Anti-Competitive Software Tendering Practices Costing Millions

A leading Australian open source advocate is calling on the new federal government to set an example for its state counterparts and potentially save millions of dollars every year by opening up tenders currently locked up by Microsoft to full competition.

Longstanding IT service provider and Linux specialist Con Zymaris, CEO of Cybersource, has repeated calls he made last April for Australian state and federal agencies to reintroduce truly open and competitive tendering to their software acquisitions. Zymaris says the reluctance of Australian governments and education departments to open tenders for desktop software to true competition is costing taxpayers a small fortune as well as hurting local industry.

Tanner, who has described the IT overhaul as probably the most complex challenge he will face as a Minister, has said the reform program will focus on making procurement more efficient and encouraging federal agencies to work together more.

And he has foreshadowed two rounds of cuts: one directed at this year's budget and specific projects, and a second, later effort revolving around a broader and deeper review of all IT spending and procurement to be conducted in the second half of the year.

But Zymaris says he would also do well to face down IT procurement officers who "obviously see it as too hard to try to put competitive bidding into place with regard to a nontrivial realm of software acquisition and so between the state governments and federal government spend hundreds of millions of dollars every software refresh cycle buying Microsoft software without looking at alternatives".

"When it comes to open source tendering or what have you, what tends to happen in terms of the big-money sinks that go into software acquisition, they're not even going to market. It's kind of like the Commonwealth fleet buyers group going to market and saying 'We want a car, but we will only look at Toyota cars'," Zymaris says.

"When it comes to desktop software these people have no idea that a world exists beyond Microsoft, Microsoft, Microsoft. And that's the state that Microsoft's selling face, and the governments' buying face are happy to live in — they're not really interested in looking at something that creates a competitive environment."

He said the last time he checked the Victorian and Queensland governments were spending around $80 million, and the New South Wales government close to $100 million every refresh cycle, not including the money spent by state education departments.

"For example, Victoria every three or four years, they fork out 24 or $25 million to Microsoft to use Microsoft software, without ever going to market. They don't ever go off and say who else can supply us with this software that we automatically just go and buy from Microsoft every time."

A spokesman for Lindsay Tanner says at this stage the government has no commitment either way, but is determined to thoroughly examine the issue.

"The government is committed to having a thorough examination of the whole of the IT procurement practices," he said.

Zymaris is urging the new government to follow the lead of countries in Europe like Holland, Germany, and sections of France, Switzerland, Denmark and Sweden which seem determined to introduce real competition into desktop software purchasing.

Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.

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