San Isidro, March 21st 2002

Mr:
Edgar Villanueva Nuñez
Congressman of the Republic of Peru

Present.-

Dear sir:

First of all, we want to thank you for the chance you gave us to inform you about our work in the country in benefit of the public sector, always looking for the best alternatives to achieve the implementation of programs that will let us consolidate the iniciatives of modernization and transparency in the State.

In fact, thanks to out meeting today you are aware of our global achievements at the international level in the design of new services for the citizen, among the framework of a model State that respect and protects intellectual property.

This actions, as we talked about, are part of global iniciative and today exist several experiences than have let us collaborate with programs supporting the State and community in the adoption of technology as an strategic element to impact the life quality of the citizens.

Besides, as we arrenged in this meeting, we assisted to the forum organized in the Congress the day March 6th regarding the law project that you are leading, where we got the chance to listen to several presentations that takes us now to expose our position so you have a wider lanscape of the real situation.

The project establishes as mandatory for every public organism the deployment of free software exclusively, that's open-sourced software, something that transgress the principles of equality in front of law, of no discrimination and the right of free private iniciative, freedom of industry and contracting protected by the constitution.

The project, by making mandatory the use of open-sourced software, establishes a discriminatory and non-competitive treatment at times of contracting and adquisitions by the public organisms violating the base principles of the "Law of State Contracting and Adquisitions" (Number 26850)

In this way, by forcing the State to favor a business model supporting exclusively open source software, this project is only discouraging local and internationl software manufactures who are the ones that make the important investments for real, the ones that create a significant number of direct and indirect jobs, besides contributing to the National Net Income vs. a model of opensource software that tends to have every time a lower economic impact due to creating principaly jobs in the services area.

The Law project imposes the usage of open source software without considering the dangers that this carries from the points of vie of security,warranty and posible violation of intellectual property of third parties.

The project erroneously handles the concepts of open source software that not necesary implies that the software is free software or has no cost, arriving to wrong conclusions about money savings by the State without the suport of any cost-benefit analysis to back this position.

It is wrong to think that Open source software is free. Research by Gartner Grouo (and important market researcher in the technology world well-known worldwide) has poited that the cost of software adquisition (operating system and applications) is only 8% of the total cost of ownership that enterprises and organizations must face as consequence of rational and productive use of technology. The other 92% is made of implantation costs, capacitation, support, management and inoperativity.

One of the arguments that support the Law project is the supossed gratuity of opensource software when compared to commercial software costs, without considering that exists volume licensing models that can really benefit the State, in the way that has already been achieved in other countries.

Additionally, the alternative adopted by the project (i) is clearly more expensive because of the high costs of migration and (ii) puts at risk compatibility and the chance for interoperability among informatic platforms inside the State and between the State and the public sector due to the hundred distributions of open source software in the market.

Opensource software in the most of the cases doesn't offer adequate levels of service nor the warranty of well-known manufacturers to achieve a bigger productivity by its users, something that has caused many public entities to go back in their decisions of using opensource software the ones the are using commercial software right now in its place.

This project discourages creativity in the peruvian software industry that sells US$ 40 millions every year, exports US$ 4 millions (10th place in the ranking of peruvian exportations, more than handcrafted goods) and is a source of highly qualified jobs. With a law pushing for the use of opensource software, software programmers loose their rights of intellectual property and their most important source of retribution.

Opensource software, by having the chance of being freely distributed also fails to make any money for their developers by means of exportation. In this way, the multiplier effect of software sales to other countries weakens affecting the grown of this local industry that the State should be stimulating.

In the forum the importance of the use of opensource software in education was discused without commenting on the mayor failure of this initiative in a country like Mexico, where precisely the State officers that supported this project now say that opensource software didn't allowed to provide a learning experience to childs at schools, the adequate levels of capacitation nationwide were missing so no adequate support for the platform was provided and the software didn't showed not shows nowadays the needed levels of integration with the existing platforms at schools.

If opensource software fullfils all the requirements of the entities of the State Why a law is needed to adopt it? Shouldn't the market freely choose which products provide more benefits and value?

I really want to thank you for your attention to this letter and we want to reiterate our interest in meeting you to expose to you in more details our points of view about the project you have presented and be at your complete disposition to share experiences and information that we are sure can help in a better analysis en implementations of an iniciative that looks for modernization and transparency for the State in the benefit of the citizen.

Sincerely,

Juan Alberto González

General Manager
Microsoft Perú