Is open source ready for big business?

Eleven companies will be offered a slot on the government's Open Source Enterprise Software and Services panel, which comprises CSC, Dell, Fujitsu, Hewlett-Packard, IBM, Novell, Red Hat, Sol1, Starcom Group, Sun Microsystems and System Integration Services International.

According to figures released last July by the Statistics Bureau, the state's operating expenses for software stood at AU$73 million.

A spokesperson for Commerce Minister John Della Bosca said the list is not set in stone and is subject to "final negotiations". "[But] it would be unusual for any company to come off the list ... unless the department isn't happy with them," Andrew Plumley told ZDNet Australia . No indication was provided as to when final confirmation would be given.

At this stage, it seems highly likely that the panel will stay as is. So, what does this announcement really mean? Well, the answer would depend on who's asking.

To open-source software vendors, its community of developers and band of enthusiasts, this is a major coup. After struggling to make an impact in the corporate and government arenas, the recognition is second to none. At long last, an opportunity to play with the big boys.

For companies like IBM and HP, the announcement will be more than welcomed. For years, both companies have ploughed a considerable amount of investment into marketing Linux -- the products and the ideology. Now, it's payback time -- at least there's light at the end of the revenue tunnel (hopefully).

At Microsoft, there will be two camps. One side will be jittery and in full panic mode while the other, it will be business as usual. There's nothing strange about the latter group of people -- one simply has to understand the psyche of this camp. This group only cares about one thing -- desktop sales. From a commercial perspective, this space is still very much dominated by Microsoft so an alternative software panel is seen as a mere blip.

Despite the nonchalance of some at Microsoft, Della Bosca has high hopes for the initiative."Establishing an accredited panel of companies that have already demonstrated their expertise and capability to the government has many advantages," he said.

This means agencies can avoid the "time-consuming and expensive process of running an open tender" each time they require open-source software and services, he added.

It's still unclear how significant a part the panel will play in the government procurement process. Della Bosca himself clearly stated that the agencies will "continue to assess their own needs and choose the best option for a particular application."

I believe healthy competition is a good thing so this is a decent start. But the fight continues for open-source software vendors ... and it will be interesting to see how their lobbying muscles fare against Microsoft.

Do you think this panel will have a huge impact on Microsoft's business? Send your thoughts to edit@zdnet.com.au or use the talkback feature below.

Fran Foo is ZDNet Australia managing editor.