LinuxWorld: Canadian business “lags” in productivity and investment


Canadian business got yet another smack from analysts for lagging the U.S. in productivity and investment in new technology at the LinuxWorld and NetworkWorld Canada conference underway in Toronto this week.

James Sharp, vice-president of customer segments research at IDC Canada, made his case with a blitz of statistics. The Canadian economy may look healthy today, he said, but underlying weaknesses are obscured by recent hikes in the Canadian – U.S. dollar exchange rate. There is a systemic lack of innovation in Canada, he declared.

Investment by Canadian business in R&D is 64 per cent of the comparable U.S. figure. Labour productivity is just 75 per cent that of the U.S., and has been declining dramatically since 2000. If this continues, it will eventually lead to a lower standard of living, said Sharp. Reversing this slide will require greater investment in technology to make Canadian business grow faster, bigger, better.

The size of the Canadian IT market – comprised of hardware, software and services – is $39 billion, with the Big Five banks comprising about 50 per cent of the pie. In 2005, the financial services and telecommunications sectors were the only two to achieve a growth rate higher than the average of 4 per cent for last year, said Sharp, demonstrating the correlation between investment in IT and growth.

Based on IDC research, only 20 per cent of Canadian businesses have adopted Linux or other open source technology, and only a small number of the senior executives surveyed saw it as strategically important to their business. It is still largely perceived as suitable only for niche back-room applications, said Sharp.

Interestingly, although the majority of respondents cited cost avoidance as the number one reason to adopt open source, the perception that it is cheaper than proprietary software has decreased in recent years.

In another session, Jim Elliott, advocate for infrastructure solutions at IBM Canada Ltd. in Markham, Ont., said there are many misperceptions about open source in Canada. IDC’s 20 per cent open source uptake figure is probably accurate for “official” open source implementations – but this technology is in use far more than IDC’s respondents realize, he said.

Linux is everywhere, the IBM exec noted. Like many organizations, said Elliott, the province of Ontario’s official position is not to use open source for mission-critical applications – but Linux is nevertheless used in its security. “Many don’t realize that Nokia’s firewall, for example, is Linux-based.” He noted that even Microsoft Corp. offers open-source (the source code for .Net, for example, is published and is more open than Java).

Many are under the misapprehension that an open-source application built on proprietary software must be published but this is not true – it only needs to be published if an organization sells that application.

Indications of the lack of uptake of open source in Canada, particularly in the public sector, emerged in another session presented by Reuven Cohen, CTO of Enomaly Inc., an open source consultancy based in Toronto. Enomaly has been involved in about 100 open source implementations, but most of these projects were in the U.S. Although the company has made proposals for recent Canadian public sector content management solutions (CMS) put out for bid, proprietary CMS technology tends to win out, said Cohen.

Lack of expertise may be an issue, based on a case study presented by Cohen. Enomaly recently assisted in the implementation of an open-source CMS at the Dana-Farber/Harvard Cancer Center in Boston. Dana-Farber is not a physical organization, but a virtual amalgamation of five Boston hospitals and two Harvard schools involved in cancer research. The organization had outgrown its old CMS, and needed a new one that would allow 800 researchers and 20,000 support staff scattered across different locations to access and update vast quantities of information on the latest cancer research in an organic way.

According to Cohen, senior management at Dana-Farber deliberately sought an open-source CMS, largely to save on licensing costs for proprietary software, but also because the organization already had deep, in-house open source expertise, thanks to its ties to Linux-friendly Harvard University. Much of the development work on the CMS was done by Dana-Farber’s team. Enomaly’s role was in developing the technology strategy to facilitate that, selecting the right system (eZPublish), and documenting the system requirements in consultations with users.



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