Microsoft braced for Linux gains

Software giant Microsoft is facing serious growing threats to its monopoly in the UK public sector following admissions from local authorities that they plan to increase their adoption of open-source software.

The inroads against the world's largest software company emerge just as the UK government is set to promote open source to public bodies, championed by Linux, while the movement itself begins to mature.

In a survey of 100 local authorities for the Financial Times, over 60 per cent said they intended to step up their use of open source software, compared to just one per cent predicting a decline.

Cost reductions were cited as the key reason in favour of open source, meaning the switch to Linux is seen as an enabler to achieve efficiency savings spelled out by the Gershon Review.

Public sector managers also believe migrating to the open source movement – 42 per cent are planning to do so - will deliver the interoperability they need, while a lesser number cite the support and quality of the product.

Already converted managers meanwhile claim that Linux and its bedfellows are less vulnerable to virus attacks, while being able to retain similar functions as a Microsoft product.

Such users are driving the momentum behind open source software – at a growth rate of 35 per cent a year in the server market, set against 15 per cent for Windows, says IDG – with advocates saying they will increase using alternative systems in the future.

This translates into nearly 75 per cent of public sector managers vowing to beef-up their use of open source, just as two out of five not using are planning to switch.

"The open source market is beginning to come to some maturity which gives confidence to IT managers that they can start to rely on this technology," said Angela Waite, president of the Society of IT managers, which conducted the survey.

Microsoft has acknowledged the competitive threat open source products pose to its application, desktop and infrastructure business, with chief executive, Steve Ballmer, describing it as the most serious long-term challenge the company faces.

Executives have added regret over the initial portrayal of the Microsoft-Linux conflict, by admitting it was wrong to juxtapose the two products, only later to differentiate them by using emotive arguments.

Instead, the company has set about reinforcing the cost and value of the overall Microsoft package, pointing out that open source users might find end-costs and delivery of IT a disappointment, despite the 'free' status of the product.

In the personal computer market, Microsoft easily claims the lion's share but sales of Linux-based systems have grown markedly in the Asia Pacific region.

However, industry analyst Gartner has reported that up to 80% of Linux systems sold in some countries could end up running a pirated copy of Windows.

Meanwhile, in the web server market, Microsoft has never managed to make the gains seen by open source software Apache, which now claims more than half of the global market.

For some public bodies, managers and sector users, the dominant position of the company has been reason enough to adopt open source because they feel bullied by a lack of negotiating power and shortage of leverage.

Yet in the case of Bristol City Council, which considered both Microsoft and open source solutions when moving 5,000 plus workers from a proprietary desktop system running Microsoft Office, Corel WordPerfect and Lotus 1-2-3, the company granted a concession.

Microsoft pledged to cut their initial £2m quote by offering their Office package at a reduced £1.4m through a mixture of licensing procurement methods.

But Bristol refused to negotiate, and opted instead for Sun Microsystem's Star Office software at a purchase price of £186,000.

Conversely, the local authorities at Newham Council have said they stand by the decision to select Microsoft for the standardisation of their IT systems, citing savings in the region of 13.5 per cent.

A report to be published later this week will show that primary schools in England and Wales can halve their IT spend if they stop buying, operating and supporting Microsoft-based products by switching to open source.

The report, which is due for publication on May 13, will lend further support to the Office of Deputy Prime Minister's Open Source Initiative, which provides information on open source suppliers and offers a platform to collaborate on open source software projects.

10th May, 2005