The FOSS(ilization) of the supply chain: The risks of a strategy centered on Free and Open Source Software
I recently reviewed (actually browsed as there were only10 PowerPoint slides in total) a Government of Canada presentation to attendees of the September 2006 CIO Summit in Ottawa.
Titled “IM/IT Government in Canada . . . Open to Business” the presentation emphasized the fact that “change is the only constant.” Referencing a transformation agenda which highlighted a variety of important areas including internal services such as finance, human resources and procurement, the case for open standards was offered as the best possible way to manage this ongoing evolution. More specifically, the concept of Free and Open Source Software (FOSS) as a viable solution was introduced.
Now this is a subject which is of great interest to me personally as I have been tracking the transition of traditional software licensing models to the present day Software as a Service (SaaS) model since 1998 (my recent Ariba interview post reviewed the emergence of SaaS at some length). The question that my ongoing research has attempted to answer is if SaaS is a sustainable model or merely a transitory link or bridge to FOSS? The fact that the City of Houston “shifted” to a FOSS platform in response to Microsoft’s demand that the city change to a $12 million, multi-year licensing plan is certainly worth noting. (Note: all research data at this point in time indicates that both SaaS and FOSS will likely co-exist as they each address unique requirements that are indigenous to their respective business models.)
Incorporating excerpts from an earlier Defence R&D Canada presentation (Free and Open Source Software Issues in Military Computing) by Robert Charpentier and Richard Carbone, the CIO Summit PowerPoint highlighted a number of concerns with the GoC’s intimated pursuit of a FOSS strategy.
While there were several notable risks listed such as the increased reliance on localized resources to ensure “system maintainability” (keep this one in mind as a point of reference for later in this article), for the purposes of this posting I am going to focus on the one involving Procurement challenges and the inherent “lack of imputability when software is developed via internet collaboration.”
FOSS: this decade’s Internet
It should come as no surprise that FOSS’ growing presence is in many ways similar to that of the Internet’s. Steadily and almost imperceptibly at first, FOSS has gained considerable recognition especially within the public sector. As one publication noted, “various governments around the world have begun to take notice of FOSS,” and have “launched initiatives” in an attempt to capitalize on its purported benefits. With an increasing number of white papers and reports advocating a FOSS-centric strategy, the majority of current initiatives surprisingly originate at the local or regional level (i.e. municipalities).
Not surprisingly however is the fact that European Union countries such as the United Kingdom and Germany have what many would consider being aggressive programs already in place. Fueled by papers such as “Linking Up Europe: the Importance of Interoperability for E-government Services,” these governments see Open Standards through FOSS as a means of combating the “closed, vertical, un-scalable and frequently proprietary information systems,” that until recently had dominated the majority of public sector initiatives.
And while there is not currently an official FOSS policy in the U.S., a number of states such as California, Texas and Oregon are in the process of attempting to pass FOSS legislation. As illustrated by my earlier reference to the City of Houston, FOSS initiatives at the municipal level in the U.S. including the City of Largo, Florida’s GNU/Linux program which generated savings of more than $1 million in terms of hardware and software costs, are a clear indication of the potential benefits.
Needless to say, savings both realized and projected provide governments with more than enough incentive to actively investigate and develop a FOSS strategy.
Supply base impact and the use of intermediary resources
Once a public sector organization has determined that FOSS is a viable solution, the process of procurement and in particular key elements involving selection, implementation and ongoing maintenance requires a great deal of consideration. For example, with traditional licensed-based applications in which an ongoing maintenance agreement was an integral part of the initiative, the majority of clients grudgingly paid what they considered to be hefty fees for a service many felt was overpriced and generally ineffective. So even though there are no direct costs associated with the “source product,” value-added services such as customization, implementation and ongoing support from intermediary providers have to be quantified up-front.
The next step is to identify and effectively engage the intermediary supply base. With regards to the GoC’s CIO Summit presentation, this would include determining how the current purchasing guidelines will impact the selection process should they choose to move forward with a FOSS program? And this is where the historic challenges associated with the Way Forward initiative may potentially muddy the waters.
As is often the case a great deal of the IT industry’s innovative spark and expertise resides within the SME community. If this core competency trend holds true in terms of FOSS-centric initiatives (which is certainly a reasonable assumption), concerns such as those raised by Shane Schick in his article “IT industry outraged by Feds’ procurement strategy” (June 14, 2006, itbusiness.ca) are worth revisiting. In particular, the GoC requirement for suppliers to “pass” what was referred to as a “rigorous set of qualifying screens” to even have an opportunity to compete for government business. The main issue with the screening process is that it is generally felt that a large segment of the SME supply base will be disqualified from bidding on GoC contracts. With similar concerns being echoed by associations such as CATA, and crystallized by articles such as the September 5, 2006 “Would Gov’t Procurement Process Neglect FOSS?” by Josh Chalifour, the potential for a continuing disconnect between key stakeholders seems likely. (I think that this would be an ideal time to reference the recent Yes Virginia postings including their success in supply base management.)
Certainly a letter written by the Canadian Linux Users Exchange’s (CLUE) Policy Coordinator Russell McOrmond in late August 2006 would seem to foretell the possibility for a continued strain in the relationship between the GoC and the associations that represent its vast supply base.
In his correspondence McOrmond cites the similar challenges faced by FOSS companies and those of the CATA membership in which “the government wants to skip intermediaries when procuring products from a single source.” Besides overlooking the value added component of these intermediary relationships, McOrmond contends that a single source vendor who also offers related services results in the GoC “bypassing” the very policy that is intended to protect competition. If this is in fact the case (note my caveat), then the GoC strategy contradicts the emerging trends highlighted in a number of reports including an April 2007 U.S. Federal Government summary of three studies which revealed a noticeable shift in Federal contracting practices.
New trends that benefit small business
As a result of the backlash over the utilization of sole-source contracts with large companies in Afghanistan, Iraq and the Hurricane Katrina clean-up, studies by three independent groups have identified an emerging trend in the U.S. Federal Government’s contracting practice.
Referred to as a “major and growing bonanza for small business firms, particularly those run by veterans, women and minorities,” the data indicates that a dramatic shift in favor of small business in three key areas; Information and Technology (IT); Operations & Maintenance (O&M); and Architecture, Engineering Construction & Environmental (AEC) has put them “back on top of much of the federal contracting world.”
For example, the number of federal IT contracting opportunities available to small business increased from 35% in 2002 to 46% in 2007. And while “larger firms still tend to dominate more of the advertised IT opportunities,” the overall IT opportunities for large contractors declined from 71% in 2002 to 62% in 2007.
The upward trend for SME’s also extended to include Pre-RFP contracting set-asides for small businesses which saw opportunities in this area increase from 40% in 2002 to 52% in 2007. Conversely, the number of full and open opportunities, (which tend to favor the larger organizations) decreased from 65% in 2002 to 55% in 2007.
Of the five emerging small federal contractor trends identified in the summary the two that are most relevant to this posting are the “demise of sole-source contracting and a resulting focus on heightened competition.” Besides validating McOrmond’s position regarding the GoC’s purported circumvention of intermediary suppliers when procuring products from a single source, this shift in U.S. Government contracting policy will clearly create more opportunities for small business.
The second is an actual reversal of a recent trend whereby more “big” federal contracts will be “unbundled” for small contractors. Initiatives by agencies such as NASA, whose breaking up of a number of their mega-contracts into more manageable opportunities for small businesses and small business teams, is an example of how the “new shift to smaller contractors will take place.”
And it is here that the tie-in to the procurement challenges that were raised in the 2006 CIO Summit presentation comes into play. Challenges which I might add are not unreasonable given the nature of the FOSS development community.
In a 2006 editorial paper on FOSS development processes, several thought leaders from various institutions throughout the U.S. and U.K., made an interesting observation. In the paper they stated that the “enactment of complex software development processes” was mostly being performed by a “loosely coordinated group of software developers and contributors,” who are “globally dispersed.” (Does anyone else notice the similarity with how Service Oriented Architecture is defined?) This “loose” coordination has led some organizations to pay their own internal software development staff to work on FOSS projects as part of their overall job.”
Three choices?
Obviously concerns which go beyond the procurement process itself to include version control, system maintainability and the adjunct need to increase localized resources, higher levels of technical skill and potential limitations in terms of integration and user-friendliness (it sounds more like SOA with every sentence) need to be addressed. The question that remains is how? And this I believe is where the GoC faces its most difficult, certainly most politically sensitive issue with FOSS. Given the above, I believe that the GoC has three choices.
The first is to “fall back” into a reliance on a large vendor who may offer the illusion of security associated with a one-stop shop (does anyone recall the old precept – no one ever got fired for buying IBM?). This was the Foss(ilization) to which the title of this post refers.
Another alternative would be to follow the lead of the U.S. Government and in particular NASA and really cultivate the expertise of a more localized supply base such as is available through the SME community. (An important byproduct of this option is domestic cluster development as outlined in my August 28th post, Public Sector Procurement Practice and the Principles of External Economies, Clustering and the Global Value Chain.)
The third option is to assess and develop where necessary an internal capability along the lines of the organizations referenced in the editorial paper. As a firm believer in recognizing and utilizing the expertise within one’s own organization (see Acres of Diamonds – not my paper, but the actual story by Russell H. Conwell), this is both an interesting and viable alternative.
That said there is actually a fourth option which is a combination of two or more of the three. However, given my belief that the days of being outnumbered in the boardroom by white shirts in blue suits is long gone, the most likely scenario (if pursued) would be a combination of SME cultivation with an internal capability that keeps the GoC in control of the ship.
The FOSSilization of the supply chain The risks of a strategy centered on Free and Open Source Software - To learn more about this author, visit Jon Hansen's Website.
Like this article? Share it with your friends
![]() | |
| |
No article feedback found. |
| |
Leave Your Feedback |
|
| |
| |||
Leanne Hoagland-SmithAre your sales where you want them to be? Will you be one of the few who achieves sales or business success or one of the many who have failed to change? Are you tired of being told you are like everyone else? Then you may find my first book on sales of interest. Be the Red Jacket in the Sea of Gray Suits, The Keys to Unlocking Sales available at Amazon or at http://www.processspecialist.com/red-jacket.htm. This book is a reflection of my no-nonsense approach to improving sales to overall business results. If you are truly committed to making sustainable changes, then I can help you secure a positive return on your investment because I focus on executable solutions not telling you the problems you already know you have. From training to corporate (group) coaching to executive one on one coaching, my approach is to assess, create awareness, build a goal driven action plan and then execute. The bottom line question is "Not do you or your employees know it, but do you or they want to do it?" Please call for a free strategy session at 219.759.5601. - Visit Leanne Hoagland-Smith's Website |
|||
Anne BarrAnne Barr has over 26 years experience in sales and marketing, six years as a franchisee. She has assisted over 367 business owners and purchasers to achieve their goals in career change, transition and exit strategy. She holds the designation of Certified Franchise Executive from the International Franchise Association, Certified Business Intermediary from the International Business Brokers Association and Board Certified Broker from the Texas Association of Business Brokers. Anne is active in professional organizations, networking groups and volunteers for non-profit entities. As owner/operator of four successful businesses, Anne has proven people skills and enjoys helping clients find the right "fit" in business ownership. Visit www.FranchiseOpportunitySpecialist.com for more information about me and my company. - Visit Anne Barr's Website |
|||
Dianne CramptonDianne Crampton is an executive leadership coach, team culture consultant, author and president of TIGERS Success Series, Inc. Dianne has been helping CEO's and Executives connect their employees to their core values and goals for over 20 years using the trademarked TIGERS team culture process, which stands for trust, interdependence, genuineness, empathy, risk and success. To download a free white paper on behaviors that build strong teams and behaviors that will predictably tear them down go here. Dianne's contribution to the 2010 Pfeiffer Consulting Journal (an imprint of John Wiley and Sons Publishers) entitled TIGERS Hearted Teams is available in November 2009. Her new book TIGERS Among Us: 5 Winning Business Team Cultures And Why, Three Creeks Publishing will release in March 2010. To receive publishing discounts, subscribe to the free TigerTracks Newsletter here. - Visit Dianne Crampton's Website |
|||
George LudwigGeorge Ludwig is a recognized authority on sales strategy and peak performance psychology. An international speaker, trainer, and corporate consultant, he helps clients like Johnson & Johnson, Abbott Laboratories, Northwestern Mutual, CIGNA, and numerous others improve sales force effectiveness and performance. Though it's George's strategies and processes that help corporations increase productivity and performance, it's his tremendous energy and dynamism that spark the transformation. Again and again, clients remark on his amazing ability to unleash human capacity and inspire men and women to break out of their comfort zones. The result is a whole new type of salesperson. His customized presentations teach achievers to make stunning advances in their lives. From helping salespeople realize cherished dreams to helping corporations exponentially accelerate revenue streams, George Ludwig leaves audiences and individuals empowered, emboldened, and clamoring for more. George is the best-selling author of Power Selling: Seven Strategies for Cracking the Sales Code and Wise Moves: 60 Quick Tips to Improve Your Position in Life & Business. - Visit George Ludwig's Website |
|||
Casey GollanCasey Gollan, Business Coaching & Mentoring Programs. Add $1 Million to $10 Million in the next 1 to 3 years. Since 1996 Casey has to added hundreds of millions of dollars to businesses. Watch a free video see client results Business Coaching website. - Visit Casey Gollan's Website |
|||
Stephanie RobeyStephanie Robey is President and CoFounder of Pivot Positive, LLC - an Internet marketing business focused on helping people start work at home ventures. Previously, she was employed at The Search Agency with over 20 years experience in graphic design and 10 years experience in online marketing. She was responsible for launching the Conversion Path Optimization (CPO) unit where she and her team have conducted hundreds of optimization tests for online companies across multiple verticals. She is a successful entrepreneur having started and sold 2 companies and remains on the board of directors of the third, PhotoSpin.com Stephanie began her career in the direct marketing realm creating and producing direct mail for many of the major cable television companies and directly attributes her understanding of Internet marketing to those early offline experiences. Stephanie is a graduate of San Diego State University with a BFA in Graphic Arts and also holds an Executive MBA from the Graziadio School of Business and Management at Pepperdine University. Read Steph's Blog Meet Steph and Dave Sign up for our Free 7-Day BootCamp: Self Employed & Rich - Visit Stephanie Robey's Website |
|||
|
To learn more about the Evan Elite Author Program please contact us. | |||
![]() | |
![]()
| |
![]() | |
|
| |
![]() | |
|
| |
![]() | |||||||
|
![]() | ||
|
| ||
![]() |
| Have you written articles that would be of value to entrepreneurs? Become an expert on our site by publishing them! Expose yourself to a wide audience, drive more traffic to your website and get more sales! Click Here for details. |
|
|
![]() |
| Modeling the Masters: Learn the true secrets behind Walt Disney's business success factors & grow your company! Video produced by Phanta Media |
|
|
![]() |
"Learn straight from Evan how you can Make a Full Time Income (And More) from a Website"
Click Here To Learn More |
|
|
|
|
Get advice & tips from famous business owners, new articles by entrepreneur experts, my latest website updates, & special sneak peaks at what's to come!
|
![]() |
|
|
![]() | ||
|
Top 50 Blogs For Startups
Top Blogs To Watch In 2008 | ||
|
Top 50 Debt Blogs
Learn To Get Out Of Debt | ||
![]() | ||
![]() | ||||
| ||||
| ||||
| ||||
|
|
|
|
|
||||||||||||
|
|
|
|
|











Subscribe to Jon's articles











