9.1 Economic argument for FLOSS

In this section I will use some simple calculations to show the cost of license fees for a country like Ethiopia. This is to show that even if the license fee in many cases are a small part of the Total Cost of Ownership (TCO) it is significant for a developing country. TCO is a measure that aspire to give an indication of what the cost of a program is through all its life span.

According to CIA World Factbook there were 75.000 Internet users in Ethiopia in 2003. According to a 2003 estimate (Encyclopedia Britannica) there lived over 65 million people in Ethiopia. This give a Internet users rate at 0.11% of the population.

The GDP/capita in Ethiopia is $800 according to World FactBook. At Amazon you have to pay $319.99 (5.sep 2005) for MS Office 2003 standard version. For MS Windows XP Home edition you have to pay $179.99. This means that an Ethiopian have to work 7.5 month of GDP/Capita without eating to buy the common MS Windows and MS Office combo. In Norway we have a GDP/capita of $40000, which means we have to work 0.15 month (4.5 days) for the same combo, without eating. For Windows 2003 server (5 client) cost $788.99 which becomes almost one year in GDP/capita.

Compared to buying a new PC which cost in the vicinity of $600 - $1200, the software is rather expensive. MS Windows is often included in the package when you buy a new PC. Because of deals Microsoft makes with PC manufactures, MS Windows is sold at a significant lower price. According to Ove Arntzen at Dell in Norway the price for Windows XP Home bundled with their PC’s is $50. This implies that the operating system constitute from 4% to 8% of the PC’ cost. If you include MS Office 2003 the proprietary software constitute from 62% to 21% of the PC’s cost. Considering that you have to have applications for the operating system and computer to be of any use, it is reasonable to compare the total price of the software running on the PC with the PC’s cost.

It is often difficult to buy PC’s without MS Windows because Microsoft have Original Equipment Manufacturer (OEM) agreements with many PC manufacturers. Manufacturers who assemble brand marked PC’s get a better deal on Microsoft licenses the more they choose to affiliate with Microsoft. The more PC’s with windows a manufacturer sell, the better deal the manufacturer get with Microsoft.

FLOSS licenses do not restrict how the software should be distributed and permits distributors to charge for the service of distribution. All the small computer shop I saw in Ethiopia sold pirate copies of proprietary software. If this shops were to get hold of good FLOSS software they could sell Cd’s with this software legally. A German organisation called Relevantive ( wwww.relevantive.de) visited Ethiopia in 2004 and planned to initiate an information centre for FLOSS ( http://www.relevantive.de/osic.html). This centre was going to give support, information and hand out Cd’s with FLOSS software. This project is currently stalled.