Stimulate the Economy in Scotland by Using Open Source Software

In February last year, Tom Watson, the UKprocuring conventional software.
Government Minister for Digital Engagement, said:Additionally and importantly, they also have assumed
"Open Source has been one of the most significantcontrol of the destiny of their IT asset. In the world
cultural developments in IT and beyond over the lastof proprietary licensed software, it is not unusual to
two decades: it has shown that individuals, workinghave expensive, time-consuming and disruptive
together over the Internet, can create products thatupgrades forced on customers. As they say in the
rival and sometimes beat those of gianttrade, "it's a nice little earner". There is no such
corporations."pressure on Open Source software. The decision to
Open Source software (OSS) is standards basedupgrade has moved from the vendor to the
software that is free to acquire and free to modify.customer. As long as the customer is happy with the
OSS runs the mission critical servers for globalsoftware and can procure services to support it,
organisations like Google and IBM and is generallythen there is no reason to upgrade and no pressure
acknowledged to be less error-strewn and morethat vendors can exert.
secure than conventional proprietary software.The Scottish economy benefits in precisely the way
Traditionally OSS occupied the uber-geek territoriesthat Simon Phipps' Brazilian minister describes. The
of operating system (Linux) and infrastructureninety five cents that stayed in Scotland pays the
(Apache Web server) but is increasingly available forsalaries of Scottish Software Engineers and
line-of-business applications such as EnterpriseArchitects and lays down the foundation of a
Resource Planning (ERP) and Customer Relationshiprenewed and re-invigorated software sector that
Management (CRM).provides high quality jobs for the kind of smart,
In the last few months there have been contrastingknowledge workers that form the backbone of any
tales-of-the tape in government-funded IT spendingadvanced economy.
in Scotland. Tales that may have lessons for both theThese jobs are important. Over the last ten years
private and public sector.years the indigenous Scottish software industry has
Last month the bid winners for a Scottishchanged greatly. Outsourcing, typically to India, was
Government-funded department's Invitation tothe first wave and it meant the end of many fine
Tender were announced. It was a typicallycompanies, employing highly skilled graduates.
conventional scenario, one of has been repeatedFollowing hard on outsourcing's tail was acquisition.
countless times over the last two decades. TheComputing in Scotland has been reduced to the
contract total was in excess of five million pounds"branch economy" prevalent in so many other
and included in the winners were a number ofsectors of the Scottish economy as one after
Scottish IT companies offering to implementanother of our IT companies have been picked off
software written by American companies.by overseas competitors. So now we not only
On the surface, Scottish companies winning Scottishexport the licenses revenue, we also export the
tenders is a "good thing". But in reality they are theservices profits too.
proxies for a sizeable shift of revenue from ScotlandAs Open Source gets a toe-hold into government
to the USA through the mechanism of softwareprocurement contracts, an indigenous, dynamic,
licenses. Commission of between five and ten percreative and highly skilled software sector is
cent is earned by companies that sell licenses onre-emerging. One that is able to invest profits into
behalf of American software companies like MicrosoftScottish software jobs and not into fuel for the Lear
and Oracle, the rest goes back to America.jets required to transport the heads of the globally
The common justification made by the ultimatescaled North American software industry to their
beneficiaries is that for every dollar spent onvarious dominions.
software licenses, seven dollars is spent on services.The challenge for this emerging Scottish IT sector is
This in reality is a fallacy. Frequently, so much of theto professionalise their services and to engineer a
purchasers' budget is spent on licenses, that little isnew kind of company based on knowledge and
left over for the critical customisation,service excellence, that makes money from
implementation, training and support activities thatsomething that is free. There are already models for
determine the success of any IT project.this: Red Hat is an Open Source company. Founded in
Simon Phipps, Chief Open Source Officer at Sun1993, Red Hat has its corporate headquarters in
Microsystems, relates a conversation that he hadRaleigh, North Carolina with satellite offices worldwide.
with a Brazilian Government minister who said thatRed Hat provides Linux operating-system platforms
the reason that Brazil spends heavily on Open Sourcealong with applications, and management products, as
software is that "95 cents of every dollar spent inwell as support, training, and consulting services. Red
Brazil on proprietary software goes to North America.Hat's turnover is in excess of $600m and is
95 cents of every dollar spent on Open Sourceexperiencing double digit growth.
software - stays in Brazil."The challenge for Scottish government and the
By contrast, a sizeable Scottish Government-fundedprivate sector is to look beyond the corporate box
organisation recently opted to implement an Openhospitality of the proprietary software vendors and
Source Content Management System (CMS) and anto engage with this emerging sector. They are the
Open Source Customer Relation Management (CRM)ultimate beneficiaries. Free also means freedom.
application, and to do the software customisations toFreedom to choose how to use their software,
get the two applications exchanging key information.freedom to choose when and if to upgrade, freedom
The commissioning organisation is in receipt ofto choose suppliers and freedom to innovate by
software applications that are world-class and usedmodifying software to meet the needs of their
by organisations as diverse and demanding as NASAbusiness.
and the World Bank. They have been able to procureThe message is clear and is becoming clearer as
excellent software, have it specifically modified forbudgets are tightened. If you want your IT dollar to
purpose and invested in training and support. Thego further, convert it into pounds and spend it in
cost for doing this was less than the cost of theScotland, on Open Source software.
licenses alone had they gone down the route of