Level the Software Playing Field in NZ

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The short version: if you agree with the following statements...

Having committed to software that uses proprietary standards by default, the NZ government effectively mandates that the private sector and public purchase the products of a small number of overseas suppliers in order to interact with the government. This is unacceptable.

Software suppliers to the NZ government currently compete to set proprietary standards. They should be required to compete to supply software solutions which implement relevant open standards. Their solutions can then be vetted objectively for compliance against those open standards.

Mandating open standards will remove supplier monopolies built around proprietary standards. This will increase competition, reducing costs to government services, and lowering barriers to access, compliance, and participation by the private sector and the public.

NZ will be a freer, more equitable, and more prosperous country when the playing field for software procurement is level.

please

If you're not convinced, please read on.

The Problem

The NZ government recommends open standards compliance for government software procurement. Unfortunately the incentives not to comply are so strong that dominant software suppliers ignore the government's recommendation and quietly snub open standards at every opportunity. They instead use proprietary standards, over which they have complete and unilateral control, to "lock in" government customers to maximise their profit. The widespread use of proprietary standards is a market distortion, a form of customer-granted monopoly, which is exploited by the private sector at the expense of the taxpayer.

As a result of this ineffectual recommendation, the NZ software landscape is completely dominated by software suppliers who have achieved monopolies with government  including all-of-government contracts. These suppliers use proprietary file formats, protocols, and APIs to lock their lucrative government clients in. They fend off competition not by producing better software, but by ensuring that competing technologies are incompatible with those proprietary lock-in mechanisms. Would-be competitors are made to appear more expensive than they really are through the deliberate actions of the incumbent suppliers who the government allows to persist in using proprietary standards.

A few of these de facto standards have become so widespread that most people rely on them to achieve day-to-day interoperability across government departments and with private industry and the public.

This perceived interoperability comes at a cost: government agencies, private industry, and the citizens are effectively forced to procure the specific software titles provided by those proprietary suppliers in order to allow reliable exchange of files and data. This is only possible with a proprietary software monoculture controlled by an oligarchy of suppliers. The proprietary control by these suppliers means there is little or no competition in many aspects of software procurement.

Because of government policy, the playing field is tilted in favour of the incumbent suppliers who engage in lock-in practices.

While most people in a relatively wealthy country like NZ can afford to buy into the monoculture, there are many sound ethical, technical, and social reasons for choosing alternatives to those products. Chief among them are privacy, security, capability, freedom, access, and cost. Unfortunately, these more palatable alternatives cannot promise reliable interoperability, because any time they threaten the monopolies of the incumbents by reverse engineering those proprietary standards, the incumbents can simply change them and break compatibility subtly but completely.

The NZ government's current weak position, recommending open standards, must be changed. It is unacceptable that the government effectively mandates that the private sector and the general public purchase specific products from specific proprietary software suppliers in order to meet their legal and commercial obligations to collaborate and communicate with the government.

The Remedy

To level this slanted field, we request that the NZ government mandate that all document exchange with the private sector and general public adhere to open standards. Following an open consultation process, the UK government issued a very similar policy edict last year. 

The NZ government should require that the open standard formats be used exclusively to store and exchange files and data. This policy could be enacted at minimal cost right now: most of the proprietary software currently in use already supports the open standards the UK adopted. Currently, the suppliers implicitly encourage users to commit all their work to the supplier's own proprietary alternative by making them the default choice. Over time, the millions of digital artifacts currently held in proprietary formats, could be progressively converted to open standard formats.

More generally, we request that the NZ government require that all off-the-shelf software procurement identify and required independently verified compliance with with relevant open standards, and that bespoke software solutions should adopt or even - in collaboration with a number of suppliers and domain experts - design a vendor-neutral, royalty free open standard borrowing from existing international open standards where possible.

Then procurement can be undertaken on a level playing field where any software complying with the relevant open standards can compete. Experience and economic theory shows that this will have the side effect of lowering the government's ongoing software procurement costs substantially and increasing access to higher quality tools throughout government and the private sector.

Caveat

We recognise that compliance with an open standard does not necessarily equate to practical interoperability which, of course, is the ultimate goal of standards. Open standards compliance is necessary but not sufficient to achieving practical interoperability. It also serves to provide an independent reference for compliance and ensures that no one actor in the marketplace can unilaterally dictate the direction that the rest of the market must take.

Benefits

We believe mandating open standards compliance by all NZ government software users will

  • reduce access issues for citizens and the private sector,
  • substantially lower the cost of software procurement in the medium term,
  • substantially reduce the risk of software project failure,
  • improve the suitability of software solutions,
  • allow domestic software suppliers to compete more effectively,
  • allow domestic software suppliers to engage in "permissionless innovation", and
  • increase the value of their export offerings by supporting globally recognised open standards.

Risks

The NZ government is likely to experience a backlash from the current incumbent software suppliers whose ongoing revenue would be affected by this policy change. In the UK, multinational software vendors like the Microsoft Corporation took issue with the decision and undertook various countermeasures. Luckily, by leveling the playing field, the UK no longer needs to mollify multinational corporations, and can instead find suppliers better suited to their national interest.

Another risk is that this sort of policy change might be incompatible with two international agreements of unprecedented scope and implication: the Trans-Pacific Partnership Agreement (TPPA)  - here's a brief analysis of how it's likely to affect NZ - and the Trade in Services Agreement (TISA). Both are being negotiated in complete secrecy, so all the knowledge we have of them is based on Wikileaks. We would encourage the NZ government to reconsider its participation in these negotiations given the non-transparent and therefore fundamentally undemocratic way in which they are being negotiated. As minimum this risk could be mitigated by the NZ government insisting on making the text of both agreements available for public scrutiny.