Last month, when Sun Microsystems announced a $1 million grant for innovative open source projects at the Free and Open Source Software conference in Bangalore, it wasn’t the sort of news that makes major headlines. Larger amounts have been committed before. IBM, for instance, is spending $1.2 million to set up an open source Software Resource Center in partnership with the Center for Development of Advanced Computing in Pune and the Indian Institute of Technology in Mumbai. And this is only one of IBM’s India projects. Sun has spent almost $2 billion supporting open source initiatives across the globe.

Simon Phipps, chief open source officer at Sun, notes, however, that “[India] is where so much innovation is happening.” The award is meant to catalyze projects in six Sun-created environments — OpenSolaris, GlassFish, NetBeans, OpenJDK, OpenOffice and OpenSparc. While the competition is not limited to open-source programmers in India, Phipps said he was announcing the award in India “because that’s where I expect the greatest open source community growth to come from in the near future.”

The question that Sun’s award raises is whether India can become the new vanguard of the open source movement and, if so, whether that is a desirable goal. Not everybody agrees that open source is the best step forward for India’s software industry.

Ajay Shah, senior fellow of the New Delhi-based National Institute for Public Finance and Policy, and former professor at the Mumbai-based Indira Gandhi Institute of Development Research, has been an advocate of open source for many years. Nearly a decade ago, he wrote in the daily newspaper Business Standard, “Open source is a profound idea…. The enduring puzzle of India’s software companies is their persistent inability to grow from projects to products. Open source is a powerful answer to this problem. Open source reduces the importance of products and raises the importance of services.”

Shah points out that with open source software, “Anyone can contribute by improving the code — adding new features, correcting errors, etc. The open source universe avoids the waste involved in ‘reinventing the wheel,’ which takes place in all software companies. In the open source world, each programmer builds on the work of others before him. This brings down the cost of development.”

Although progress has not been as rapid as he had initially hoped, Shah remains optimistic. “My perceptions have changed from concerns to confidence,” he says. “Earlier it was ‘open source is great, but will it work?’ Today, it is ‘open source is great and it works.'”

Open source has drawn advocates from across the spectrum. Eric S. Maskin, one of the three winners of the 2007 Nobel Prize for Economics, asserts that patents work as a barrier to growth in the software world. Innovations tend to be sequential; open source ensures that no black boxes block the growth path.

Another believer is A.P.J. Abdul Kalam, India’s former President. At a speech at the International Institute of Information Technology in Pune, he spoke about an encounter he had with Microsoft chairman Bill Gates. While Kalam was advocating open source as the best solution for a developing country like India, Gates was unmoved in his belief in the superiority of proprietary software developed by a commercial company, such as Microsoft’s Windows operating system and desktop software. “Our discussions became difficult, since our views were different,” said Kalam. Which view now prevails? “The unfortunate thing is that India still seems to believe in proprietary solutions,” Kalam added.

Collaboration and Innovation

Not everybody is as pessimistic. IBM has been one of the foremost advocates of the open source movement, and has helped to promote the initiative in India. “The nature of innovation is changing — becoming open, collaborative, global and multidisciplinary,” says Manojit Majumdar, IBM India country manager for academic initiatives. “Global adoption of the Internet — and pervasive technologies based on open standards — have stripped away traditional barriers to innovation such as proximity of natural resources, geographical constraints and access to both information and insight.”

Majumdar claims that governments and businesses “across the globe and in emerging economies like India are showing increasing interest in open source alternatives to proprietary software. The reasons for this choice are the flexibility in IT decisions and the time and cost savings of open standards that are now becoming increasingly popular with businesses around the world.”

Majumdar is confident that this is the future. “The days of the lone inventor in a garage are long gone,” he says. “Today, the world is our lab. Business, academia, and government must work together to embrace these changes and help change the culture and practices to achieve the benefits of innovation in the 21st century.

“Although the open source platform has been around for quite some time, its advantages over proprietary software are being noticed only now. There was hesitation on the part of institutions, due to reasons like lack of awareness, lack of a policy, and concerns over compliance, licensing and intellectual property or ownership. It is predicted that by 2012, 75% of software products will have embedded open source software. In fact, according to our estimates, the growth of the [open source] Linux operating system is now more than 100% a year.”

Sun is not alone in giving awards for open source in India. IBM has instituted the Great Mind Challenge, a national contest for students from engineering colleges who are required to develop solutions in a real-life scenario using IBM open source software. Through this contest, now in its second year, IBM has provided training on open standards-based technologies to more than 80,000 students across 745 colleges in India.

Although open source has been progressing in fits and starts, it has several landmark projects to its credit. “Are you aware of the PRISM [Parallel Risk Management System] project?” asks Shah. “PRISM does risk management in real time at [India’s] National Stock Exchange (NSE). NSE is one of the world’s biggest exchanges. PRISM was done using open source.” PRISM cost NSE only around Rs. 2 million (approximately $50,000). Had a proprietary software package been used, it could have cost NSE several times that amount.

Open source has made headway in e-governance projects where the scale of operations is large. Venkatesh Hariharan, co-founder of the Open Source Foundation of India and an evangelist for the cause, mentions the Maharashtra e-governance projects, where the preferred option was the open source Linux operating system.

Not all the states in India have opted for open source, however. Maharashtra has company in Madhya Pradesh and Goa, but Punjab, Rajasthan, Karnataka and Andhra Pradesh use both open source software along with products from Microsoft. So does the government of India. SWARAJ, a state-of-the-art solution for managing the panchayati raj (local government) system in the country, was launched in late November 2007. It was developed by Microsoft as a single, integrated application. Microsoft partners with 14 state governments, and more than 300 e-governance applications run on Microsoft’s Windows platform.

The View from Microsoft

Ravi Venkatesan, chairman of Microsoft India, says it is no longer an either/or option. “We firmly believe that multiple platforms can and should co-exist and [we] recognize both the advantages of open source and the fact that platform heterogeneity is a reality in today’s environment,” he says. “Accordingly, we have taken several interoperability initiatives in the larger interest of our customers, and this is well reflected in Microsoft’s ‘shared source’ philosophy. Our focus is on enabling our customers to connect to other platforms, applications and data easily.”

Venkatesan adds that “Microsoft continues to focus on providing better value through lower total cost of ownership [TCO], higher reliability and better performance as well as better IP [intellectual property] indemnification than any other software provider.” In his view, despite its greater initial cost, Microsoft software is a better value than the open source alternatives. “Versus Linux, we deliver a clear value proposition to our customers. The USP [unique selling proposition] of the Microsoft platform and our range of offerings is our end-to-end stack of offerings and our focus on integrated innovation. Customers, too, have matured in their view and there is almost universal recognition that Linux is not ‘free’, and that Linux today resembles more a commercially driven technology. Customers are beginning to look at Linux vendors like any other commercial software provider — focusing on the overall business advantage, value for money and the risk associated with making long-term technology investments.”

Venkatesan claims that “in today’s do-more-with-less IT environment, TCO is an acid metric that enables customers to make informed IT investment decisions. An India-specific TCO study conducted by Frost & Sullivan concluded that Windows offers 15.9% lower TCO than Linux on an aggregate basis. Further, the number of security vulnerabilities is lower on Windows, Windows’ responsiveness on security is better than Linux, and Microsoft provides uncapped IP indemnification of their products while no such comprehensive offering is available for Linux or open source.”

But isn’t open source better for a “poor” country like India? Not at all, answers Venkatesan. “We should look at technology discussions in perspective, and when we do we will find that it has nothing to do with a country being poor or rich, but more to do with reliability of the framework, affordability and relevance. We should not confuse affordability with ‘price’ but should look at the TCO or lifecycle cost, including cost of access.”

“Open source is a relatively new concept in India,” says Hariharan of the Open Source Foundation. “While it is fast gaining popularity, it is too early to expect it to be all-pervasive. As more people become familiar with the concept of open source, it will become a mainstream phenomenon. For example, recently, Samir Brahmachari, the director general of the Center for Scientific & Industrial Research, said that we must use the open source model for research in tuberculosis. On the software side, many government agencies are moving over to open source. Kerala is moving 12,500 high schools to open source. Many corporations are standardizing on the open source office suite OpenOffice. So, overall, open source is catching on and the future is bright.”

In looking at the growth of open source software in economies like India, Kendall Whitehouse, Wharton’s senior director of information technology, stresses that it is important to distinguish between two different aspects of its proliferation: how quickly India will become a hotbed for open source development and the rate at which Indian companies and governmental agencies will adopt the use of open source software. “Although these two issues are obviously interrelated, they differ in terms of their economic incentives” because open source software is freely distributed. Whitehouse believes it is likely that the adoption of open source software by large companies may initially advance more rapidly than development efforts by Indian programmers, although, he admits, “the one will follow the other.”

Workable Model

Rajesh Jain, managing director of Mumbai-based Netcore Solutions, whom Knowledge at Wharton interviewed in 2006, says that “the open source model does work. Look at some of the biggest Internet companies. Many of them have some elements of their IT infrastructure built using open source, as do other organizations — big and small. From the perspective of developers, there is an altruistic approach to software here. But that has also not stopped commercial companies being created around open source. Examples include Red Hat and MySQL. IBM, too, has over the years committed resources in terms of money and people to open source software. In the end, it’s a business model which is a win-win-win — for developers, for IT companies and enterprises. And that’s why open source has emerged as a formidable business model.”

Wharton’s Whitehouse agrees, and points out that within the world of open source software, there are different licensing models with varying restrictions on how extensions to the original software code can be used. “Some open source licenses require all modifications of the software to be distributed freely under the original open source license. Others, however, allow the developer to use the open source code as the basis of commercial, proprietary software.” Whitehouse concludes that while some open source advocates decry the option to use freely-distributed code as the basis of a commercial product, this model may help to facilitate open source development efforts in emerging economies such as India.

If open source is the future, even if integrated into commercial products, is India going to be (as Sun hopes) its biggest hub for developers? “It’s possible,” says Jain. “India has one of the largest concentrations of software developers, and today a significant portion of software development is around open source. So what Sun says may be true. I do not have actual estimates.”

It’s not just Jain. Nobody seems to have any estimates of the number of people involved in open source work. Estimates of the members of the community in India vary from 2,000 to 200,000.

Most Indian companies are involved in handling outsourced projects. They deal in proprietary software; interest in open source seems to be peripheral. “Currently most of our software companies are oriented towards coding,” says Hariharan. “But that could change as many start-ups emerge across India. For many of them, using open source is natural because it helps them minimize capital expenditure.”

“India needs to contribute more aggressively to the process of open source development,” says Jain. “We have an opportunity to establish leadership in this space.” Hariharan adds, “India has a lot of creativity, and it is just a matter of time before that is reflected through open source software.” In other words, the future of open source in India is still an open question.