DiDio: Lack of Indemnification Impacts Total Cost of Ownership

Saturday, January 03 2004 @ 02:02 PM EST

Contributed by: PJ

Well. Finally.

Laura DiDio says something that clarifies a subject remarkably. I believe she has just told us why the other side of the table sings the indemnification song: it's so they can claim that the total cost of ownership for Linux is actually higher than for Microsoft products. And they can sing it whether or not indemnification is in place, it seems. Ms. DiDio just did.

Take a look at this article, which is all about governments around the world switching to OpenOffice, including the government of Israel recently, but then DiDio steps in with her pearls of wisdom.

"'A couple of departments in Massachusetts state agencies have said they want to go open source too,' Yankee Group analyst Laura Didio told internetnews.com. 'With government organizations they have to tender within the confines of approved vendor lists for RFP's and they usually have to go with the lowest price so its not surprising that if you're just talking price that open source is going to have a great deal of appeal.'

"Didio is quick to point out however that few organizations appear to look at the true total cost of ownership of open source solutions, specifically as it relates to indemnification (from the SCO Group lawsuit principally). She asserts that many governments need to have some sort of indemnification and that it's a large issue that needs to be recognized."
Ah, the total cost of ownership. Who else has been singing that song, hmm? So that appears to be the game, folks. Can it be this simple? Bring a loathesome lawsuit and then claim Linux costs more because of legal perils from a lack of indemnification? I thought the game was to force it to happen, but I note she doesn't even mention the HP indemnification against SCO lawsuits or the Red Hat litigation fund, perhaps because neither costs you anything. How do they sleep at night?

Even Ms. DiDio, however, is dimly starting to realize that there may be more to choosing Linux than price:

"According to Didio, the price differential of open source solutions such as Openoffice.org is not the only reason why governments are making noise about open source. She believes that it's also about leverage and competition.

"'I think that the competition that open source has brought to the table has been good because it has forced Microsoft to respond and give its customers better terms and conditions and that's healthy', Didio said. 'It gives customers more leverage.'

"In the case of governments, open standards may potentially be viewed as a necessary form of democratic pluralism themselves.

"'Should governments be using a format that is unique to a particular vendor to talk to its citizens?' noted Linux Guru and author of the Open Source Definition Bruce Perens asks. 'The government should not be saying you can only drive up to a government office in a particular brand of car. In the same sense the government should not be saying you can only talk to your government if you have Microsoft Windows software on your computer.'"

Somebody better mention Perens' thought to the government in the UK, from what I hear. A Groklaw reader in England is worrying that soon new regulations there will compel paying taxes online and to do it, as far as he can see, you will pretty much have to have a Windows computer. He writes:

"The UK government is introducing 'E-filing' for all employers tax returns - see www.ir.gov.uk/employers/onlineindex.htm It is optional at the moment but for large companies it will become compulsory and they won't be allowed to file paper ones from May 2005. The larger employers have to file monthly returns which will have to be online from May 2004 so in fact that is when it will effectively be compulsory.

"There is a sort of sliding timescale for medium companies up to 249 employees it has to be by May 2006 and then all companies will have to file all returns online by 2008.

"The difficulty with this is that to make filings, you have to have an account with the 'Government Gateway'. In order to have an account with the Government Gateway you have to use a security routine which has been implemented by Microsoft and which deviates from the specification previously published by the Government. The security routine 'GGSec' only runs on Windows (and now they're withdrawing support from W98 etc as you reported) that means Windows XP."

Here is what the government site has to say about using the "right" software:

"Using the right software to do your online filing

"Inland Revenue Quality Standard

"You must make sure that the computer software you use to file online is capable of sending your data electronically, and that, from April 2005, it meets the Inland Revenue Quality Standard. This is a quality check on the useability of the information you send us. Software that meets our Quality Standard checks that you have the right entries, and that they are in the right boxes and all add up. Your software supplier will be able to tell you if your software meets the Quality Standard.

"End of year returns filed online that do not meet the Quality Standard will be rejected by our computer (you will get an error message telling you why). You will need to put the error right before trying to file again. Otherwise your return will still get rejected and you will run the risk of missing the filing deadline. If you miss it, you may be charged a penalty. So the earlier you file online, the better.If you carry on using magnetic media until you start online filing, you will still need to meet the Quality Standard.

"Inland Revenue Payroll Standard

"The Inland Revenue Payroll Standard is awarded to software that has passed our tests. It tells you that the software product you are choosing to do your online filing has all the essential features you need to calculate PAYE and National Insurance contributions due from your employees. Software products that meet the Payroll Standard are capable of sending data over the Internet, and contain much more than the initial checks that the Quality Standard meets. If software meets the Payroll Standard, it says so on the box. Or your software supplier will be able to tell you. See a list of software products that meet the Payroll Standard.

From April 2004, software that meets the Payroll Standard will have been tested to make sure that it also meets the Inland Revenue Quality Standard."

Here is a list of software that has been blessed to use. The Electronic Business Payroll Standards page is here. Their page for what they call their Electronic Payroll Accreditation Scheme (does 'scheme' means something different in the UK than in the US?) is here and says:

"An important stage of the evaluation process, is a check to establish if the payroll product is capable of exchanging electronically those forms that IR is able to support by Internet or Electronic Data Interchange (EDI) using Value Added Networks (VANS). This electronic exchange criteria supports the ongoing Inland Revenue Electronic Exchange Certification Scheme which has been designed to help software vendors develop electronic interface structures which meet the requirements needed by IR for sending PAYE forms by EDI.

"The Payroll Standard requires the payroll product to have the capability to exchange electronically end of year data on forms P14 and P35 (although in the future the Payroll Standard may be extended to include other PAYE forms) and be capable of arranging for the payment of the amounts owing to the Collector of Taxes by electronic methods. Only payroll products that have had their internet submissions approved by IR or have the Electronic Exchange Certification for EDI submissions for P14 will meet the electronic exchange requirement of the Payroll Standard."

If you click on the Scheme link above, there are some PDFs explaining their process for software developers. They have an email address to contact in one of the PDFs, helpdesk at ir-efile.gov.uk but when I tried to reach them, I was unable to do so. I have a Groklaw reader in UK trying to reach them and will let you know what I find out. Meanwhile, if any of you have more information, I would be interested to know if this is as it appears or if there is a workaround so that Linux users can pay their taxes without having to buy a different operating system they chose not to own in the first place.

UPDATE: Dr. Stupid has already found this encouraging news:

"This link explains some of the background:

"It's not pretty, but there is some light at the end of the tunnel:

'Other browsers (running under Windows, Unix or Linux) can provide the required SSL connectivity but the ability to manage certificates on open source platforms needs investigating. The Office of the e-Envoy will be funding some activity by the open source community to address this issue.

'The security model described above meets the design objectives and if alternatives are proposed they will also be considered.'"