LinuxWorld – Canadian business lags in productivity and investment

Canadian business got yet another smack from analysts forlagging the US in productivity and investment in new technology atthe LinuxWorld and NetworkWorld Canada conference underway inToronto this week.

James Sharp, vice-president of customer segments research at IDCCanada, made his case with a blitz of statistics. The Canadianeconomy may look healthy today, he said, but underlying weaknessesare obscured by recent hikes in the Canadian – U.S. dollar exchangerate. There is a systemic lack of innovation in Canada, hedeclared.

Investment by Canadian business in R&D is 64 per cent of thecomparable U.S. figure. Labour productivity is just 75 per centthat of the U.S., and has been declining dramatically since 2000.If this continues, it will eventually lead to a lower standard ofliving, said Sharp. Reversing this slide will require greaterinvestment 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 bankscomprising about 50 per cent of the pie. In 2005, the financialservices and telecommunications sectors were the only two toachieve a growth rate higher than the average of 4 per cent forlast year, said Sharp, demonstrating the correlation betweeninvestment in IT and growth.

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

Interestingly, although the majority of respondents cited costavoidance as the number one reason to adopt open source, theperception that it is cheaper than proprietary software hasdecreased in recent years. In another session, Jim Elliott,advocate for infrastructure solutions at IBM Canada Ltd. inMarkham, Ont., said there are many misperceptions about open sourcein Canada. IDC’s 20 per cent open source uptake figure is probablyaccurate for “official” open source implementations – but thistechnology is in use far more than IDC’s respondents realize, hesaid.

Linux is everywhere, the IBM exec noted. Like manyorganizations, saud Elliott, the province of Ontario’s officialposition is not to use open source for mission-criticalapplications – but Linux is nevertheless used in its security.”Many don’t realize that Nokia’s firewall, for example, isLinux-based.” He noted that even Microsoft Corp. offers open-source(the source code for .Net, for example, is published and is moreopen than Java).

Many are under the misapprehension that an open-sourceapplication built on proprietary software must be published butthis is not true – it only needs to be published if an organizationsells that application. Indications of the lack of uptake of opensource in Canada, particularly in the public sector, emerged inanother session presented by Reuven Cohen, CTO of Enomaly Inc., anopen source consultancy based in Toronto. Enomaly has been involvedin about 100 open source implementations, but most of theseprojects were in the U.S. Although the company has made proposalsfor 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 studypresented by Cohen. Enomaly recently assisted in the implementationof an open-source content management system (CMS) at theDana-Farber/Harvard Cancer Center in Boston. Dana-Farber is not aphysical organization, but a virtual amalgamation of five Bostonhospitals and two Harvard schools involved in cancer research. Theorganization had outgrown its old CMS, and needed a new one thatwould allow 800 researchers and 20,000 support staff scatteredacross different locations to access and update vast quantities ofinformation on the latest cancer research in an organic way.

According to Cohen, senior management at Dana-Farberdeliberately sought an open-source CMS, largely to save onlicensing costs for proprietary software, but also because theorganization already had deep, in-house open source expertise,thanks to its ties to Linux-friendly Harvard University. Much ofthe development work on the CMS was done by Dana-Farber’s team.Enomaly’s role was in developing the technology strategy tofacilitate that, selecting the right system (eZPublish), anddocumenting the system requirements in consultations withusers.

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