A bit more about the plans in Hungary (Score 1)

I would like to clear up some misunderstandings about this news regarding Hungary.

The news is not about spending about ~55 million USD on open source software.

It is about including open source software into the centralized public procurement list.

In Hungary all state / public departments have to follow strict public procurement procedures, to fight corruption and make sure that the taxes are spent on the best offer and not on the best lobbysts.

So if you want to buy 5 PCs with software and support for a small public office or a public school, you have to release a tender and wait for a few months until the offers come in... etc.

So, there is a fast-track method called the "centralized public procurement". In this case a central department releases a fairly large tender. The result of the tender is not the actual deal, but a framework contract with the winners and a "price list".

Any state financed organization is allowed to choose products from these price lists without the need for executing their own tenders. The main idea is, that this way even the smallest schools can get a reduced price as if they were ordering 1000s of PCs. However, they will still have to pay the costs from their own budget. So there is no "money infusion" here.

These tenders have a "framework sum" attached to them, which introduces an upper bound on the acquired products and services from the price list.

In theory, this sounds like a great system. Now back to the reality. Usually the prices on these central, reduced price lists are about 30% higher than on the market. The tenders are usually won by large corporations. Small companies usually don't have a chance, or only as subcontractors of the large ones. (Using a chain of subcontractors is usually not the recipe for cheap services, at least not in Hungary...:) )

So the news is about such a tender: the result will be a price list, that lists open source software and associated services. The framework sum will be ~55 million USD.

To get a larger picture: at the same time a very similar tender will be released for Microsoft and Novell software. The framework sum for this tender will also be ~55 million USD.

How does Novell get into the same tender with MS? Last year a similar tender was released, but exclusively for MS software: the tender included an explicit list ranging from Windows to mapping software. The framework sum was ~114 million USD.

There was quite a bit of an outrage about monopoly and corruption, so the government released another tender, but now for Novell software. (The framework sum was probably around ~22 million USD, but I am not sure.) So MS and Novell have already their own price lists.

There were many controversial contracts in the past, like exclusive Microsoft contracts in the public education ... etc. With these latest changes, I hope, that we will have a balanced scene, where the state departments can freely choose the best solutions for them, even with mixed setups, like running OpenOffice.org on Windows.

This new "open source" tender has not yet been released, so we will have to see, if this is just a new price list for e.g. RedHat and other "commercial open source" offerings, or an altogether different construct. There is some hope for the later, because in one interview Gabor Bodi (a state official responsible for the tender) said that they want to give the small local companies the chance.

We will see...

Best Regards,
Gergely

PS: Shameless plug: I started a blog series on this topic on my blog, however the entries are currently only accessible in Hungarian.