OpenOffice makes government inroads

Government bodies in Israel and Texas are starting to shift from Microsoft Office to open-source alternatives, driven by budget pressures.

Two significant government bodies, the Israel Department of Commerce and the City of Austin, Texas, are moving toward replacing Microsoft Office installations with the OpenOffice.org productivity suite. This continues a worldwide trend of governments attempting to cut costs with open-source software.

The Department of Commerce has made a strategic decision to reduce government dependency on Microsoft, and is to replace most of its Microsoft Office desktops with OpenOffice, according to a report this week in the Israeli business daily Globes. The software is to run on Windows using IBM hardware, the paper said.

Also this week, the City of Austin said it would migrate several hundred Microsoft Office installations to OpenOffice beginning in January, as part of an ongoing testing program.

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OpenOffice is an open-source office suite based on Sun Microsystems' StarOffice. Open-source software is not controlled by any one company, making it attractive for organizations wary of paying steep licensing fees to a single supplier.

Many public-sector bodies are also eyeing, or actively migrating to, the open-source Linux operating system for desktop use. Linux is widely used on servers, but has yet to make a serious dent in Microsoft's dominance of the desktop.

Austin made the decision to shift 300 desktops in the Communications Technology Management department to OpenOffice after testing the software on 30 desktops for several months, according to Austin's acting chief information officer, Pete Collins. He said that testing would continue, with the possibility of more of the city's 5,200 desktops shifting to OpenOffice.

He stressed that there are no plans for the city to drop Microsoft Office, partly because applications such as the City Council's agenda management system depend on Microsoft software.

The city is paying more than $3 million for Office under a 2-year-old licensing agreement, and is facing a $30 million budget deficit.

Organizations that shift away from Microsoft Office are cutting themselves short, according to Oliver Roll, Microsoft general manager for Asia-Pacific and Greater China.

Speaking at the Singapore launch of the new Office System 2003 productivity suite in November, Roll argued that packages such as OpenOffice or StarOffice lack the sophistication of Microsoft's latest offerings, and instead "replicate the Microsoft Office of six or seven years ago".

Although there has been speculation that cheaper Office alternatives such as StarOffice and OpenOffice would eat into Microsoft's overwhelming share of the desktop software market, analysts said that has yet to happen.

Though Office revenue was essentially flat in Microsoft's fiscal year 2001 compared to a year earlier, sales rebounded following the introduction of the controversial Software Assurance licensing program in 2002. Wall Street analysts expect Office sales to grow to more than $10 billion in fiscal year 2004, compared with $9.23 billion in 2003.

Matthew Broersma of ZDNet UK reported from London.

CNET News.com's David Becker and CNETAsia's John Lui contributed to this report.