August 11, 2003

Open Source is good for the Philippine economy

- by Victor Serafica -

I really do not know why the article "IT investment and the economy" written by Wison Ng, (http://www.inq7.net/inf/2003/aug/08/text/inf_38-1 -p.htm) was worth posting at the most-read news site in the Philippines, since rather than being an article about IT and the Philippine economy, it is more of a broadside attack on open source. In this article, "While it may noted that any savings is always appreciated, any savings that will result in loss of competitiveness or in loss of opportunities should be frowned upon," in reference to the decisions of governments in adopting open source for their IT use.

It is rather full of fallacy, and tantamount to branding open source as not good for the Philippine economy. I haven't forgotten that these remarks are in line with what Microsoft said in a statement about government adoption of open source last year, a statement that Open Minds Philippines never forgot and is on guard against (http://www.inq7.net/inf/2002/sep/11/text/inf_5-1- p.htm)

All in all, the article is more about Fear, Uncertainty, and Doubt (FUD), rather than concrete suggestions on how the Philippines can chart its progress with information technology. Nowhere in the article does it prove that open source has been detrimental to the growth of the Philippine economy.

Of course, with Mr. Wilson Ng's company being the largest Microsoft reseller in Metro Cebu (the second largest Philippine urban center), his writing this kind of an article didn't catch me by surprise.

Now let's state the facts about why the Philippine economy is not moving fast through the use of IT:

1.The Philippine economy is basically dependent on entrepreneurs among the small and medium enterprises. They comprise 99% of the number of establishments. Their adoption of IT is slow due: a) to lack of understanding; b) costs; c) infrastructure; and d) security. (Digital Philippines survey of SMEs)

2.There are only 2 million PC users in the Philippines out of almost 80 million Filipinos.

3.The high costs of acquisition of IT products and services has led to a rise in software piracy rate in the Philippines, from 61% in 2001, to 63% in 2002, according to the Business Software Alliance (BSA). This can be attributed partly to increases in Microsoft software prices in relation to its Licencing version 6.0 and its Software Assurance program.

How can Philippine businesses compete globally when the costs of acquisition of IT tools are just high for too many of them? How are they able to use IT to conduct e-commerce and communicate efficiently with clients and suppliers, when tools for them are just not at the right price for them to adopt?

The Philippine government also has an obligation to deliver social services to the people by investing on infrastructure, improving collection, and also saving in areas where it can to address its budget problems. Software licensing cost is one area where the government can with open source tools. Savings can be devoted to improving conditions of governnment workers, and maybe to the military personnel to avoid future mutinies. Savings can be devoted to improving textbook-to-student ratio, which our educational system direly needs.

Stating that open source is non-commercial is a shortsighted conclusion when we have some of the largest IT companies in the world that have Philippine offices such as Sun, IBM, HP and others offering commercial software based on open source software. We already have a sprinkling of local companies generating profits out of open source such as QSR and Q-Linux. These local companies have also invested thousands of dollars in developing and deploying open source software and they are very much happy with it.

Open source is also starting to help in improving our education. The University of the Philippines system is leading the way, and UP Visayas in Cebu, where Mr. Ng conducts business, has made the first full switch to Linux and other open source products. If the country's premiere educational institution made the switch, then it means open source is ready for our future knowledge workers.

Isn't our primary wealth our people? And isn't investment in education a must to harness this wealth?

Even the mention of China and Japan as examples is ironic when these two countries are supporting the development and adoption of open source. China has its Red Flag Linux and the largest Japanese electronic companies have banded together to develop Linux embedded software for the products they produce. They are showing the way for open source adoption in Asia, with South Korea, Taiwan, and Thailand not being far behind. These countries are fiercely competitive, even if they use open source. We cannot discount the Philippines with its Bayanihan Linux.

Yes, the Indian companies are generating billions of dollars making software for many companies, but they are not pre-occupied with developing open source software? There is the Simputer project that aims to provide a low-cost Linux computer to impoverished Indians; many Indians are prominently active in open source projects and organized Indian Linux Users Groups (LUGs). There are e-governnance projects happening in Andhra Pradesh, Karnataka, Tamil Nadu, Kerala and Maharashtra with open source components. The world-famous Indian IT company, Wipro, even has its Wipro Embedded TCP/IP ported to the Linux kernel. At least they know that even with their billions, they keep their countrymen in mind by providing low cost computing solutions using open source. They are an IT superhouse that uses both open and closed source software.

Open Minds Philippines believes that open source software is a very much helpful tool in making ourselves competitive in the global economy. It helps any Juan and Maria afford to adopt IT without much worrying about costs and the threat of legal persecution due to the use of illegally copied software. It creates more opportunities for them with the information they grasp through the use of IT, as the computer hardware to run it need not be the latest, even if they use the latest world class, open source software. It allows any Filipino IT student to touch wonderfully written code and make improvements on it without any restriction, which in itself is a fulfilling educational experience.

Open source is an opportunity for widespread IT adoption by the Philippines.

It jumpstarts any Philippine IT company to compete globally since it does not have to reinvent the wheel as is predominant in a closed source scenario. No licensing, patent or intellectual property problems for them to worry about. Wrap around the renowned Philippine IT service support to any mature open source software, and any Philippine company can compete directly against any offshore company, anytime, anywhere.

Open source creates opportunities to do business without legal hassles that usually go with closed source software.

We are not here to debate neutrality or the preference of platforms, since everybody has the right of choice. However, pushing the open source option provides many opportunities for enhancing the competitiveness of businesses with no large costs; doing more with less; devoting savings to improving the lives of Filipinos; and not being beholden to any single company that dictates how they use their computers.

The facts are there. Open source is an advantage for the Philippine economy.

I leave it to Eric Raymond, the author of the "Cathedral and Bazaar," which became the guide for the global open source movement, to give the last words to Mr. Ng's article:

The analogy to steel is fallacious. Monopoly software doesn't make anyone but the monopolist rich -- because as soon as anyone starts making any real money, the monopolist uses its money and its control of the software to take over.

Microsoft has done this so thoroughly that in most of the software categories that used to exist, there is no one left. Name even *one* independent closed-source vendor of word processors for the PC. Or spreadsheets. Or communication programs.

If your country goes the closed-source route, increasingly the decisions about whether you keep access to your own data will be made by product managers in another country, using their control of the proprietary data formats you depend on. They will make those decisions not on the basis of what is best for you, but on the basis of what maintains their control.

Going the Microsoft route guarantees that your IT workers and software designers will become nothing but peons on a plantation run for the benefit of Microsoft shareholders -- permitted a subsistence living as long as they serve the masters, but with no autonomy and no prospect of ever getting land or independent wealth of their own.


Victor G. Serafica is a member of the convening group of Open Minds Philippines, the alliance of companies and organizations supporting the use of open source in the Philippines.

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