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Microsoft is facing a growing battle against open-source software that is edging into politics on a global scale.

Just last week, the German government announced a deal to replace parts of its IT system with open-source programs, and Taiwan officials announced, as part of an effort to curb Microsoft's dominance in software, preliminary plans to promote the development of local Linux software.

Germany and Taiwan are only the latest countries to take sides in a software battle in which Microsoft and developers of commercial, or proprietary programs, are increasingly facing off with proponents of open-source software.

"We are seeing a lot of traction for Linux in the government sector, particularly in China," said Rajnish Arora, senior program manager of enterprise servers and workstations at market research company IDC in the Asia-Pacific. "There is also a lot of interest in Korea."

Most commercial software companies allow only their own programmers to make modifications to source code. Open-source software such as the Linux operating system is typically developed by programmers distributing source-code modifications freely over the Internet.

Open-source software has been installed on a major portion of servers hosting Web sites and e-mail accounts around the world. But open source is making slower inroads in the market for desktop PCs, where Microsoft and other U.S. vendors reign, according to IDC and other market research companies.

Allies Overseas

The perceived benefits of open-source software have moved government officials in countries including Germany, France, Finland, the Philippines, South Korea, and China to try out the technology. A decision to replace Microsoft's Windows at least in part with open-source alternatives is often the result.

Officials within these countries have identified open source as a potential driver for cost savings. Some say security is enhanced by embracing open-source software. Others have said use of open-source software could stem software piracy, and lead to growth of local software alternatives.

Industry insiders agree that government use of open-source software and Linux in particular is proliferating.

"Once you leave the shores of the U.S. the question would be not if but where is Linux being used" in government, said Matthew Szulik, chief executive officer of Linux software maker Red Hat. His company, in Raleigh, North Carolina, has been one of the beneficiaries of the Linux wave, as its version of the open-source operating system is used on more than half the Linux servers used today, according to IDC.

Less Money, Less Buggy

Though not all open-source software is free, for the most part it doesn't require customers to pay ongoing licensing fees or royalties, and typically costs less than software from the big commercial developers. By contrast, many users say that Microsoft's plans to move customers to an annual licensing scheme will drive software costs up.

In Norway, government representatives said they have looked into open-source software as a way to cut costs. "One thing is for sure: open source will be an issue," said Fred Arne Odegaard, assistant IT consultant with Norway's Department for Trade and Industry. "Contracts with Microsoft are getting more and more expensive."

The prospect of paying more for software has prompted changes in France, too. The country's head of IT systems at the Ministry of Culture, Bruno Mannoni, said the department has cut back on expenses since it began replacing 300 of its servers running Windows NT and Unix to open-source alternatives.

"It's working out to be a lot less expensive and a lot more reliable than what we used before," Mannoni said.

Acting Locally

Price aside, government officials around the world are also looking for ways to increase use of local software and curb the export of IT funds to major U.S. companies. That is the case in a number of countries in the Asia-Pacific region.

In Thailand and the Philippines, for instance, government-funded computer research centers have created their own open-source software applications that they are distributing to government users and small businesses. By offering essentially free operating system software for servers and desktops, they expect to make computer technology more accessible and aid the local economy in their countries.

"If I'm a country and I would like to be a world class supplier of software, I can use open-source software to bootstrap my expertise," said Dan Kusnetzky, vice president of systems research with IDC, based in Framingham, Massachusetts. "I can hand my experts world class software, give them the source code, and say go to work.

"It in essence removes 10 to 15 years of the growth cycle of a software development industry," he said.

Fostering Competition

Taiwan is an example where government officials have announced intentions to pursue open source over major commercial applications in part to rein in Microsoft and preserve room for competition within the local software industry.

"Microsoft has been dominating the market here in Taiwan and we don't want this type of development to continue," said Tan-Sun Chen, a member of the Legislative Yuan and co-chairman of the Technology and Information Committee, in an interview with IDG News Service.

Motivated by the Fair Trade Commission's investigation of Microsoft's pricing practices in Taiwan, legislators are seeking ways to curtail Microsoft's dominance of the market, Chen said. One of the suggestions put forth during a June 3 meeting of legislators and officials would see the Taiwanese government allocate funding for the development of open-source software, including Linux, he said.

Curbing Piracy

Software piracy has also played into the debate in countries where the use of illegal copies of software applications accounts for most of the software used by businesses and consumers.

"With open source (piracy) is not an issue at all," Kusnetzky said. "Under most of the recognized open-source software licenses it is perfectly acceptable to purchase a single copy of software and install it on any number of machines, or simply download it for free off the Internet."

Such behavior has become an international dilemma for commercial software vendors, according to the Business Software Alliance, a trade group which tracks software piracy rates around the world. BSA Statistics released Monday show that the commercial software industry lost nearly $11 billion to illegal software use in 2001.

In Perú, where software piracy rates are as high as 60 percent, members of Congress have proposed a bill that would require government agencies to use open source software whenever possible. One of the reasons given for the proposed legislation is to cut down on software piracy.