Anyone in business should be familiar with an old truth: if you build your business so that it depends on a single supplier's product, that you can't get anywhere else, you don't actually have a business. Your business is effectively a non-voting subsidiary of your supplier. At the very least, you have a potentially catastrophic dependence. The supplier could choose, at any time, to
- stop making the product you depend on to suit their own strategy,
- raise its price,
- compete with you and take over your market,
- offer your competitors better terms on the product, or
- go out of business.
Any of these options would almost certainly kill your business.
Most of the governments and businesses of the world have made this fundamental error on a colossal scale - so big that they're blind to it, and fail to even acknowledge it, never mind take responsibility for such a gross failure of judgement.
They are dependent on the products and data formats owned, entirely, by the Microsoft Corporation. It would take the NZ government years to migrate from MS Office and the huge pile of applications - both "enterprise" and custom developed - that tightly integrate with it, to a non-Microsoft alternative. If MS Office - or MS Sharepoint, or MS Dynamics, or any one of dozens of MS applications which make up the Microsoft monoculture into which the NZ government are fully invested - suddenly succumbed to a "zero day" security flaw, for example, the entire NZ government would be completely dead in the water. The wheels of government would fall off - it would be catastrophic (at least for government, and its regulatory role). On a smaller scale, government decision makers have perpetrated similar strategic blunders with other suppliers like SAP, PeopleSoft, Oracle, Salesforce, and are rushing headlong into repeating those same errors at maximum scale with suppliers like Facebook, Apple, and Google.
As such, the governments and businesses of the world are, in effect, subsidiaries of the Microsoft Corporation. This compromises their sovereignty and ability to make the best decisions on behalf of their citizens.
This is not a hypothetical threat. Microsoft has, in the past, threatened to "stop selling Windows in South Korea (original article)", due to a anti-competition case against Microsoft regarding bundling of various technologies in Windows. South Korea, realising that it was totally dependent on Microsoft technologies, realised they couldn't afford to hold the US multinational to account, so they ceased their (well justified!) case against Microsoft.
Unbeknownst to most people, South Korea's ubiquitous "citizen electronic ID" program required for almost all citizen interaction with government, was built on proprietary Microsoft technologies (who remembers "ActiveX"?). Making it illegal for South Korea to buy MS Windows (while they were, for example, undertaking a full migration to open source alternatives, which is what they were actually doing...) would have effectively crippled the country's IT infrastructure and its citizen services.
All other governments are similarly vulnerable, even if only due to the ubiquity of Microsoft Word and Excel files used for official government and government-business interaction. So many systems are built with dependencies on these specific proprietary technologies that replacing them would bankrupt each country and most businesses in the world today.
In effect, in addition to paying them handsomely, we have given Microsoft the stick with which to beat us. And beat us they do - they tell us how much we're going to pay for "all of government" purchasing agreements. Our government officials brazenly trumpet "savings" for undertaking these pervasive deals, not ever acknowledging (and probably not even realising) that they are doing this at the expense and exclusion of every other software provider in the world (particularly ignoring the fact that they could be conducting the vast majority of government business using entirely gratis and libre software produced by the global open source community). These governments and businesses fail to recognise that each purchase of these proprietary products they make is broadening and deepening the proprietary hole they are in, as is each proprietary document, website, "knowledge management system", intranet, among other IT investments, they build on those technologies.
We cannot reverse the mistakes of the past (although we should make sure we stop praising those who made them), but we can restore balance going forward: by mandating the use of vendor-neutral, royalty free, open standards for all software procurement. In doing so, we would simply be applying the same prudence to software procurement that we do for procurement in almost every other industry. Having signed up for the D5 Charter, we'd be demonstrating that we've learned from the UK's sensible and bold example: they mandated open standards in 2014.