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PROMOTION OF INTELLECTUAL PROPERTY  THROUGH OPEN SOURCE:
CASE STUDY OF OFFICE SUITES

Y.V.S.T. SAI, IRS          
SISS, HYDERABAD          

In developing countries, the cost of a personal computer along with cost of an operating systems and necessary software is beyond the purchasing power of  normal individual.  At present, the cost of a normal branded computer is about Rs 45,000/-.  With essential software like Office Suite, the cost would be about Rs 60,000/-. As per statistics of NASSCOM, cost of a PC in India is equal to 24 months of average per capita income compared to 4 months of per capita income in China. Therefore, for most of the Indians, purchase of computer is a life time opportunity with the danger of the same getting obsolete in say 3 to 4 years.

Table 1 shows details of IT markets in India for the years 1998-99 and 2001-02.

TABLE 2:  IT MARKETS IN INDIA

 

2001-02

2000-01

1999-00

1998-99

Value
(Rs million)

Total
%

Value
(Rs million)

Total
%

Value
(Rs million)

Total
%

Value
(Rs million)

Total
%

Systems

92950

15

100580

18.4

62340

19

37060

15

Peripherals

27940

4

26360

4.8

20700

6

14310

6

Networking

22350

4

20230

3.7

12340

4

9130

4

Packaged software

19000

3

19440

3.6

16200

5

13350

6

Maintenance

18300

3

15780

2.9

11820

4

9400

4

Training

14670

2

23290

4.3

15610

5

11940

5

Domestic services

47670

8

39780

7.3

29470

9

22240

9

Others

0

0

1230

0.2

1540

0

14610

6

Exports*

378460

61

298960

54.8

160500

49

107520

45

Total

621340

1

545660

 

330520

 

239560

 

*Includes ITeS numbers also

Source: "The year of Survival", Dataquest, July 30, 2002

Table 2 provides details of desktops sold in Indian market in 2000-01 and 2001-02.

TABLE 2: THE DESKTOPS LINEUP

Desktops

2000-01 Units

2001-02 Units

Top 12 vendors total (HCL Insys, Compaq, IBM, HP, Zenith, Wipro, PCS, DELL, Vintron, Minocomp, Acer, Accel

752,572

700,656

Others and assembled*

1,129,681

1,309,426

Total

1,880,254

2,008,083

 * The assembled market has been readjusted
Source: PCs & DESKTOPS: Only Shaken, Not Stirred, Dataquest
URL: http://dqindia.ciol.commakesections.asp/02072914.asp, Section: 2002

Packaged software segment as already noticed in Table 1 is of the size of Rs 1900 Cr and revenues of major players are given below in Table 3 and all of them are MNCs only.

TABLE 3: REVENUES OF KEY PLAYERS IN PACKAGED SOFTWARE (in Rs Million)

Company

1999-2000

2000-01

2001-02

Microsoft

4500

6600

6650

Oracle

1950

2510

2500

SAP

1420

1820

1990

JD Edwards

150

210

Source: PACKAGED SOFTWARE: Keep it Simple, Keep it Quick, Dataquest
URL: http://dqindia.ciol.commakesections.asp/02072910.asp Section: 2002

The Indian Market is mainly a market of SMEs and SOHO.  The business sector accounts for 78 % of the purchases. With the computer industry following trying to outperform Moore's Law, up gradation is a constant necessity and up gradation costs could be about 30 % of the original software per year.         Prices of currently used essential software such as operating system, office suite (word processor, spreadsheet, database and presentation),  web design software and DTP software are given below in Table 4.

Table 4: Prices of essential software as on August, 2002

S.No

Description

Price (Rs)

1

WindowsXP Home edition OEM pack

 

 

4900

2

Windows XP Home Edition

 

 

6350

3

Windows XP Professional

 

 

8250

4

Microsoft  Office XP Standard

 

 

17500

5

Microsoft Office XP Professional

 

 

21000

6

Microsoft Frontpage 2000 full version

 

 

6500

7

Adobe Pagemaker 6.5

 

 

27000

8

Adobe Publishing Collection

 

 

49000

Prices from Cyber India Online Ltd www.ciolshop.com

Table 5 provides details of cost to install basic minimum software of say Windows XP Home Edition with Microsoft Office XP Standard for the Home PC segment and Windows XP Professional Edition along with Microsoft Office XP Professional for the Business and Government Segments on all PCs purchased for the year 2001-02 assuming that 80 % of the total PCs are purchased by Business and Government Segments.

TABLE 5: ESTIMATED COST OF OPERATING SYSTEM AND OFFICE SUITE FOR INDIAN PCs IN THE YEAR 2001-02

Segment

Package

No. of PCs

Cost in Rs Million

Home

Windows XP Home + Office XP Standard (Rs 23850)

401,617

9,578.6

Business/Government

Windows XP Professional + Office XP Professional
(Rs 29,250)

1,606,466

46,989.1

Total

2,008,083

56,567.7

Therefore, an annual market of about Rs 5600 Crores exists in India thinking that all new PCs would install basic software from Microsoft India. If one has to have additional software like business suites like Oracle/SAP or DTP software like Adobe, the prices would go still higher.           With these high costs and due to the strong presence of assemblers in the Indian market, software piracy is bound to continue. Organizations like BSA (Business Software Alliance), which is a consortium of MNC vendors, and corporations like Adobe have recently stepped up anti-piracy measures and raids are being conducted in large numbers in India to detect and catch software piracy. BSA reports loss on account of software piracy in India of about US $ 215 million, which works out to be about Rs . 10,105 Cr at an exchange rate of Rs 47 for 1 US $. Piracy rate is stated to be at about 61 %.            

The whole question is whether India should carry this stigma? And if it has to get rid of this stigma, is it necessary to pay Rs 10,000 Cr to foreign MNCs. In our opinion, there is no need to carry this stigma and there is no need to pay any cost for avoiding this stigma. The answer clearly lies in adopting Open Source Software. One can start using Linux operating system, which is fully backed by big corporations like Red Hat Inc instead of Windows OS. As against the Office Suite of Microsoft, there are at least three free ware utilities like Open Office, 602 Pro PC Suite and Easy Office, which work on par with Microsoft Office Suite for which you need not pay anything. A bare PC without any OS could be sold at Rs 15,000/- and by running the PC using Linux and Open Office or 602 Pro PC Suite or Easy Office, SME and Home segments could perform 100 % of their operations including business presentations without incurring expenditure of a single paise. Today, even free software is available to convert documents into Adobe PDF mode without paying a single paise and this author has been using such software for non-commercial use. Even LAN server software is available free of cost as open source package. One can even run a business with many computers using LAN server software, which is either free or available at nominal cost. Government can cut down its costs by about Rs 25,000 per PC, if it could simply adopt Linux/Open Office architecture. This would have double benefit by savings on costs as well as preventing out go of  foreign exchange of  about Rs 5000 Crore per annum  i.e about 15 % of value of software exports. Table 6 provides comparison of  Office suites.

           

TABLE 6: COMPARISON OF FEATURES OF  OFFICE SUITES

FEATURE

MS OFFICE SUITE

OPEN OFFICE

602 PRO PC SUITE

Word Processor and Spread Sheet

Available at Rs 21,000 per unit

Available for free

Available for free

Database

Available

Not Available

Not Available

Presentation

Available

Available

Not Available

Photo Album

Not Available

Not Available

Available

RAM requirement

Normal

High

Normal

OS supported

Normally Windows

Windows, Linux, Solaris

Windows

Compatibility with other suites

No

Yes

Yes

           
           

FEATURE

MS OFFICE SUITE

OPEN OFFICE

602 PRO PC SUITE

User friendliness

Excellent

Excellent

Excellent

Intuitive Interface

Not possible

Can Launch any application from another

Possible

Creation of TMP files

Yes

No

Yes

Auto Complete feature

Not Available

Completes several words without typing fully

Not Available

Saving format

Other formats not allowed

MS Word format allowed

MS Word format allowed

           

Open Source Software has gained prominence in the last few years as an intellectual response to the monopolistic tendencies of  giant corporations of the West. Though, it is an oft repeated cliché on the part of the Indian politicians and "software visionaries" that India is a knowledge economy, in practical terms original contributions of Indians working in India to open software are nil. Most of the Indian software developers, continue to derive happiness in using Packaged Software of giant corporations, however costly it could be. It is a fact that Indian software industry tries to derive its income in developing routine applications developed out of core software of US giants or through plain body shopping.   Open Source Software, developed and improved through colloboration of tens of thousands of volunteers (most of them working in corporate sector) is updated almost daily  and distributed under the GNU General Public License. This kind of license was developed by Richard Stallman of the Free Software Foundation and  guarantees four basic  freedoms to the user. They are:      

  • Freedom to run the program, for any purpose
  • Freedom to modify the program to suit one's needs because of access to the source code
  • Freedom to redistribute copies, either gratis or for a fee
  • Freedom to distribute modified versions of the program, so that the community can benefit from your improvements.

            Any one in  the world can join the Open Source Software movement and today thousands of  packages including Linux OS, Office Suites, Internet Servers like Apache (which has 30 % market share), web page design software, DTP software, e-mail servers etc are available under the Open GNU license. Wide distribution of the source code removes secrecy and no hacker would like to hack such software whose source code is freely available. For example, Microsoft OS and Internet Browsers are vulnerable to thousands of Viruses where as open software like Unix OS is prone only to attack from  about four  viruses.
            Open source has characteristics like quality, security, knowledge and recycling. Packaged software can only boast about quality and is lacking on all other counts. Software Darwinism ensures quality of the Open Source Software. Open source software does not contain "back door" traps like Microsoft Windows and IBM Lotus to collect information secretly from computer systems. For example, MS Windows is shipped with two holes (decryption keys), one for Microsoft to recover the system in crisis and another for NSA (National Security Agency) of USA to pry upon and secretly collect data from computer anywhere in the World using Windows OS, if they are connected to telecom network or Internet. This is as part of the agreement between US Government and software exporters.
       Government and NGOs should take advantage of the Open Source movement and project cost could be brought down drastically by adoption of following measures like:

  • Mass distribution of Open Source Software
  • Grant of Scholarships to study, develop and distribute Open Source Systems
  • Use of Open Source Software in offices and schools and
  • Recycling old computers by using Open Source Systems, which do not make huge demands on hardware resources

World over governments have recognized the importance of open source systems. For example, Government of Peru recently mandated that only Open Source Software must be used in Government Offices. European Commission is urging, European governments to opt for open source systems to cut down on e-government costs.
            In this regard, it may be stated that the approach of corporations like Microsoft are detrimental to the interests of consumers and not in accordance with established norms of protection of Intellectual Property. Linux, which is seen as a threat against Microsoft's core business, is banned from interoperating with  common Internet file system, otherwise known as Windows File and Printer Sharing of Microsoft.  The Microsoft license specifically excludes software under the General Public License, commonly known as the GPL. Microsoft patented its file sharing protocol systems and threatens developers who use the protocol to develop compatibility with other systems. As aptly put by Bruce Perens,  a leader, co-founder of the Open Source Initiative, the above example illustrates the dichotomy of software patents versus copyright. Copyright laws protect rights in the software created by the inventor. In contrast, patents create monopoly that allows the holder to prevent someone else from creating and distributing their own software. Therefore, the current trend is to patent software to prevent others to further develop on it or develop systems compatible with it using the underlying protocols, even if they are purchased by paying money. Unfair clauses are built into software licensing agreements to this extent by Packaged software manufacturers and most of the Indian customers are not even aware of what they are signing.

            India should not give cognisance to patents and licensing systems which prohibit development of compatibility with other systems, because the right of  software vendor ends where our mouse click starts. Once a consumer pays for the software, he can't be constrained in demanding freedom to develop compatibility with third party systems and share the same with others. Can one think of a situation where vendor of a machine prohibiting the buyer from opening up the system and develop compatibility with other systems. Can the vendor of a water pump prevent the buyer from designing a joint to connect the motor with a pipeline just because the pipeline is purchased from some other vendor. If necessary, Government has to make amendments to its Patent Act and Copyright Act to explicitly provide cognisance to the rights of the buyer of a software to develop apparatus to make it compatible with third party systems and also share the same freely with his friends.

Open source movement does not mean software just available free of cost.  It means liberty to choose. Open Source Movement is a tribute to the  fundamental right of liberty granted under the Indian Constitution and to uphold noble values enshrined in the Constitution, Indian Government should promote sharing of  Intellectual Property through adoption of Open Source. Knowledge is asset that  grows on sharing and if India wants to have more and more knowledge, there is no solution other than taking to Open Source Movement.
 
     
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