Ditch Microsoft, Save £269m Says Hungarian Open Source Group

With governments across Europe including the UK looking to slash public spending to tackle budget deficits resulting from bank bail-outs and other effects of the recession, open source could be an important way to cut IT costs, according to free software advocates.

But with Microsoft and other IT vendors equally keen to maintain lucrative government contracts as the private sector continues to keep costs down, open source groups in countries such as Switzerland and Hungary are asking hard questions about why the software is not even being considered as an option for some public sector departments.

According to a statement on the EU Open Source Observatory and Repository for European public administrations (OSOR) – a site for information exchange about community developed software – five open source groups including the Hungarian Open Document Format Alliance (ODFA) are petitioning the Hungarian government to disclose how much it spends on proprietary software licences.

In an open letter to the Hungarian government’s procurement agency – Directorate General for Central Services (KSZF) – the ODFA states that last year the government spent around 9.5bn Hungarian forints (35 million Euros) on Microsoft software and has already spent 6.3m Euros on educational licenses and millions more on consultation and services from the software giant. “Please make your calculations known to the public which will prove that open source will not be a viable low cost alternative,” the letter states.

Like other economies in eastern Europe, Hungary has taken a battering during the financial crisis and was the first EU country to accept a loan from the International Monetary Fund in October, worth around £15.6 billion.

The UK government is similarly under pressure to improve its use of open source software. In September, open source users and vendors called for more teeth to the UK government’s open source strategy, saying that the policy is simply being ignored.”The UK has one of the best-written policies out there — the problem is policing it,” said Steve Shine, vice president of worldwide operations at Ingres. The problem is that large procurements simply ignore it, and this is not being picked up, he added.

In September, open source groups reacted angrily to the news that a Swiss government contract given to Microsoft without any public bidding. Vendors including Red Hat and other open source players called on a Swiss federal court to overturn a three-year contract issued to Microsoft by the Swiss Federal Bureau for Building and Logistics, to provide Windows desktops and applications, with support and maintenance, for 14 million Swiss Franc (£8 million) each year.

The Hungarian open source groups claim that by ditching the use of expensive proprietary software, the Hungarian public sector could cut its software costs by half over a three year period. “According to some EU countries’ experience there can be 40 to 50 percent cost savings achieved by moving to open source software in the third year after migration. This figure is also supported by some Hungarian case studies which we are sure the government is aware of,” the open letter states.

In particular, the open source groups are calling on the government to adopt the ODF open document format which would free the public sector from its reliance on Microsoft Office. The government could save around 300m Euros (£269m) over the four year lifetime of its software contracts with Microsoft by swichting to ODF. The ODFA in Hungary wrote an earlier letter to the KSZF in September protesting the department’s decision to renew an existing contract with Microsoft for Office applications.

For its part, the KSZF says it is surprised by the criticism from the open source groups as earlier this year it opened up its tendering process to include non-proprietary software companies. “We were very surprised to receive this open letter from the ODFA. Especially because centralised procurement just started a pilot project for the introduction of open-standards software,” the body stated. “Secondly, we contest the statement of the Hungarian ODFA that the currently used Office software is causing damage to the state. The use of Microsoft products over the last ten years through the centralised software procurement haven’t cost as much – not even close – as the ODFA claims.”

But according to the statement by the OSOR, the crux of the problem with the slow adoption of open source in Hungary is that the KSZF takes a two percent cut of every public sector procurement contract. “The groups say this motivates KSZF to sign expensive licence deals and to favour proprietary over open source software,” the OSOR stated.

In September, the Hungarian government did approve a scheme that allows open source companies to compete for a share of public sector contracts but admitted at the time that half the IT budget is still reserved for Microsoft. The Hungarian Government list previously only included proprietary products, naming Microsoft and Novell as the only choices with an allocated sum of 25 billion Hungarian Forint (HUF or 80 million Euros, £27.5 million) available for use each year.

“The signing of this contract is the fruit of years of hard work and lobbying, as finally open source solutions are included in centralised software tenders in Hungary”, Gábor Szentiványi, chief executive of ULX which is Hungary’s largest enterprise open source provider said at the time.