rocket.

And that is exactly where we are with software.

Whitehall needs to apply the lessons it has learnt everywhere else – not just that markets drive down cost and improve quality but that sustaining markets requires active fostering with regular deal flow and sufficient encouragement to the supplier community to keep stepping up to the wicket to compete for the work.

We do not expect proprietary software to disappear from the public sector. We don’t even expect, in the short to medium term at least, that there will be a massive shift away from current suppliers to a more heterogeneous world. But we do think that unless Whitehall acts to create a mixed market in software supply then long term savings will be impossible to deliver.

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We have seen the emergence of the new breed of ultra-portable Linux-based computers aimed squarely at the education sector and the inexorable build of Web 2 services such as Google Apps. They offer a real alternative to proprietary software

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The open source business model is a different one from the proprietary model that currently dominates. And we think those differences mean even a relatively small use of open source will drive big changes that benefit purchasers and ultimately the public.

The key insight of the open source model is that the software you use should be yours to control and customise. It’s not a new concept: the internet depends on open source to direct you to the site you want to see.

And the TCP/IP protocols that carry almost all network traffic – whether on the internet or not - have driven out proprietary alternatives not because of heavy handed marketing or the famous “fear, uncertainty and doubt” beloved of computer salesmen of old, but precisely because they are open and so strengthened by peer review.

That openness means that there is a common interest in driving improvements and innovation, making software more reliable, more robust and even simpler to use. And open source is big business: the Linux operating system, at the core of so many open source projects, might have been started in the bedroom of a Finnish student, but today it is at the heart of a multi-billion dollar industry that is revolutionising the way IT works.

We have already seen this in the private sector. Moving to new software solutions based on the open source business model is saving Specsavers, Europe's fastest growing opticians group, hundreds of thousands of pounds a year in licensing alone.