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Open source software can save India $2 bn

Leslie D`Monte  |  New Delhi 

As Indian consumers and enterprises evaluate the option of upgrading to Microsoft’s much-touted operating system (OS) Windows 7, to be officially launched on October 22, the free and open source software (FOSS) community has fired yet another salvo at proprietary software.

In the year 2010, if FOSS is adopted at 50 per cent levels across the economy, India can save around $2 billion (around Rs 9,800 crore), suggests a study conducted by the Indian Institute of Management-Bangalore. Even a very conservative estimate, notes the study, pegs the cost savings for use of FOSS on servers as an operating system or as an application at Rs 138 crore in 2010.

Moreover, anti-virus software sales in 2010 is likely to touch Rs 2,000 crore. This entire amount is a cost that can be avoided if FOSS products are adopted.

For instance, based on the projected sales of personal computers (desktops and notebooks), the study indicates that even if 50 per cent desktops are fitted with a FOSS operating system, the savings will be Rs 985 crore; if 70 per cent have FOSS, the savings will rise to around Rs 1,380 crore. The study, done with help from professors of the Indian Institute of Technology, Mumbai, covered 20 organisations that have adopted FOSS.

Examples of cost savings with FOSS abound in the Indian context, asserts Prof Rahul De of the IIM-Bangalore who conducted the study. For instance, the Life Corporation of India, which — with an IT infrastructure of 3,500 servers and 30,000 desktops — saved about Rs 42 crore by adopting FOSS.

Intangible benefits include ability to experiment with new technologies, says De. The IT@School project of Kerala replaced Windows software with FOSS on 50,000 desktops in schools across the state. Tangible benefits amounted to Rs 49 crore.

“The study indicates that FOSS is now mainstream, and being used successfully by commercial enterprises,” notes De. He maintains that the study was conducted independently, though it was sponsored by Red Hat — a commercial Linux vendor and competitor of Microsoft.

Pallavi Kathuria, director, server business group of Microsoft India, counters that the total cost of ownership (TCO) is lower for its software products.

“IDC in its study estimates that, on an average, 68 per cent of a three-year TCO consists of staffing and training costs, and another 15 per cent of TCO consists of expenses related to downtime. Acquisition costs for software turn out to be just a fraction of TCO, averaging only about 7 per cent of the total cost over three years,” explains Kathuria.

A study by Wipro Technologies, notes Kathuria, reveals “...that servers running Windows are 13-33 per cent less costly and require 29-56 per cent less IT labour to patch than similar systems running open source software”. According to internal research, she adds, “...almost 60 per cent of open source-related vendors are utilising traditional commercial licensing strategies to generate revenue from open source software”.

Prof De does not agree. He insists that “'s the initial acquisition cost that makes a difference”.

The IIM-B study has only highlighted the debate of open source software versus proprietary software. It was only late last month that 64 educational institutes across Maharashtra, including the Tata Institute of Social Sciences (TISS) and the Homi Bhabha Centre for Science Education, protested against the state government’s MoU with Microsoft India, wherein the software major will set up three IT academies and train government school teachers on ICTs.

“It is against basic pedagogical principles to hand over these basic educational processes of teacher professional development and curriculum design, to a private vendor (read Microsoft) whose core competency is in writing software products and whose main interest is in creating mass markets for its software products,” read the protest letter which was addressed to the Government of Maharashtra.

“If we take up IT literacy programmes, we can only teach software that we know. I do not see anything wrong in this,” counters Kathuri, adding: “We do not compete with open source but with commercial open source vendors,” insists Kathuria.

But the debate refuses to die.

It was only this July that IT majors like IBM, Sun Microsystems and Red Hat shot letters to industry bodies — Nasscom (for software) and MAIT (for hardware) — and the Department of Information Technology, protesting over the inclusion of clauses which allow for ‘multiple standards’ and ‘royalty on software’ versus a ‘single’ standard and ‘free’ software.

And there has never been a more intense global industry debate over ‘open standards’. On the one hand is Microsoft’s Office Open XML (OOXML) file format backed by Apple, Novell, Wipro, Infosys, TCS and Nasscom. On the other is the Open Document Format, supported by the likes of IBM, Sun Microsystems, Red Hat, Google, the Department of Information Technology, National Informatics Centre, CDAC, IIT-Mumbai and IIM-Ahmedabad.

States such as Delhi, Kerala and others from the North-East are heavy adopters of ODF file formats which are open and free (excluding maintenance and support).

India recently maintained its earlier stance of ‘No’ to the software major’s OOXML (but which has been accepted by the International Organisation for Standardisation as an international standard). ODF proponents oppose OOXML on the grounds that 'multiple standards' are not good, while Microsoft argues that OOXML — a recognised standard by ECMA International too — is a response to evolving formats in line with continual evolving systems.

The debate, conclude analysts, appears to be a proxy for product competition in the marketplace.

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First Published: Sat, September 12 2009. 00:18 IST