Urip Hudiono, The Jakarta Post, Jakarta
If anything can be learned from the controversy surrounding a recent deal between the Indonesian government and U.S. software giant Microsoft on software for public use, it is perhaps the fact that this country is apparently still at a crossroads on how to develop its information technology (IT) sector.
Indonesia's some US$2 billion IT industry -- like many other sectors in the country -- still lacks a clear and visionary road map when other countries have already advanced in doing so.
And this, at a time when IT -- along with communications technology -- is poised to be the backbone of a future global ""knowledge-based"" economy.
The government is at best merely being pragmatic with the deal -- realizing the widespread use of pirated software products in government institutions -- and is therefore trying to correct this.
It is a decision that has, however, weathered criticism for likely giving Microsoft's proprietary software products an unfair advantage for use in publicly funded government services, and sidelining the use of free/libre and open-source software (FLOSS), which the government has actually been encouraging through its Indonesia Goes Open Source (IGOS) program.
The Communications and Information Ministry signed last November a memorandum of understanding (MoU) with Microsoft for the proper licensing of 35,496 Microsoft Windows OS products and 177,480 Microsoft Office productivity suites currently in use at government institutions.
The agreement, worth an estimated Rp 377 billion ($41.9 million), will also provide free upgrades for up to three years in the new software investment, and includes Microsoft's commitment to support the development of Indonesia's IT industry.
The U.S. software giant has addressed the alleged improprieties in the deal -- touting the government's own rationale -- in savings of up to $260 million if compared to regular software licensing, and how a reduced piracy rate through the deal can polish up Indonesia's investment climate.
""It's good for the country,"" Microsoft Indonesia president Tony Chen said in a recent interview with The Jakarta Post.
""The government can claim that piracy rate has declined and that there is legal certainty in the country, which can help attract more investment in the IT sector.""
The Business Software Alliance (BSA), an industry lobby group of proprietary software vendors with Microsoft as its main backer, ranks Indonesia's piracy rate at 87 percent and the world's third highest after Vietnam and Zimbabwe.
Citing a latest study from industry research firm International Data Corporation (IDC), Chen said Indonesia could benefit from a 10-point reduction in piracy rate in an ""increase of economic growth by three times, in government tax revenues by five times, and in job creation by 13 times"".
A BSA press release quoting the study mentioned Indonesia's IT industry growing to more than $4.2 billion by 2009, adding $3.3 billion to the country's economy and creating 3,000 new IT jobs -- while it increases local industry revenues by more than $1.5 billion and in turn generates an additional $152 million in tax revenues.
All this is particularly important for Indonesia, Chen said, as the country -- with 250 independent software vendors and an IT spending of 0.71 percent GDP -- is currently at the ""starting gate"" in developing its IT industry, with a potential to follow in the footsteps of India and China in becoming the world's major software maker of the future.
It will also help improve Indonesia's current personal computer (PC) penetration of 2.4 percent and Internet penetration of less than 10 percent of its 245 million population -- all of which are crucial in preparing the nation for the digital age.
""Other countries have moved on in reducing their piracy rates and improving their IT sector. It would be a loss for Indonesia if it lags behind similar efforts,"" Chen said.
Chen, however, did not mention the exact piracy rate reduction and benefits from the MoU, pending its actual implementation.
But the validity and accuracy of BSA's piracy ratings and studies have also come under criticism recently, from the respected business weekly The Economist, among others.
It is these concerns that has made I Made Wiryana, one of Indonesia's noted FLOSS advocates, advise the government not to take for granted that the deal with Microsoft will benefit development of the country's IT sector.
""The MoU is, for starters, a good step ahead to show we are serious in fighting software piracy. But then, to show whom, and based on whose piracy data?"" he told the Post.
""We also have to consider the actual benefits from the deal's implementation compared to the costs we will be making, when the use of open source software can also reduce piracy and save costs.""
Not wanting to go into too much of a debate on the benefits between proprietary and FLOSS, Made stressed the more important issues of the government, through its IT policies, ensuring transparency, continuity and security for its public services, as well as actual independence and benefit for Indonesia's IT development.
""The government should also consider in its IT procurement policies such issues as interoperability, not being locked-in to a particular supplier, and the preservation of public data.
""Any IT hardware system, for example, must be compatible with more than one operating system. Any software system must be open for audit down to the source code. Any data from the government for public use has to be in a standard open format, and not just a format that is widely used,"" he said.
""So this is not just a matter of open source or not, but how to perceive IT as an essential infrastructure in public administration.""
Born of the academic community of computer hackers prioritizing freedom, knowledge-sharing and open collaboration to make better software, FLOSS provides its source code to ensure the free use, copying, distributing and further development of software. It uses existing copyright principles to ensure these freedoms without restricting the software's commercial use.
This is in contrast to proprietary software, which does not disclose its source code, rigidly protecting it and the software's commercial use with copyright laws. Development of the software with third parties are usually done through strict non-disclosure agreements as well.
Chen said Microsoft had been working closely with other software vendors -- including the FLOSS community -- to ensure that its Office data formats, which are widely used, can be compatible with any IT system the government chooses.
Made further mentioned how the Microsoft licensing deal was questionable in its actual impact on IT industry development, as most of the investments would likely go toward user licenses, expertise certifications and software development components.
""Compare this: If the government still takes a gradual phasing in using open source to develop our IT sector,"" he said.
""The investments will be more for improving local IT professionals in providing technical support and developing software,"" he said.
""I think this will be much better in (terms of) contributing to Indonesia's economy, and actually making the country's human resources master IT development skills.""
Made mentioned the case of how the local FLOSS community managed to develop local-content distribution CDs of FLOSS within just three months, as all the source code and manuals were freely available, compared to a similar proprietary software that took three years.
Citing a recent study from the European Union (EU) of the economic impacts of using FLOSS, Made also mentioned how FLOSS had within the past eight years contributed to 1.2 billion euros in investment, 263 billion euros in annual revenues and 565,000 jobs to the continent's IT sector, mostly in the form small- and medium-sized enterprises (SMEs) IT developers.
As the MoU is non-binding, the government can still look into the matter and open a broad debate on it. If the MoU is certain can improve Indonesia's standing in the international community and boost the government's efforts in developing its IT sector, let's do it.
However, after wide debates, if it turns out that the MoU does not bring so much benefit and even inhibits our IT development, let's stop it and move the other direction and focus more on our IGOS program.
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