Moving To Open Source: How A Hypothetical City Could Save On Costs And Grow Their Economy

Today I want to do a little exploration. A hypothetical exploration.

This article will explore the quantifiable results from a transition to open source for the municipal departments of a hypothetical city. I have contrived a hypothetical family, and a hypothetical main character and have gathered together some numbers that impact their lives.

Why Cities Are Important, Why They Should Use Open Source Software, And Can I Convince With Numbers

Before we start, and also for those readers who are impatient to discover where all this might lead to, let me explain my interest in cities, and what role open source software might play.

A city is important because it is at this level of government where the most interaction between government and the citizen takes place. It is where you go to have your newborn child registered, where passports and IDs are issued. It is at this level that you get your energy and water, where logistics for delivery of goods is managed. National government is far away, provincial government is mostly silent, but the municipality is near, and at the centre of it is the city. And it has been so for 6000 years.

I think that cities are the most influential of the layers of government, and the most important place where citizens can be heard. But many systems in use by government contain components that are kept secret for trade reasons, because they belong to what we call proprietary software -- software built by private companies.

This software serves a purpose within the public body such as a city, but contains machinations that are not open to the public. So it seems to me that governments should be moving towards including more open source systems in their solutions.

But this is an arduous task. For many, many reasons, some of which are quite obvious. Legacy systems, entrenched values, cost of transitioning, security issues, perceived or otherwise, the list goes on.

I thought that maybe, just maybe, I could convince with numbers. As it turns out, the direct savings from using open source software as opposed to proprietary is not as appealing as I hoped it would be. But together with the spinoff advantages, these small savings can lead to real improvements within the city, and as a consequence to the lives of the citizens.

So I hope you will come with me on this virtual exploration, at the end of which, as I have just revealed, there is no pot of gold.

Hypotheticals

This exploration of hypotheticals actually involves four interconnected policies: 1) to move software solutions to open source, 2) mandate that implementation and maintenance of the open source solutions are are allocated to local small or medium-sized businesses, 3) that the savings be reinvested for the public good, and also, 4), that the implementation of these reinvestments be allocated to local businesses.

To illustrate our little exploration I have devised a persona, which will help us empathise somewhat with the population of our hypothetical city.

This hypothetical city is located somewhere in the EU, and, having a population of about 250,000, it is of average size.

The main character is Alex, 34 years of age, a freelance graphic designer, in a modest apartment near the centre of our hypothetical city. We will be looking at the numbers surrounding Alex's life, and of the family surrounding Alex in the cover image.

Let's first look at the machinery of the city Alex lives in, as in which incoming and outgoing processes make their life possible. The concept of "city as a machine" might need a little more explanation, so here it is:

The concept of the "city as a machine" envisions an urban area as a complex system of interconnected processes and infrastructures designed to sustain the lives of its residents.

Like a machine, a city requires inputs—such as energy, water, food, and resources—and produces outputs like waste, goods, and services.

Incoming and Outgoing Processes Impacting Alex in a Day

Incoming Processes:

1. Natural Resources:

- Energy Production: Electricity for powering Alex's home, computer, and other devices.

- Water Supply: For personal use (drinking, cooking, and cleaning).

2. Goods:

- Retail: Delivery of graphic design tools, supplies, or personal purchases.

- Distribution: Groceries or essentials bought online or in stores.

3. Food Supply:

- Markets: Fresh groceries or packaged foods bought in the morning.

- Restaurants: Occasional takeout or dining out for lunch or dinner.

4. Transportation:

- Public transportation for commuting to client meetings.

- Bike-sharing service for short-distance travel.

5. Communication:

- Internet and mobile services to communicate with clients and deliver work.

- Public messaging (e.g., news updates or weather alerts via apps).

6. Education:

- Online courses or webinars to improve professional knowledge.

Outgoing Processes:

1. Transportation:

- Personal movement through the city (walking, biking, or using public transport).

2. Waste Management:

- Recycling of packaging from deliveries.

- Household waste disposal.

3. Energy Consumption:

- Use of electricity and heating in the apartment.

4. Communication:

- Delivering graphic design work to clients via email or cloud services.

- Participating in local online forums or professional networks.

5. Housing:

- Payment of rent and participation in maintenance services (e.g., plumbing issues or repairs).

6. Health Services:

- Routine exercise (using public park facilities or gym membership).

- Occasional doctor’s visits or pharmacy use.

All processes listed above are managed in some way. City departments play a huge role here. Let's see which city departments are involved in making life for Alex possible.

Municipal Departments Associated With The Incoming And Outgoing Processes That Impact Alex

Incoming Processes

1. Energy Production:

- Department of Utilities: Manages electricity and gas supply.

- Sustainability Office: Promotes renewable energy initiatives.

2. Water Supply:

- Water and Sewerage Authority: Provides clean water and handles wastewater.

3. Retail and Distribution:

- Department of Economic Development: Supports local businesses and logistics networks.

4. Markets and Restaurants:

- Food Safety and Standards Authority: Regulates food hygiene and safety.

- Market Development Department: Manages public markets.

5. Public Transportation and Bike Sharing:

- Public Transit Authority: Oversees bus, metro, and other transit systems.

- Department of Transportation and Mobility: Manages bike-sharing programs and pedestrian-friendly infrastructure.

6. Internet Services:

- Office of Digital Services: Facilitates public internet access and digital infrastructure.

7. Online Courses and Public Messaging:

- Department of Education: Provides educational resources and online learning programs.

- Public Communication Office: Disseminates public alerts and messages.

Outgoing Processes

1. Personal Movement:

- Department of Transportation and Mobility: Develops walkways, bike paths, and road safety.

2. Recycling and Household Waste:

- Waste Management Authority: Oversees recycling programs, garbage collection, and waste processing.

3. Electricity Usage:

- Department of Utilities: Tracks and supports residential energy usage.

4. Work Communication:

- Office of Digital Services: Supports reliable communication infrastructure.

5. Rent Payment:

- Housing Authority: Oversees residential regulations and rent-related services.

6. Health Activities and Doctor Visits:

- Public Health Department: Manages public health facilities and wellness programs.

- Parks and Recreation Department: Provides fitness spaces and exercise facilities.

Let's now estimate what this means for Alex's wallet. To estimate the costs incurred by the city in enabling Alex's life, we need to calculate the operational costs for various departments associated with Alex’s incoming and outgoing processes.

Cost Factors for Alex's Life

Utilities (Energy and Water):

Energy: Average annual cost per resident: €200 for grid maintenance and €500 for energy subsidies. Alex's share: ~€700/year.

Water Supply: Average annual cost per resident: €300 for water supply and wastewater management. Alex's share: €300/year.

Transportation (Public Transit and Bike Sharing):

Public Transit: Annual city cost per resident: €500 for bus/metro operations and subsidies. Alex’s share: €500/year.

Bike Sharing: Annual cost per active user: €200 for system maintenance and support. Alex’s share: €200/year.

Waste Management:

Average annual cost per resident: €150 for rubbish collection and €100 for recycling programs. Alex’s share: €250/year.

Food Safety and Markets:

Average annual cost per resident: €50 for market regulation and food safety inspections. Alex's share: €50/year.

Health Services:

Annual cost per resident: €1,200 (public health funding, clinics, emergency services). Alex's share: €1,200/year.

Digital Services (Internet, Public Messaging):

Cost per user for city digital infrastructure: €100/year (city-wide internet and messaging platforms). Alex's share: €100/year.

Housing:

City’s annual subsidy/infrastructure cost per resident: €200 for residential infrastructure upkeep and public housing programs. Alex's share: €200/year.

Education (Online Courses):

Annual city funding per resident: €50 for public education and digital learning platforms. Alex's share: €50/year.

All this costs Alex about €3,550/year.

Which Software Platforms Are Associated With Each Department?

City departments, like many organisations, use software solutions to help with managing their work.

Now let's see which software platforms are associated with each department. We will be naming the most-used software solutions used within the EU for larger-scale organisations such as municipalities. Most are proprietary systems.

Incoming Processes

1. Department of Utilities (Energy Production, Electricity Usage):

- SIEMENS Spectrum Power: For energy grid management.

- Enoro CIS: For customer information and billing in EU utilities.

- Eandis Netbeheer (Belgium): For integrated energy network operations.

2. Water and Sewerage Authority (Water Supply):

- Aquis: For water distribution modeling and optimization.

- ESRI ArcGIS for Water Utilities: For GIS-based mapping and analysis.

- Sensus Analytics: For water meter management.

3. Department of Economic Development (Retail and Distribution):

- GovTech (EU initiatives): For promoting digital innovation in the economy.

- SAP Business One: For tracking economic projects and partnerships.

- CiviCRM: For community engagement in economic programs.

4. Food Safety and Standards Authority (Markets and Restaurants):

- TRACES (Trade Control and Expert System): For monitoring food safety and trade across EU borders.

- Odoo: For market and vendor management in European cities.

- QGIS: For mapping public markets and food vendors.

5. Market Development Department:

- Decidim: For managing public engagement in market-related projects.

- Asana: For coordinating local vendor activities.

- OpenCities: For public vendor permits and operations.

6. Public Transit Authority (Public Transportation):

- PTV Visum: For public transportation planning and analysis.

- Optibus: For scheduling and optimizing bus routes in EU cities.

- Mobility as a Service (MaaS) platforms: For integrating multi-modal transport options.

7. Department of Transportation and Mobility (Bike Sharing):

- NextBike: A European standard for bike-sharing system management.

- Bikeshare+ by PBSC: For integrated bike-sharing programs.

- GIS Mapping Tools: For bike lane planning and optimization.

8. Office of Digital Services (Internet Services, Work Communication):

- Atos: For digital infrastructure in European cities.

- Microsoft 365 (EU data centers): For secure communication tools compliant with GDPR.

- Drupal: For public-facing digital services and portals.

9. Department of Education (Online Courses):

- Edunext: An EU-based learning management system.

- OpenEduCat: An open-source platform for education services.

- BigBlueButton: For virtual classrooms and online training.

10. Public Communication Office:

- GovDelivery Europe: For public messaging services tailored to EU standards.

- Ecanvasser: For public engagement and communication.

- Typo3 CMS: For managing city websites and public announcements.

Outgoing Processes

1. Department of Transportation and Mobility (Personal Movement):

- Citymapper: For managing multimodal transport analytics.

- SUMO (Simulation of Urban Mobility): For detailed transport simulations in European cities.

- HERE Maps: For mobility and traffic flow analysis.

2. Waste Management Authority (Recycling, Household Waste):

- Bartec Auto ID: Used across EU cities for waste collection optimization.

- RecycFleet: For fleet and recycling process management.

- Recycleye: AI for sorting and optimizing recycling.

3. Parks and Recreation Department (Health Activities):

- QField for QGIS: For managing green spaces and park assets.

- Campayn: For managing public activity events.

- Open Playground Management System (OPMS): For scheduling park activities.

4. Housing Authority (Rent Payment):

- Planon: Widely used in EU for property and facility management.

- Siemens Desigo: For smart building management in housing complexes.

- LocaNova: For housing regulations and digital rent payment systems.

5. Public Health Department (Doctor Visits):

- PatientSky: A Nordic healthcare IT solution expanding into the EU.

- Doctolib: A widely used EU platform for managing healthcare appointments.

- EHR4CR (Electronic Health Records for Clinical Research): Complies with EU health data standards.

6. Public Health Department (Public Messaging):

- Everbridge (EU localized): For emergency alerts and notifications.

- Alert4All: Developed for EU-wide crisis communication.

- GovTech Digital Engagement Platforms: For public health awareness.

This is a big list, so we expect a big cost. And that is indeed so. Look at this table, where I try to capture the costs involved with each department's software solution. Keep in mind though, that these are estimates, and estimates for our hypothetical city.

Open Source Alternatives For Software Solutions In Use By City Departments

We will look at the table listing the software platforms generally in use again, but now for their open source alternative, and their costs.

That's great, but this is no more than an illustration that tells us that proprietary is more expensive than open source. We knew that. Let's create a breakdown of how the costs change when using open source solutions as opposed to proprietary solutions, and then per year.

Some examples:

What Proprietary vs Open Source Means For Alex’s Life

1. Utilities (Energy and Water)

• Proprietary: Licensing and operational software like SIEMENS Spectrum Power and Aquis cost cities €1 million–€2 million/year. Maintenance fees are from €300,000–€500,000/year. Alex's share: €30–€50/year.
• Open Source: Platforms like OpenUtilities and EPANET reduce licensing fees to €0. Customization and training costs are one-time expenses (~€500,000). Maintenance fees: €100,000/year (in-house teams or contractors). Alex's share: €10–€15/year.

2. Transportation (Public Transit and Bike Sharing)

• Proprietary: Transit management systems like PTV Visum cost €2 million–€5 million/year. e PBSC Urban Solutions cost an additional €1 million/year.Alex's share: €28–€40/year.
• Open Source:Open solutions like OpenTripPlanner and NextBike+ have no licensing costs.Customization and setup: €1 million (one-time).Maintenance fees: €300,000/year.Alex's share: €15–€20/year.

3. Waste Management

• Proprietary: Systems like Rubicon or Bartec Auto ID cost €2 million/year for fleet management and optimisation. Alex's share: €8–€10/year.
• Open Source: Open solutions like Recycleye cost €0 in licensing but require initial customization (~€500,000). Maintenance fees: €100,000/year. Alex's share: €4–€5/year.

4. Health Services

• Proprietary: Systems like Cerner or Doctolib cost cities €5 million–€10 million/year. Alex's share: €20–€40/year.
• Open Source: Open platforms like OpenMRS are free to use but require initial setup (€1 million) and yearly support (€500,000). Alex's share: €10–€15/year.

5. Digital Services

• Proprietary: Platforms like Microsoft SharePoint or GovDelivery Europe cost €1 million–€2 million/year. Alex's share: €4–€8/year.
• Open Source: Open platforms like Drupal or Typo3 CMS eliminate licensing costs but require one-time customisation (~€300,000) and yearly support (€100,000). Alex's share: €1–€3/year.

6. Education (Online Courses)

• Proprietary: Systems like Blackboard cost €1 million/year. Alex's share: €4/year.
• Open Source: Platforms like Moodle are free, with one-time customisation (€200,000) and annual maintenance (€50,000). Alex's share: €1–€2/year.

7. Housing

• Proprietary: Systems like Yardi cost €2 million/year. Alex's share: €8/year.
• Open Source: Open platforms like OpenProperty cost €0 in licensing but require setup (€500,000) and support (€200,000/year). Alex's share: €3–€4/year.

Key Assumptions

This brings us to the totals which we will use as our key assumptions in the calculations that follow

1. Total Costs:

- Proprietary Solutions: €110–188 million annually.

- Open-Source Solutions: €50–78 million annually.

2. Tax Revenue Per Resident:

- The city's costs are evenly distributed among residents (taxes cover the costs).

3. Alex's Tax Contribution:

- Alex's share is proportional to their tax contribution.

Now, you might ask, why is the Total Annual Costs for Alex’s Life we calculated earlier much higher than the taxes paid by Alex. The answer is that the Total Annual Costs for Alex's Life is much higher than the taxes Alex pays because municipal services and infrastructure costs are funded through multiple revenue streams, not just individual taxes.

• The total annual costs for Alex’s life (€3,550/year) reflects all services that enable Alex’s day-to-day life, including taxes and personal payments for city services.
• The taxes Alex pays (approx. €760/year under proprietary solutions or approx. €298/year under open-source solutions) only covers the portion of those costs directly collected as municipal taxes. This excludes such costs as health insurance because health insurance is not a city matter.

Even so, saving a couple of hundred euros a year if the city goes open source is not going to make much of a difference in Alex's life. But there are other considerations, and again, considerations that do not involve invoking concepts of open government, but pure numbers.

Other Policies

As stated in the introduction, next to the transition to open source, there are other policies that should be implemented at the same time.

Number one is reinvestment of the savings into public services, and, equally important, allocating services to local companies instead of multinationals.

One word about the last remark. Using proprietary software solutions most always means that customisations and maintenance are done by the software vendor themselves, and of course billed accordingly. But when the move to open source solutions is made, the option opens up to have such work done by others, be it a local in-house team, or by a company of your choice.

This means that a city can allocate such work to a local company, and in so doing, helping their local economy instead of some country or region far away.

So, both the companies involved in servicing for the open source solutions and the companies involved in implementing the reinvestments should be local. That should create a spinoff advantage so that a modest reinvestment would have quite a large impact on the city's economy as a whole.

Tax Deduction

What we are also going to do is give the citizens a tax deduction from the savings. This will help with awareness, and the trust that we are all on the same side.

Given That The City Could Save 50 Million A Year, What Kind Of Things Beneficial To All Citizens They Could Do?

Before we start, I would like to introduce Alex's family.

Alex (34 years old):

• Occupation: Freelance Graphic Designer.
• Financial Situation: Moderate income, dependent on affordable public services.
• Health: Healthy but values mental health support and accessible fitness facilities.

Jordan (36 years old, partner):

• Occupation: Public Transport Driver.
• Financial Situation: Stable income but affected by inflation and housing costs.
• Health: Suffers from occasional back pain, requiring physiotherapy.

Sam (5 years old, child):

• Occupation: Student.
• Financial Situation: Dependent on public education and extracurricular activities.
• Health: Healthy but benefits from green spaces and clean air.

Alex’s Parent, Taylor (67 years old):

• Occupation: Retired.
• Financial Situation: Low pension, reliant on subsidies for housing and healthcare.
• Health: Diabetic, requiring regular medical checkups and affordable medication.

Alex’s Cousin, Riley (28 years old):

• Occupation: Part-time Delivery Worker.
• Financial Situation: Low and unstable income, reliant on affordable public housing.
• Health: Healthy but faces stress from financial instability.

Improved City Facilities Would Have A Positive Impact On The Lives Of Alex And Their Family

Now let's look at what the city could do with the savings from moving to open source. We will look at the specific numbers later. Just a couple of examples. With the savings, our hypothetical city could initiate:

1. Infrastructure and Mobility

• Improved Public Transport which could benefit Jordan with better equipment and facilities for work, and would make commuting cheaper for Riley.
• Bike Infrastructure benefits Alex and Sam by improving cycling safety and reduced commuting costs.

2. Housing and Community Development

• With Affordable Housing, Riley gains access to subsidised housing, reducing financial stress, and Taylor also benefits from energy-efficient public housing, lowering utility bills.

3. Health and Wellbeing

• If Universal Access to Healthcare were to become attainable Taylor would benefit from expanded diabetic care and affordable medication, and Jordan could access affordable physiotherapy.
• Healthy Living Initiatives: Alex and Sam benefit from free outdoor fitness options.

4. Education and Innovation

• Digital Access: Sam benefits from free online learning tools and digital resources at school. Riley can use public Wi-Fi for job applications and learning new skills.

5. Environment and Sustainability

• More Urban Forests: Alex and Sam benefit from improved air quality and green spaces for recreation. Taylor experiences fewer respiratory issues due to better air quality.

6. Social Equity

• Support for Vulnerable Populations: Riley receives financial assistance for job training programs. Taylor benefits from subsidies for eldercare services.

7. Cultural and Recreational Opportunities

• More Free Cultural Events: Alex, Sam, and Taylor enjoy free community events.
• Sports and Leisure: Sam benefits from improved access to sports facilities, enhancing extracurricular activities.

Impact of City Reinvestment on Alex's Family

• Total Financial Impact: Approximately €5,200/year in combined savings.
• Health Impact: Improved access to services, reduced stress, and better overall well-being for all members.

Do I need to remind you that this is all hypothetical? The numbers might make it look real, and the family might remind you of a family you know. The numbers ARE real, even if the policy is hypothetical.

But let's continue on our little exploration of maybes.

The Relationship Between Savings, Costs Associated With Moving To Open Source, And Spinoff Advantages

We need a detailed breakdown to help us understand what the relationship is between the savings, the costs associated with moving to open source, the spinoff advantages for local companies doing implementations and maintenance of the open source solutions, and the spinoff from the companies implementing the reinvestments.

As stated earlier, the assumption is that 50% of the savings go back to the citizens as a tax reduction. This leaves us with the following calculation:

1. Total Savings from Open Source Adoption

• €50 million per year is saved by switching from proprietary to open-source solutions.
• These savings are allocated into two categories: 50% (€25 million): Reinvested into municipal improvement projects. 50% (€25 million): Returned to citizens as tax reductions.

2. Costs Associated with Moving to Open Source

One-Time Implementation Costs

• Total: €50 million, spread over 5 years. Annual cost: €10 million. These costs include: Migrating to open-source, and training municipal staff. Integrating systems with existing infrastructure.
• Allocation to Local SMEs: 80% of these costs (€8 million annually) are allocated to local companies.

Annual Maintenance Costs

• Calculated at 5% of one-time costs: €2.5 million annually.
• These costs include: Updates, bug fixes, and support for open-source systems. Continuous improvements and scaling of the solutions.
• Allocation to Local SMEs: 80% of these costs (€2 million annually) are allocated to local companies.

3. Reinvestment into Municipal Improvement Projects

Allocation of €25 Million Savings

• This 50% portion funds annual improvement plans, which include: Infrastructure upgrades, housing projects, healthcare access, green initiatives, and more.
• Breakdown: €12.32 million goes directly to improvement initiatives. Remaining funds include open-source costs spread across categories. Examples of categories are citywide internet connectivity enhancements, smart energy monitoring systems to reduce waste, real-time data systems for better crisis response, or funding open platforms for managing cultural events and community engagement.

Spinoff Advantages from Reinvestment

• Local SME Involvement: 80% of these improvement costs are spent on local companies for design, construction, and maintenance.
• Economic Multiplier Effect: Every €1 spent locally generates €1.50–€2.00 in total economic impact.

4. Spinoff Advantages

Spinoff from Open Source Implementation and Maintenance

• Annual SME allocation: €8 million (implementation) + €2 million (maintenance) = €10 million.
• Total Economic Impact: Low estimate (multiplier 1.5): €15 million. High estimate (multiplier 2.0): €20 million.

Spinoff from Reinvestment Implementation

• Annual reinvestment into improvement plans: €12.32 million.
• SME allocation: €9.856 million (80%).
• Total Economic Impact: Low estimate (multiplier 1.5): €14.78 million. High estimate (multiplier 2.0): €19.71 million.

Bottom Line

• Cost-Efficient Operations: Savings of €50 million annually.
• Reinvestment: €12.32 million directly into city improvements, with additional funds supporting open-source systems.
• Tax Relief: €25 million returned to citizens annually.
• Spinoff Benefits: Significant economic gains for local SMEs involved in implementation, maintenance, and project execution.

Moving To Open Source Is About More Than Numbers

I would like to congratulate those who are still here after this long ramble. What I hope to have shown -- even though our hypothetical Alex and their hypothetical family in our hypothetical city is looking to be more well-off and happy -- is that the argument for moving to open source is not going to be primarily about the numbers.

It should always be about principal. About opening up decision-making, and in particular automated decisions that might have negative impact on people's lives.

Nevertheless, when combined with reinvestment and tax savings, and the mandate to allocate spinoffs to local SME's, even a small reinvestment can make a big impact. And especially for software service companies which are local, because the use of proprietary systems most always excludes such companies.

Hopefully this exploration can give some idea of how transitioning to open source in municipal operations can serve as a transformative strategy for cities, not only in terms of cost efficiency but also for local economic growth. Alex and their city might show quantifiable savings (€50 million annually), but the deeper impact lies in how these savings are reinvested into the community and allocated to local SMEs. By directing resources towards public improvements and local businesses, the city generates significant spinoff benefits, amplifying every euro reinvested into broader economic and social gains.

I think that the argument for open source must be about more than numbers, it should be about transparency, inclusivity, and empowering local decision-making. Open-source systems are different from proprietary software, in that they are more open to scrutiny. That helps with trust in government, and cities are where government starts.

Together with reinvestment and local economic policies, the transition to open source becomes not only a financially sound choice but a principled one -- creating a more equitable, sustainable, and resilient urban future. A city I would love to live in.