The Inquirer-Home

Microsoft megadeal gives indigestion

Analysis Open Source anarchy in the UK
Tue Mar 03 2009, 17:02

MICROSOFT HAS FAILED to agree new terms for its Government-wide UK megadeal more than a year since the last one expired. The Government has meanwhile announced a policy promoting Open Source software. But it is not just in the UK public sector that Microsoft is losing its grip on power.

Microsoft's Memorandum of Understanding to sell its software at mate-rates in the UK public sector expired last January after four years, at a time when authorities were again investigating the software giant's business practices.

Failing to agree new terms, the convicted monopolist and Government extended the agreement for six months. But negotiations dragged on. They were forced to agree another six month extension in June. And still the negotiations dragged on. Now another extension has expired.

Worrying for Microsoft, challenges to similar agreements have been reported all over Europe. The EC has been investigating a Microsoft licensing contract in Greece. MOUs have been challenged in Italy. Hungary's largest-ever software contract, a Euro100 million Microsoft deal, was challenged in court. The European Parliament even challenged the European Commission's own contract with Microsoft reseller, Fujitsu, to supply the software to Eurocrats.

Combined with the widespread adoption of Open Source by governments and city administrations all over the Continent, this weather front has a familiar air. While Europe is in the grip of revolution, some of Britain's colonial nobles are expecting to douse the flames as they lick across the moat.

It is notble that the Labour Government has snatched some of the Open Source initiative back from its rivals in the Conservative party, whose support of Open Source has long been rhetorically pleasing but short on substance.

Open Source is something of a neo-socialist movement after all, even if the Flossers (as the proponents of Free Love and Open Software are known) don't know it themselves.

The Government's Action Plan for Open Source and Open Standards last week made the tentative admission that people working together can "beat" corporations. Tom Watson MP, the UK government's digital minister, adopted the Open Source narrative that has endeared the model to Eurocrats: that, along with open standards, it encourages home-grown innovation.

This has been one of the Flosser's strongest stories: what government can predict its nation will have a prosperous part to play in a digital world dominated by Chinese and Indian economies when its own software industry is so dependent on the sale and support of boxed Usonian products?


Feed me, Seymour!

Such appeal is universal, as Obama found when he roused both protectionist Democrat and patriotic Republican hearts in his historic speech to both houses of Congress last Tuesday. America must go forth and compete, he told them. But the Open philosophy isn't nationalistic, it's internationalist.

For instance, the justification of One Laptop Per Child's computer for Africa in the days when it was an Open Source project: encourage poorer nations to adopt Open Source so they can weave their own innovations into the tapestry being formed by the global software co-operative; creating local knowledge enterprise and combatting an infantilising dependency on complex goods produced in the metaphoric Northern Hemisphere. The idea had already been proven by Ubuntu, the Open Source operating system born in South Africa and raised around the world.

From this perspective, just as the Open knowledge economy would subvert the old North-South divide, it would subvert the social and political mechanisms that made Microsoft great, because what Open does for technology, it does for business.

Rishab Gosh, in An Economic Basis for Open Standards, an EU-funded Maastricht University paper that has propelled Europe's Open Source movement since it was published in 2005, said Open standards instigate this subversion technologically by "separating the natural monopoly of the technology itself from any possible monopoly among suppliers of the technology". In other words, a technology may have a monopoly, but if it uses Open standards, no single supplier can build a fortress round the market and call it its own.

Economically, Open software introduces a further subversion by separating ownership of the technology from the suppliers. Thus Microsoft becomes less relevant; the extraordinary levels of income concentrated in its hands, superfluous; the secrecy justified by the rules of competition and power, unnecessary and even harmful to enterprise.


Establishment protectionism

The Government's Open Source policy commitment to bring "Clarity to procurement" stops short of ending this privacy of privilege, and of changing the culture of secrecy that builds around it in institutions such as the Office of Government Commerce, the government procurement sheriff that is negotiating the Microsoft deal. The OGC wouldn't even tell the INQ whether it had agreed a third extension, let alone why it had failed now a third time to renegotiate the deal. The terms of the agreements, under which millions of pounds of tax payers' money has been spent, also remain secret.

The UK's pledge of Open government may not have trickled down to the OGC's commercial relationships, but they have at last condensed into an Open Source policy. This policy may say what the OGC won't about its failure to agree new terms with Microsoft.

The justification for secrecy is ultimately the thing being concealed: price. That is, money as the end to justify competitive means; the winner having a right to the spoils, then to covet and corral them. If Microsoft revealed the price it agreed with government, it would expose the private commercial advantage the market has given it over public money.

And so it can be argued that the MOU restricts competition by entrenching the market privilege that makes the OGC amenable to a government-wide deal with Microsoft in the first place. The government gets a bad deal in the long run because its very MOU feeds its dependence on one powerful, price setting supplier, and an environment is set where a product may become secondary to the commercial objective of selling it. Thus quality is sacrificed on the alter of avarice. And might is proved right, for its time.

The digital Minister may have had something like this in mind when he declared in his policy forward that he even welcomed the challenge that Open Source has given intellectual property rights. That challenge is the question of how much any one property owner needs. If everyone shares knowledge and labour, at least according to his abilities, might he have a claim to just a share of the fruits, at least according to his needs?


Vanity is a warm lick

The Open philosophy does more than what Watson said rather weakly was "give leadership to new thinking about intellectual property rights". It exhumes the spirit of the Royal Society of Art's 18th Century premium system, "by fostering the spread of knowledge to the greatest number of people as possible", championing "the enlightenment values of openness, intellectual enquiry and social improvement" and mounting "opposition to all forms of trade monopoly and...secrecy".

And what was the justification of the RSA's then (and continued) aversion to lavish and elitist patent terms? That creativity and innovation come from shared knowledge; that privilege enshrined in patent or any other form of state-sanctioned monopoly suppresses innovation. This is an idea whose time has come.

The Open model was, declared Watson in a somewhat ahistorical understatement, "one of the most significant cultural developments...[of] the last two decades". Microsoft will have been aware of this when in 2006 it introduced its "co-opetitive" business model, having borrowed it from the visionary early 90s of Novell, a firm which built its business first on co-operative standards, then on Open standards, then on Open Source.

Co-opetition, where competing businesses selectively co-operate, was the conquistadorial corporate world's concession to the emerging networked society. It now sounds like a fudge. The idea was that within the nurturing shadow of Microsoft's plentiful bosom, independent IT firms would form dynamic, co-operative partnerships to build more innovative IT solutions on Microsoft platforms. But the sheer volume and complexity of the participants and their interrelationships in the networked world require Openness to work effectively.

And once the participants have tasted the Open model, they will realise that it is possible to fare better if they fly the neo-colonial nest. Though it may merely be a necessary and even helpful transitional model, and may yet take decades or much longer to mature, co-opetition might one day be seen as the swollen delusion of a model grown sick from gorging. It came to Microsoft's business community just when the Open model was beginning to flower in the muck.

Steve Ballmer, who as Microsoft CEO and the 43rd richest man in the world enjoys a $15 billion fortune fatter than the GDP of either Jamaica or the Democratic Republic of Congo, was like King Canute (or Cnut, as he was known in old English) when he introduced the Co-opetitive model to the Microsoft business world. And like the Viking King who stood before the ocean and ordered the tide to stop, he will have found that it won't. Legend has it that when Canute saw this and realised the vanity of mortal power, he flung his crown on a crucifix. Vanity, the humbled Canute might have said, is but an attempt to confute death. Vanity is vanity.

One might say the Labour government's Open Source policy is vanity as well, given that the country is becoming resigned to a Conservative win at the next general election; and given that it is billed as an "Action Plan" but is short on actions or people to perform them. It's proposal for procurement reform is yet vague, but perhaps fittingly so: rather than pretend to know the answers, it's ordered the OGC and CIO Council to go find them.

Back of a fag packet

The Flossers think the policy tantalisingly close to good. This must actually be a disappointment because Conservative interest in Open Source has for the last couple of years had them flapping excitedly like fags toadying for a school prefect's approval, only to find that Conservative Open Source policy is still on the drawing board.

How will their ideas be received by the headmaster and his Cabinet Office? Word is that Baroness Shriti Badera, parliamentary under-secretary of both the Cabinet Office and Department for Business, Enterprise & Regulatory Reform and long-time advisor of the Prime Minister, has been advised herself that those crackpot Flossers are actually on to something after all, which shows just how far they have to go before they are taken as seriously as they ought by government as well.

The Flossers have for too long made do with whatever scraps they can get. No Longer. The government's policy is not vanity, it is inevitable. Just as the Conservatives will inevitably introduce their own, long-promised Open Source policy, neither party can lay any claim to these ideas. An Open idea isn't owned, it lives an organic life. *The* Open idea has swelled to consume the traditional language of left and right with non-partisan theories proven by science and technology to be not only more efficient and innovative, but more inclusive and egalitarian.

Its progenitor can be traced in the traditional language of both: community and commune, enterprise and co-operative.

Its inspiration can be found in salubrious words that embody once revolutionary ideas: complex for anarchist, distributed for communist, networked for socialist.

Its embodiment is a very real phenomenon in which the rigid structures of hierarchical human society are being replaced with another system that may still by its nature be artificial, but is made through technology, nature's latest achievement, into a structure that more closely resembles organic life, nature's greatest achievement: collaborative, complex, adaptive, resilient.

It should be a world in which the inequality of all things is the basis of their equality, each being both gloriously unique and fortuitously combined. But the maker must endow these artificial systems with egalitarian principles because, as anyone not born into public school or some other meritocratic cradle will know, nature can be selfish when left to her own devices. µ



Share this:

blog comments powered by Disqus
Subscribe to INQ newsletters

Sign up for INQbot – a weekly roundup of the best from the INQ

INQ Poll

Happy new year!

What tech are you most looking forward to in 2015