Open Source Software and the Public Sector

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2 > Open Source Software and the Public Sector This publication can be downloaded from: Published by: The National IT and Telecom Agency The National IT and Telecom Agency Holsteinsgade 63 DK-2100 Copenhagen Ø Denmark Tel: Fax:

3 > Open Source Software and the Public Sector The National IT and Telecom Agency January 2009

4 Contents > Preface 5 Introduction 7 The Danish Software Strategy 8 Open source in the public sector 9 No license costs 9 Open source code 9 Reusing software 10 Open source in the public sector today 11 Virk.dk portal integration 11 NemHandel open source to promote growth 12 Connected digital health in Denmark 13 Open source in the public sector why and how? 14 Open source promotes innovation 14 Open source where it ads value 14 Principles for application of open source 15 Initiatives to support the application of open source 16 Open source usage in foreign countries 17 The Swedish Rikspolisstyrelsen 17 Google 18 Private/public collaboration 18

5 Preface > Digitisation is an important element of ensuring the best conditions for growth in Denmark. If we utilise the potential in digitisation, we can create gains in effectiveness, generate more quality for the individual and promote innovation and profit performance. We must be aware of new potential in digitisation and focus on creating a favourable environment for development and innovation. There is great potential in the application of open source software. Applied properly, open source software can support further digital development, innovation and quality while strengthening competition. The Danish Software Strategy of 2003 determines the principles for application of software in the public sector. Open source software can contribute to coherence and continued digital development across the public sector. Application of open source software can simultaneously support further innovation and competition in the software market. Already, there are many great examples of Danish businesses that have successfully created a business through innovation in IT. The Danish public sector is also one of the best in the world when it comes to digitisation and digital services to citizens and businesses. We must take advantage of this. Open source software is not a technological wonder but a pragmatic tool that will create value for citizens, public and private sector when applied intelligently in the proper areas. Helge Sander Minister of Science, Technology and Innovation 5

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7 Introduction The Danish Software Strategy was released in June The strategy s main purpose is to ensure competition, quality and coherence in public IT-solutions with regard to the following principles: Maximum value for money irrespectively of the type of software Competition, independence and freedom of choice Interoperability and flexibility Development and innovation Since the release of the strategy, the software markets have developed rapidly. Especially in relation to open source software. The open source license and business model has matured and today a range of open source products are supported by a commercial and competitive market. Strategic application of open source software can create value, reduce costs and improve the control of the software portfolio. A range of different licenses to regulate software exists, but generally a distinction is made between closed source licenses and open source licenses. Usually, the former does not permit modification and distribution of the software, while the latter does. A prerequisite for modification and distribution is access to the source code hence the name open source. The open source business and license model is increasingly being employed all around the world. Gartner Group predicts that in % of all businesses will use open source software directly or indirectly. Several large internet companies use open source software in their business. Amazon, Yahoo, Google and Facebook as well as the web server market which is dominated by the open source web server Apache which holds a 50 % market share.

8 The Danish Software Strategy The Danish Software Strategy states that while IT-solutions must be interoperable across the Danish public sector, the choice of software is a strategic decision for the individual organisation. Strategic application of the open source license and business model supports that strategy. To promote the strategy, a number of open source initiatives have been launched. Among these initiatives are the development of a cost/value model and the funding of pilot programs. In 2006 the Ministry of Science established The Danish National Software Knowledge Centre. The centre was given the task of investigating how the open source license and business model could support the software strategy. Their findings form the basis for the principles presented in this document. In 2007, the Centre launched the website Softwareborsen.dk. ( The Software Exchange ). It is a venue for exchange and reuse of open source software in the public sector. Softwareborsen provides open source software to public authorities which can be downloaded and used by anyone. Presently, there are 45 open source projects on the website as well as a list of vendors that provide services to the presented software. Today, several businesses make a profit providing such services. The strategic application of open source software supports innovation and increases competition on the software market. It may also be used to drive digitisation. Public authorities must whenever possible have control over their own software. Open source is a pragmatic tool which should be applied where it creates value. Thus software must be chosen based on an assessment of a consolidated business case. Also, software vendors must be able to offer their services to the public sector on equal terms.

9 Open source in the public sector If public authorities choose to base their software portfolio partially or fully on open source software, a number of advantages can be derived: There is usually no license cost The source code is open and can be modified freely It is possible to reuse the software in another context or with another public authority. What is the difference between open source and open standards? Open source software is a type of software where everybody has access to the software's source code and can freely use, modify and distribute the software. Thus open source concerns the code the software is made of. Open standards denotes that the code responsible for communication with other systems is open and has technical specifications which are accessible free of charge. Thus open standards concerns the communication between software. No license costs Because open source licenses usually provide software free of charge, direct savings can be made on license cost. However, application of open source software is not completely cost free. Implementation, adaptation and running costs and maintenance of open source software add cost in the same way as closed source software does. Open source is not free of charge when you look at total cost of ownership. As with closed source, implementation, running costs and services add to total costs. If you have at your disposal the necessary competencies, you have complete access to modify and adapt open source software. Therefore, you do not need to buy these services from a software vendor. Conversely, you have more responsibility for the software yourself. Open source code By using open source software, you can take control of your own software. Because the source code is open and freely accessible, it is possible to modify the code yourself and develop the software further. This provides flexibility to users of open source software in the public sector with regards to being able to freely modify software to specific needs. Also, free access to the source code ensures that a larger number of software vendors can offer services in realtion to the software. The open source code of open source software increases public authorities' control over their own software. Besides being able to modify and improve the software, it allows a larger number of software vendors to offer services in relation to the software. This provides a broader choice of software vendors.

10 In other words, there can be more software vendors to choose from which prevents vendor lock-in. It means public authorities can choose which direction future software development should go. The fact that open source makes it possible for more software vendors to offer services also contributes to increase competition on the software market. It is important to note that if you choose to use software that is not widely or frequently used, the number of software vendors that can provide off-the-shelf services may be limited. Reusing software Open source software can be reused. It is permitted to distribute open source software and for others to use it. Thus, taxpayers can avoid paying for the same software development more than once. Open source is a type of license that allows inspection, use, modification and distribution of software. With these permits, public authorities can act as users of existing open source software or as a provider of software to other authorities or interested parties. The combination of source code access and reusability of open source software provides more options than just redistribution of software to another authority. It also makes it possible for other authorities to improve the source code and share the improved product with the original user of the software and with other public authorities. Therefore, it is possible for more people to improve the software and to finance future development. Collaboration is a prerequisite for a coherent digital administration with interoperable systems. The right to exchange software makes collaboration easier and facilitates decentralised control of software and flexibility. The liberty to modify software especially in strategic collaborations supports innovation. Partly because it makes possible adaptation of existing software and partly because of the increasing amount of off-the-shelf open source products that allow users and vendors to quickly combine software to new products and services. Because the open source model gives the right to redistribute software, the model can be used strategically to drive digitisation, e.g. to ensure that as many as possible digitise their business processes, a public authority can provide relevant software components under an open source lisence and thus drive digitisation faster.

11 Open source in the public sector today A lot of software in the public sector is open source. Also, a lot of software developed for public authorities is open source and the survey Open Source-kortlægningen 2008 conducted by the Danish National Software Knowledge Centre showed that the authorities are ready to act as providers of open source software. 96 % of the participating public authorities and institutions replied Yes to sharing of software. 111 governmental agencies, regional authorities, municipalities, universities and hospitals participated in the survey. Below are 3 different use cases for application of open source software in the public sector. Virk.dk portal integration Virk.dk is a public web portal for businesses. It was developed by the public authorities that regulate the business sector. The portal grants access to business reporting forms and services which the individual authorities are responsible for and maintain. With Virk.dk, businesses need only go to one website to make reports to public authorities because the reporting services are all integrated in the portal. The latest version of Virk.dk is based on multiple open source products and some closed source products. The portal is managed with an open source content management system and parts of the underlying database is also open source. Virk.dk uses the common public standard for user and identity management, which makes it much easier to manage users and identities across the many public authorities that integrate their portal services into Virk.dk. Because you have the right to redistribute your open source software, public authorities can easily make functional examples (reference implementations) available. The different authorities can use these examples when they want to integrate services into the web portal. The integration barriers are therefore lowered and integration is made easier because it is possible to redistribute the software. Because a large part of Virk.dk's platform is based on open source software, Virk.dk expects not only cost savings on licenses, but also a better economy in the development of the portal, greater flexibility in error correction and modification and therefore also a better control of their own systems. Virk.dk also adheres to the relevant open standards and the public integration model for portals (OIM). It is important to note that, since Virk.dk has chosen a content management system that is not widely used, the number of vendors that can modify the system immediately might be limited. In such cases software users will have adaptation expenses on consultants because they have the responsibility for the system and can make adaptations.

12 NemHandel open source to promote growth NemHandel makes it possible to exchange business documents such as einvoices via the internet easily and securely. NemHandel is part of an open infrastructure that is accessible to anybody businesses as well as public authorities and which is central to the digitisation of Denmark. It is crucial to digitisation that - just like the internet - it is an open infrastructure that is accessible to anyone and that no single vendor owns or controls. NemHandel was developed as open source and uses open standards. This means that it is possible for all commercial software vendors to include the NemHandel technology in their software products which several vendors have already done. All necessary software components can be downloaded from the software exchange, Softwarebørsen (softwareborsen.dk), free of charge, which lowers development costs for software developers and makes it possible for even the smallest software vendors to compete. NemHandel is the most frequently downloaded software component at Softwarebørsen. NemHandel is a good example of how the open source model can be used as a catalyst for digitisation: Because NemHandel was developed as open source and it is possible to redistribute the software, it is easy for commercial vendors to integrate NemHandel into their software products. This enhances competition because even small software vendors can compete and it widens the range of both simple and advanced NemHandel solutions, which is a boon for businesses that want to digitise their business processes.

13 Connected Digital Health in Denmark common infrastructure The Danish health sector has made considerable advances in building an interoperable infrastructure to exchange clinical data in Denmark. The purpose of the infrastructure is to make it possible for doctors, nurses and other treatment personnel to have access to the most current information about a patient s health condition no matter where the doctor and the patient is. In time, the infrastructure will connect many different clinical systems. The vendors that supplied the clinical systems vary in size and it can be a big challenge to adapt a system that used to be a stand-alone system to integrate with an infrastructure. To lower this barrier, a range of software components, which work on platforms such as Java and.net, has been developed and can be redistributed as open source. None of the old, existing infrastructure in the health sector is based on open source. The new platform, however, consists of a range of varying components and services, which are all distributed under an open source license. There are components for web communication, a service for user and identity management and many future planned services which will add clinical value and lower the entry barriers to the new common infrastructure even more. Today, almost all parties connected to the health sector s new common infrastructure use open source software. This means that errors are corrected more quickly and that software matures faster and becomes robust. It is also more manageable to have more than one vendor to a piece of software because the source code is open and is not controlled by a specific vendor. A very important effect is that small vendors can offer to support and maintain software. This increases competition and the potential for more software quality.

14 Open source in the public sector why and how Using open source supports the visions in the Danish Software Strategy Open source promotes innovation Innovation is not only about developing new ideas and technologies. Innovation is also about making people aware of existing knowledge and technology and using it in an innovative way. In other words, innovation is also about reuse, renewal, rethinking and developing new combinations not yet thought of. Similarly, it is important to remove the barriers for exchange, reuse and development of software in order to create growth for innovation in IT. This type of innovation is supported strongly by using open source software because the source code can be redistributed freely. It allows other developers the opportunity to study the software, to further develop the technology and to expand the collective knowledge of the technology. It compares to the world of science, where new groundbreaking advances are often achieved on the basis of other scientists primary research. Thus, the open source license and business model supports innovation and development. The model can strengthen Danish businesses and the public sector s continued ability to compete in a globalised world. Open source can also contribute to promoting the free movement of knowledge in society. It promotes a more effective market for knowledge and knowledge sharing, and it improves the potential for innovation in businesses and the public sector. Open source where it adds value The public sector must use software that supports interoperability across institutions and supports a software market where vendors can offer their products and services to the public sector irrespectively of the software type. The software type should be chosen based on what is best in a given situation, not on whether the software is open source or closed source. Open source software should be viewed as a pragmatic tool that should be used where it adds value. Regardless of license and business model, it is important that public authorities to a large extent have control over acquired software. This allows authorities to determine the conditions for application and development which help ensure quality and reduce the risk of vendor lock-in. Application of open source in the public sector is based on a number of principles. The principles ensure that public institutions have multiple options and support that overall software acquisitions are made cheaper and more flexible. The principles also ensure an innovative and competitive market.

15 Principles for application of open source Competition Efficient competition is a prerequisite for an effective and varied software market. Open source support that software can be maintained and developed by multiple vendors. Software vendors must be able to offer their services to the public sector on equal terms. Control and self-determination Application of open source software ensures control over the software. This allows the individual public authority to determine when and how the software should be updated, developed and if the software should be distributed. Development and innovation When developing software, public authorities must decide which software development model, such as the open source development and business model, best supports innovation and fast development of new products and services. A s a rule software developed in the public sector should be made available with an open source license. This does not mean that old methods should be deprecated, but rather that multiple approaches can be used simultaneously and new approaches can be tested so pros and cons can be identified with regard to the Danish administration. Maximum value for money irrespectively of the type of software The individual public authority must be able to acquire the best and cheapest software in the context of local administrative needs, whether that is closed or open source software. The software must be chosen based on a consolidated business case. Interoperability and flexibility Public authorities should focus on software that is constructed of smaller software components and which support communication with other software via open standards. This allows the various software components to be replaced independently which promotes flexibility, reusability and competition in the area. Reusing software Application of open source software can prevent taxpayers from having to pay for the development of the same software more than once.

16 Initiatives to support the application of open source A range of initiatives will be launched to support application of open source in the public sector, such as: Network creation and public software collaborations To promote reusability and cooperation in software development, user communities focusing on certain software components will be established. Experience from existing communities will also be collected. The purpose is to identify incentives and to lower the entry barriers that still exist regarding the reuse of software. Continuous charting of new tendencies in the software market The software market and the connected business models are in continuous development. Therefore, it is important that an effort is made to inform public authorities of the pitfalls and opportunities that new approaches and new business models offer. An example of such an effort could be a report on how to maintain a certain level of competition in a market where an increasing amount of software is provided as a service from the internet rather than as an application. Also, the Danish National Software Knowledge Centre will provide relevant tools, e.g. tools to formulate a business cases for open source software. Application of open source in the common public reference architecture An area of attention is how public reference architecture and infrastructure can use open source strategically. The Danish National IT and Telecom Agency will continuously incorporate open source in the work on the common public reference architecture, e.g. in records management systems. Cooperation with educational institutions Additional cooperation with educational institutions is a key factor in creating a large knowledge base on open source infrastructure in the public sector. This also entails a systematic approach to innovation and further development of open source software in collaboration with the private sector. Knowledge gathering and communication Overview of and transparency in the software market is needed. The Danish National IT and Telecom Agency website digitalisér.dk collects results from all softwarerelated activities. On the website, it is also possible to find information about similar or related software projects nationally and internationally, to the benefit of all public authorities. The task of gathering knowledge is managed primarily by the Danish National Software Knowledge Centre. Application of open source software is a means to promote the Danish Software Strategy and increase control of the public IT infrastructure. Open source is a pragmatic tool which should be applied where it creates value and supports the principles of openness, innovation, competition, reuse, self-determination and maximum value for money.

17 Open source usage in foreign countries Throughout the last decade, more and more public authorities in foreign countries have successfully implemented IT-solutions and platforms based on open source. One of the reasons for this shift to open source is that many software vendors use open source components in their products regardless of whether they are open or closed source vendors. E.g. today, most commercial application servers contain the open source web server Apache and some of the largest web applications in the world run on the so-called LAMP-stack which is open source. Another open source platform, based on Linux, JBOSS, MySQL database and JAVA, is the fastest growing application server platform today and is used many places in Europe such as France, at Rikspolisstyrelsen in Sweden, at Swedish Railroad(SJ) and internationally in places such as the US Department of Defense. According to Statistics Denmark, every other public authority in Denmark used some form of open source software in According to Study on the Economic impact of open source software on innovation and the competitiveness of the Information and Communication Technologies (ICT) sector in the EU, 2006, the open source model has become widely adopted and in some areas open source software has become dominant over closed source software. The Swedish Rikspolisstyrelsen In 2007, the Swedish public authority Rikspolisstyrelsen (National Police Board) decided that all future IT-systems should be created based on a mixed-source strategy. Mixed source is the application of both open source software and closed source software. The decision was made based on an analysis of the migration of Rikspolisstyrelsen s image database system. The analysis concluded that Total Cost of Ownership (TCO) of the old database system was DKK over a period of 3 years. TCO of the new open source based system was DKK Over a period of 3 years, this amounted to cost savings of DKK or 73 %. Based on this analysis, Rikspolisstyrelsen calculated that in 5 years, they could save DKK 140 million (approximately EUR 18.8 million) on reduced license costs and server hardware expenses alone. According to Rikspolisstyrelsen, these savings were large enough to buy 400 new police cars or hire 70 new IT-personnel. Besides the obvious cost savings, this case is interesting because it demonstrates that in order to achieve maximum value for money, you do not have to choose between open source and closed source. A combination of software types can be advantageous. It is also interesting that the cost savings were on IT infrastructure and not on desktop software.

18 Google Google also uses mixed source and because open source is vital to their business, they have a clear open source strategy. As part of their open-source strategy, Google has established the Open Source Programs Office, whose primary function is to maintain healthy relations with the open source community. Among other things, they release code created by Google and offer infrastructure on their website They also sponsor the Google Summer of Code programme, which supports open source projects financially and supports open source developers. According to Google, the all-important advantages is the flexibility of open source, that they have control over their own software portfolio and that they do not have to pay extra to get permission to modify their own software. It s all about flexibility for us. The terrific thing about open source software is that we don t have to ask anyone s permission before we make changes to our operating systems. We don t have to ask anyone s permission before we make changes to our databases. We don t have to pay any per client licence fees for these things. This is really important, not just from a cost savings point of view, but from a flexibility and speed point of view. Chris DiBona, Google Open Source Program Manager to CNET, News.com 13th December 2006 Private/public sector collaborations on open source More private/public sector collaborations on open source software development are gaining ground, e.g. the NASA collaboration with the US private sector company Tetra Tech Inc. In 2006, NASA had problems handling trouble tickets. NASA used the issue tracking system ARS Remedy, but this was not flexible enough to meet the demands set by NASA. Therefore, NASA chose the open source system OTRS, which the subcontractor Tetra Tech adapted to NASA s specific demands. Because the components were subject to an open source license, the components that were developed for NASA to the OTRS system were later made available to all users of the system.

19 < Open Source Software and the Public Sector Open source is dynamic and promotes innovation and competition. Open source software allows distribution and development of software on free terms. This allows IT-businesses to offer services in relation to software and to develop new IT-products. It also makes it easier for public authorities to collaborate on creating interoperable IT-systems. Open source is a pragmatic tool which should be applied where it creates value. When it comes to software, it is not a question of either open source or closed source software.

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