Microsoft Indonesia (Beta 2)

Mistakes committed by Ignorance in a virtuous Disposition, would never be of such fatal Consequence to the Publick Weal, as the Practices of a Man whose Inclinations led him to be corrupt, and had great Abilities to manage, and multiply, and defend his Corruptions
~James Swift

The Indonesian government decided to go with Microsoft. That’s the gist of it. The MoU document goes the long way around to make sure that they’re not breaking various bits of laws here and there, but anyone reading the full document will get that very impression: the Nov 14, 2006 Memorandum of Understanding between the Government of the Republic of Indonesia (represented by the Ministry of Communication and Information Technology) and Microsoft Corp (PT Microsoft Indonesia) basically laid down the outline for a procurement and implementation plan of Microsoft platform/software across the entire government.

Much has been said about this – the open source arguments etc. – and many would point out the several obvious loopholes in the document (or inconsistencies, depending on which way you look at it). The linux herds are quick to cry the battle cry and the interested parties are similarly quick to respond with the merit of observing international copyright treaties and agreements.

My issue with this document – and the spirit it carries – are extensive and is probably worth detailing in separate points, but the first thing that came to mind is the blatant deception it carries in legal mumbos and – even greater – the bigger problems with copyright issues in third world countries in general. Again, I’ll try to handle this one at a time, and we best leave out the latter for later.

The MoU refers to IDC/World Bank/Intel surveys that estimated the number of PC (needing MS Windows) across the government at 35,496 plus additional 266,220 in the form of license grants. Additionally, they will also need 177,480 licenses for MS Office. While there’s no dollar value anywhere on the document, Tony Chen, the local MSFT President put the dollar value of Microsoft revenue loss to piracy in Indonesia at US$187m – so the estimate will be somewhere around that figure.

To put this figure in perspective, the entire Indonesian judicial system gets roughly just a little more than double that figure for their budget this year (they asked for more, but that’s how much they get in ‘06).

Reading the MoU and the subsequent comments from the officials close to the deal (the MoU includes confidentiality clauses, but we’ll get there), their repeated mantra here is always ‘be legal’ – as my lawful colleague pointed out, tragically enough this is an implicit recognition that they are, in fact, illegal.

Sure enough, the Gov’t is probably the largest institutional piracy in the country, but there’re little you could do about it where for so long, they barely had any real alternatives.

A few years back, Mr. Richard Kartawijaya was running Microsoft Indonesia and he was rumoured to be forced to resign amid the pressure from Redmond to push harder against piracy. Where Mr. Kartawijaya and Redmond clashed was on approach to take. Redmond wanted to push harder, Mr. Kartawijaya wanted a more sensitive approach.

In the end, Redmond took over, went on a litigious rampage and in the end, ended up blackmailing the government into this newly signed MoU. Everybody has their take on it, but reading the document, it looks too much like a purchase order to be considered for any other purpose.

The government basically agreed to have everything running on MS Windows. The exact number will be based on further census, but it encompass everything in the government with the exception of State owned enterprise and gov’t run schools.

The license grant is only applicable for computers running NOT higher than Pentium 3. I’m not sure why this is here, but I think it has a lot to do with the fact that the grant only covers Windows up to Windows XP – they’re not giving the new Vista/Office 2007. In effect, Microsoft is giving away their software as it is being phased out.

The Government makes repeated assurances and commitments to educate and promote awareness of intellectual property rights across the board and any breaches of the agreement (in plain terms, for the gov’t to continue using pirated MS software somewhere), will void the whole licensing deal. Basically, the Government made assurance to purchase, then made sure that everybody within the government will continue to purchase in the future.

If this isn’t enough, the document also outlined certain ‘flagship projects’ among others, implementation of National Single Window project using Infopath across the national government.

All this, and the MoU includes a specific confidentiality clause where during the course of the agreement, both parties must maintain confidentiality. Furthermore, neither parties are supposed to do any press releases or other public notifications.

While this comes along with a qualifier (to the extent required by applicable law), it does bring the question, why?

The documents are full with funny workarounds to make sure they comply with at a glance review of the literal law, but at the same time, consistently maintaining that it will lead to a purchase in the future. One clause would explicitly say that the MoU is nonbinding and gives no legal claims to neither parties, but at the same time – in fact the very next article – maintains that it will continue to be in force until the date of execution and this needs to be done before March 31, 2007 (the appendix also sets out payment schedule to be no later than June, 2007).

It maintains that the procurement will be done according to the law and will involve a tender process – this is supposedly to be done as Microsoft will provide the Government with the names of its approved vendors to participate in the tender.

When the products and the quantity and the payment terms are so clearly laid out, it begs the question, what exactly will be tendered in this future tender?

The way it looks to me, this is precisely the muddy water that multinationals regularly ventured into where they do more damage than they’re assumed goodness. Don’t get me wrong, I’m not making an argument against multinationals, but a government, is the Government: it has responsibility and accountability to the public for its decision and the use of the taxpayers money.

When it was obvious that everyone from Bill Gates to George Bush to the World Bank were getting busy in this intellectual orgy, in the end the Government looks very meek and –even reluctantly- submissive.

Ultimately, embarrassing.

Many people close to the deal reflected that this is in a effect an official stonewalling on the Government side as they still need to get budgets etc, and Microsoft is supposedly not very high on their priority list.

For Microsoft this might represent another big account in their fat pocket. Even the police these days are getting busy going around offices in the CBD checking for pirated software, again, it does beg the question if our limited law enforcement resources are not better spent elsewhere?

For many people within the open source movement, this paints their perfect picture of what happened when you stared into the abyss. Only this time, more and more people will be looking along with them, because, well, it’s harder not to notice when the abyss stared back into you.


PS: I don't have a soft copy of the MoU but if anybody needs it, leave comment here or drop mail. I might be persuaded to scan it and post it here if you're nice.