The report stirred up controversy in Denmark when it was published there last year, but it had not been available in English until this week, when the Danish Board of Technology released it in a translation backed by the European Parliament.
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"Open-source software represents a serious technical and economic alternative to proprietary software--even where there are proprietary industry standards," the report said. Open-source software licenses allow anyone to modify and redistribute the source code of applications, meaning that no one organization controls the software's development.
The study recommended that governments take an active role in promoting standardized file formats and alternatives to dominant proprietary applications to help break a "de facto monopoly."
"The ordinary market conditions for standard software will tend towards a very small number of suppliers or a monopoly," the Board of Technology stated in the report. "It will only be possible to achieve competition in such a situation by taking political decisions that assist new market participants in entering the market."
The board was particularly critical of closed, proprietary standards such as Microsoft's Word format, arguing that they go against the principles of e-government by requiring citizens to use particular software and reinforcing monopolies.
"A strategy for e-government should not be based on a closed, proprietary standard in a key technology," the report said. "There is no genuine competition at present in the desktop (office software) area, largely due to the fact that Microsoft formats also represent de facto standards for electronic document exchange."
The board recommended that the Danish government take an active role in promoting an open, XML (Extensible Markup Language)-based alternative for file formats, either by switching to the OpenOffice.org XML format or by launching a European project to develop a new format.
However, the report recognized that establishing a new or alternative format could be an uphill battle, given that Microsoft Office cannot read OpenOffice documents or other formats. The board recommended that Denmark begin a series of trials to test the feasibility of introducing open-source software such as OpenOffice.
Open source could also help make public sector software procurement more cost-effective by introducing real competition, the report said. "Proprietary systems entail a strong tie to a single supplier, and in reality this precludes competition," it argued. "User-owned systems are more expensive in actual development, but provide an opportunity for greater competition in continued development, and are therefore cheaper in the long run."
A coordinated plan for using open source could also give governments a stronger hand when the time comes to renegotiate contracts with Microsoft, the study said.
The Danish Board of Technology urged the government to take action, dismissing the lukewarm approach of other European countries: "It is...not sufficient for us in Denmark to follow Britain and Germany, for example, in merely recommending that open source should be 'considered.' A more active decision must be taken in those areas where there is a de facto monopoly."
Although the report sparked a heated debate in Denmark, the country's government has not implemented any wide-ranging open-source policies, merely reaffirming in a June white paper that it would choose software that offered the best value for the money.
Matthew Broersma of ZDNet UK reported from London.