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Economics of Linux Adoption in Developing Countries,” IEEE Software, 21 (1), 74-81 Kshetri, Nir (2004), “Economics of Linux Adoption in Developing Countries,” IEEE Software, 21 (1), 74-81. Made available courtesy of Institute of Electrical and Electronics Engineers: http://www.ieee.org/ ***Reprinted with permission. No further reproduction is authorized without written permission from the Institute of Electrical and Electronics Engineers. This version of the document is not the version of record. Figures and/or pictures may be missing from this format of the document.*** focusdeveloping with open source software Economics of Linux Adoption in Developing Countries Nir Kshetri, University of North Carolina, Greensboro here was once a time when developing software required only three main ingredients: a user with a need, a computer, and a programmer. Once these three ingredients came together, the re- T sulting team could largely ignore everything in the outside world except the occasional need for pizza. Later, both the sizes and goals of such teams grew considerably, but often the insular attitude remained. Needs, computers, and software developers still went into a big black box, and sometime later, if the project was fortunate, the two decades, software development has gone required software emerged as if by magic. from an esoteric discipline dominated by For most software developers, those days American and European white-collar workers of splendid isolation disappeared long ago. In- to a significant new global driver of emerging creasingly, software developers became de- national economies. This globalization can af- pendent on their choice of external software fect build-versus-buy decisions at every level products, which supported them but over of software development. Software managers which they had no direct control. A wrong and developers who ignore this expansion do choice could spell disaster for a project, no so at their fiscal and productivity peril. matter how well the actual development went. Linux, an open source operating system, is Recent globalization of software has made an interesting example of a globally available this choice even more critical. Over the last software product that has nontrivial choice and productivity implications for software projects in developing countries. Its low cost, Software globalization affects the build-versus-buy decision source code availability, and range of features process at every level and phase of software development. One of make it an intriguing option when developing the most interesting and controversial issues is the expansion of and deploying new software using limited re- sources. However, software managers must Linux into software development efforts in developing countries. examine the full range of costs and benefits in- 74 IEEE SOFTWARE Published by the IEEE Computer Society 0740-7459/04/$20.00 © 2004 IEEE volved in selecting Linux over proprietary op- tions, because they can have a powerful im- 100 Developed countries pact on both individual developers and devel- 89.7 90 87.4 Developing countries oping countries. A deeper and richer 81.6 understanding of the facilitators and hurdles 80 75.9 of Linux adoption in developing countries 70 could help software developers and marketers devise appropriate strategies to accelerate its 60 diffusion and to recognize cases where a pro- prietary solution might be a better choice. 50 Percent This article examines the positive and negative 40 effects of adopting Linux and ways to achieve the greatest overall benefits for developing 30 24.1 countries and their policy makers. Because 20 18.4 Microsoft’s Windows operating system, used 12.6 10.3 in over 90 percent of the world’s desktops, is 10 the major proprietary system competing with 0 Linux, we compare Linux with Windows on 1998 2001 1998 2001 several dimensions. Linux Internet Year The current status of Linux use Open source software is often touted to be ideal for accelerating the growth of low-income Figure 1. Percentage of countries’ IT sectors, with the expectation that developing and developed countries seem Linux and Internet it will increase their propensity to innovate. more disparate in Linux adoption and use users from developed Developing countries seem to have adopted than in other modern information and com- and developing Linux, the “flagship” of open source,1 faster munications technologies. countries.3–6 than developed countries, according to numer- ous publications. For instance, a study con- Microeconomics of Linux adoption ducted by the United Nations Conference on Software managers must examine four mi- Trade and Development indicated that Linux croeconomics issues of Linux use and selec- has been a significant force behind some devel- tion: ownership, effective use, learning and oping countries’ increased IT ascendancy in re- switching to Linux, and compatibility (see cent years.2 (In this article, the term “devel- Table 1). These economics evaluate the costs oped countries” indicates the 30 member and benefits of Linux versus proprietary soft- countries of the Organization for Economic ware at the level of an adopting unit. Cooperation and Development, and “develop- ing countries” indicates all other countries.) Ownership Because users can purchase Linux from dis- Ownership includes investment, mainte- tributors and also freely download it from nance, and the costs of downtime and obso- various FTP Web sites, it can be difficult to lescence. These costs are a much higher pro- reasonably estimate developing countries’ portion of income for a computer user in share of the Linux market. But the number of Burundi, which has an annual per-capita gross registered users at the Linux Counter domestic product of US$99, than for a user in (http://counter.li.org) and their countries sug- Belgium. Open source advocates argue that gest an approximate distribution of Linux Linux has a lower total cost of ownership users worldwide. In 2001, people living in de- (TCO) than its competing products. For in- veloping countries (81 percent of the world stance, the price for Microsoft’s entry-level population) accounted for 24.1 percent of In- operating system was US$5 per computer in ternet users but only 18.6 percent of Linux 1981 and $90 in 2002. Taking $600 as a PC’s users.3,4 Moreover, from 19985,6 to 2001, the average price, Microsoft’s entry-level operat- proportion of Linux users in developing ing system amounts to 15 percent of the PC’s economies grew more slowly than the propor- total cost. Although the operating system’s tion of Internet users (see Figure 1).3–6 Thus, cost decreases when manufacturers buy it in January/February 2004 IEEE SOFTWARE 75 Table 1 Macro- and microinfluences on choosing Linux in developing countries Factor Positive effects Negative effects Microeconomics: Ownership Slower obsolescence of basic infrastructure features Lack of supports to deal with security vulnerabilities. help reduce total cost of ownership. Effective use Amenability to modification makes localized Ordinary users can’t custom-configure the system. customization easier. Costs of supporting custom changes can escalate dramatically over time. Learning/switching Switching costs might be lower compared to Undertaking to use the full complexity of Linux utilities and source developed countries. code can lead to higher learning and switching costs. Linux communities provide supportive environments for transition. Compatibility Linux has high levels of compatibility and portability Likely to be incompatible with business partners’ technologies. for old and used hardware. Hardware-OS incompatibility if Linux device drivers are unavailable. Macroeconomics: Enforcement of Linux IP rules encompass both aggressive sharing Proprietary versions of Linux depend on IP laws. intellectual property laws of basic resources and support for business growth. National security Linux provides an easier basis for global sharing of Microsoft’s opening of codes increases Windows’ relative security infrastructure. attractiveness. bulk, it is still likely to be a significant pro- Electronics sells Linux-based desktops in India portion of a PC’s total cost. A cost comparison that are priced lower than brands using com- based on data from the Tech Zone (http:// mercial operating systems. The company says thetechnozone.com) indicates that although it lowered the cost by legally saving the license Mac OS X seems cheaper than Windows XP, cost of proprietary operating systems. upgrade costs over time make it twice as ex- Linux traditionally has a strong reputation pensive. Likewise, according to Internet among developers for its ability to continue Week’s 3 April 2000 issue, Linux is less ex- running under adverse circumstances, leading pensive than BSD/OS. to lower costs due to less downtime. Another Ironically, proprietary operating systems’ powerful distinguishing factor in downtime higher prices often aren’t a significant issue in costs is the relative prevalence of malicious developing countries because piracy of propri- software. According to the Symantec Corp. in etary software is so endemic. However, the an 18 September 2003 article in the Wall Street World Trade Organization’s Agreement on Journal, more than 4,000 viruses and other Trade-Related Aspects of Intellectual Property malicious codes were launched against Mi- Rights (TRIPS) requires developing countries to crosoft Windows during the first eight months provide adequate legal and enforcement tools of 2003, compared to 11 attacks against Unix to prevent such piracy. Enforcement will be and Linux combined for
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