Developing Nations See Linux as a Savior From Microsoft’s Grip

Enylson Camolesi has only to look at his teenage daughter to understand the challenges of overcoming addiction. He’s gently trying to help her kick the habit, grimly aware that the difficult task at home is what he’s attempting to replicate, on a massive scale, throughout the Brazilian government.

But he and other officials are determined to succeed.

Stopping cold turkey may not be an option, but they hope that with time and patience, Brazil’s bureaucrats can be weaned off their dependence on Microsoft Corp. and made to switch to free operating systems such as Linux. A workshop here in May for 2,000 government employees was a modest start.

“This is a pioneering initiative in terms of the Brazilian government,” Camolesi, director of telecommunications in the Planalto Palace, Brazil’s White House, said of the “open-source” project. “This is the opening of new possibilities.”

Halfway across the globe, the leaders of the world’s most populous nation are contemplating a similar campaign. For more than a year, officials in China have been mulling a proposal requiring the government to procure locally produced software wherever possible, which would give a major boost to providers of open-source operating systems.

Together, Brazil and China constitute two of Microsoft’s biggest emerging markets, where potential for growth among a combined 1.5 billion consumers hangs like a tantalizing golden apple waiting to ripen. Government-driven movements to shift to free or low-cost software -- fed by security, economic and ideological concerns -- threaten to dent Microsoft’s ambitions.

In fact, government officials the world over, from local authorities in Austria’s capital to high-ranking national bureaucrats in India, are increasingly moving from proprietary software such as Microsoft’s to open-source products.

Last week, Vienna said it would encourage government employees to drop Windows from about half of the municipality’s 16,000 computer workstations in favor of Linux or other alternatives. “Sometimes it makes sense to break up a monopoly,” information systems chief Rudolf Schicker said at a news conference. “We want to give our employees a choice.”

In June, after more than a year of study, Munich’s City Council voted to shift its 14,000 personal computers to Linux, even after Microsoft Chief Executive Steve Ballmer pressed the case personally and the company slashed its bid. Israel and South Africa also have moved toward Linux.

“The public sector outside the U.S. is definitely in the forefront” of the move to open-source software, said David Smith, an analyst with the research firm Gartner Inc. “It’s where you’re seeing the early adopters and the most interest.”

Microsoft executives, he added, “are up against an awful lot of sentiment -- some of it directed at them and some of that directed at the U.S.”

The anti-Microsoft contingent is motivated in part by money: There are no annual licensing fees to pay with open-source products.

In Brazil, the public and private sectors spent $1.1 billion on foreign-licensed software in 2002, much of it produced by Microsoft, Camolesi said. “That’s very expensive for a country that has other priorities.”

Many supporters of free software say they are inspired by social aims. Free or low-cost software alternatives, they say, make it possible for more people and institutions to afford computers and access to the Internet, which is currently used by only a fraction of the Brazilian populace.

Microsoft’s Windows XP package, for example, costs about $130 here, where the minimum monthly salary is $87.

What’s more, they say, open-source software is less susceptible to security bugs. That’s because the programming instructions are open for review, not kept secret, as in the case of Microsoft’s Windows. In theory, with more people around the world working on open-source software, improving it and exchanging information, the easier it is to spot Trojan horses, viruses and subversion attempts by hackers.

For some governments, the problem is Microsoft itself. They harbor a deep-seated skepticism of global capitalism and what they view as enslavement to a foreign company with a monopoly on the market.

In developing countries such as China and Brazil, eager to assert themselves on the international scene, the political and economic arguments can seem irresistible: Open-source software offers a way to slip out from under the yoke of American supremacy, saving money in the process.

In Brazil, the federal government flirted for several years with instituting free software in the public sector but didn’t commit itself until President Luiz Inacio Lula da Silva was elected in 2002.

With Lula’s left-leaning Workers’ Party in power, the idea picked up steam, leading to an officially sanctioned push to install free software on government computers.

Lula’s advisor for information technology, Sergio Amadeu, has expressed hope that 80% of the computers the government buys this year will be Windows-free. Several ministries have begun experimenting with open-source software, mostly Linux, but Camolesi acknowledged that it was a challenge persuading employees to ditch Microsoft, as it has been with his 13-year-old daughter. His own desktop computer in the Planalto Palace still partly runs on Windows 2000.

Executives with Microsoft Brasil, which reported revenue last year of about $300 million, say the company welcomes competition. Spokesman Lorenzo Madrid noted that the government accounts for only 6% of sales; other sectors, such as Brazil’s finance industry, are bigger customers.

But in a sign of mounting concern over the government’s push for open-source software, Microsoft Brasil’s president, Emilio Umeoka, has recently made public statements suggesting that Lula’s administration was allowing ideology to trump the workings of supply and demand.

What we don’t want are “preference laws that restrict our abilities to compete,” Madrid said. “That’s what we advocate: neutrality in government and other procurement bodies.”

Congressional representative Walter Pinheiro dismissed the accusations. “We’re not interfering with the market. We’re taking to the market the option of another software,” he said. “Who said that only one kind of software can be used?”

Several major Brazilian companies and institutions have already migrated to open-source systems, including Varig airlines, oil giant Petrobras and appliance retailer Casas Bahia. Recently released figures showed that 42% of Brazil’s banks have switched or are phasing in free software, including Latin America’s largest bank, the Banco do Brasil.

To curb the trend, Microsoft Brasil is talking with government officials about the possibility of opening up its source code for review.

In some markets around the world, Microsoft has offered steep discounts of as much as 80%, slashing the price of a version of Windows XP combined with the Office suite to as little as $36 in Thailand, for example.

Microsoft pursued the source-code tack in Beijing, where the Chinese government now has access to the code. Microsoft executives have been on a charm offensive in the Middle Kingdom for some time, meeting with senior officials, giving away computers to schools and donating software to state agencies.

Nonetheless, the Chinese government continues to insist that any market so dominated by a single player works against the interests of consumers and competitors. A recent report by the State Administration for Industry and Commerce said China desperately needed an anti-monopoly law, and specifically cited Microsoft’s grip on the software market and Eastman Kodak’s hold on 70% of the film market.

“Microsoft has made a great contribution to the software industry around the world,” said Li Wuqiang, a deputy director general at China’s Science and Technology Ministry. “But monopoly is not good for innovation, fair competition or end users.”

Although Chinese consumers, like those in Brazil, complain about onerous prices, the government in Beijing is particularly worried that Microsoft might be cooperating with U.S. snoops. This fear was spurred by reports several years ago that cryptographers had found an “NSA Key” -- reportedly short for the National Security Agency -- that gave the U.S. government back-door access to Microsoft Windows 95, 98, NT4 and 2000. Microsoft strongly denied the reports at the time and issued a patch.

“All governments, including the Chinese, have concerns about security,” Li said. “Even the American government doesn’t want foreign parties to know their secrets. With Microsoft, you don’t have the source code, although you can check it. With Linux, it’s open and you can thoroughly study it.”

So far, China’s Communist regime has delayed issuing a decree requiring the use of free software because of disagreement between various government bodies. But an official commitment to free software in China’s top-down society would undoubtedly force more companies to follow suit.

Interest in distributing open-source software and developing offshoots in the Chinese consumer market -- the world’s largest -- has already increased. In January, Beijing-based Red Flag Software teamed up with Japan’s Miracle Linux Corp. to develop a Linux system for the Asian market.

China has made no secret of its plans to become a high-tech powerhouse and sees Linux and other adaptable open-source systems as the vehicle to get there, by stimulating the development of supplementary software and applications. The stakes are potentially enormous: IDC, a market research firm, has projected that the packaged software market in China will exceed $6 billion by 2007.

Yu Dunde, technology director with the website Blog China is migrating to an all-Linux system this summer.

“It’s going to take a long time and a lot of energy to really convert to Linux,” he said. “But it’s very important for the development of technology.”

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Chu reported from Brasilia, Magnier from Beijing and Menn from San Francisco.