264 billion reasons to rethink public IT

The EU spends about EUR 264 billion a year on public information systems, mostly closed software the buyer cannot leave. When the vendor cannot be switched, the price signal disappears and the market economy stops working exactly where public money is largest.

Imagine a head of IT who asks the current systems vendor for an estimate of moving the data to another platform. The reply is most likely a sum that cannot be paid and a timeline that cannot be waited out. The decision was made on their behalf years ago, when the system was procured.

It rarely makes the news because it looks like a technical detail. It is, however, a structural problem in the market.

What is a functional market made of?

A market economy works when the buyer can switch supplier. Price is a signal only if you can vote with your feet. When leaving is practically impossible, the price signal disappears. Data is locked into the vendor’s formats, interfaces are limited, and processes are built on top of one supplier’s services. What remains is one supplier, one customer, and a contract that does not end.

The biggest stage for this logic is public procurement. The European Commission’s technology sovereignty package, published in June 2026, notes that the EU spends roughly EUR 264 billion a year, mostly on closed US software. The Finnish counterpart is closer to home: in spring 2022 Helsinki introduced the Sarastia365 HR payroll system, and thousands of employees received incorrect pay or none at all. It remains one of the most expensive single public procurement losses of the 2020s, and its root cause is vendor lock-in. The system could not be moved or replaced at a reasonable cost when it turned out not to work.

When the buyer cannot leave, prices rise, quality falls, and domestic supply withers. What remains is a publicly funded monopoly. Preventing it is the task of the market economy, not an ideological choice. The pro-market line secures competition and switchability structurally. The pro-business line shields the incumbent supplier from change, even when the result is the disappearance of competition. A defender of the market economy chooses the first.

Open the interfaces, restore competition

The solution is structural. Open source and open interfaces must be written into procurement law as the starting point, not as an exception. When the cost of leaving falls, competition returns and the market economy works as it should.

eVaka is the most concrete Finnish demonstration of this. The shared open-source early childhood education system used by more than 10 municipalities had cost around EUR 9 million by 2023. Helsinki’s closed counterpart Asti, built alone, cost about EUR 32 million between 2019 and 2023 and was never finished. The difference is explained more by structure than by the software licence: when several municipalities share the same platform, development costs are divided, a maintenance fix is made once and everyone benefits, and a single supplier can no longer lock the buyer into a price spiral. The same logic is visible in Helsinki’s choice to build the core information system for its public services on top of the domestic provider UpCloud. Sovereignty and cost-efficiency are produced in individual procurement decisions.

For Finnish policy, this means three concrete measures:

• Open source as the default. Software built with public funds is by default public code. A closed alternative is chosen only for a justified reason, not the other way around.
• Portability and open interfaces into procurement law. Every system must allow data, processes and integrations to be moved to another supplier. The requirements are written in at the procurement stage, not after the fact.
• Shared system costs across municipalities. The eVaka model is scaled to the national level. When dozens of municipalities share maintenance, each saves money, and domestic SMEs gain the scale they need to compete.

I have built software on top of international platforms for over a decade. Vendor lock-in is recognised in technical terms already at the procurement stage: that is when you see which interfaces have been designed, which formats the data is stored in, and on what terms the integrations can be detached. Preventing lock-in does not require new technologies. It requires that portability is defined as a condition of procurement and assessed before any contract is signed.

SMEs gain access to public tenders

Public procurement is Finland’s single largest IT market. It is where it is decided whether we develop a competitive domestic software sector or remain customers of a handful of foreign suppliers. At the moment, large parts of public tender thresholds are built so that only an international supplier can clear them. When interfaces are open and portability is guaranteed, a Finnish SME can offer a module or a maintenance layer as part of the whole. The tender becomes a real competition.

Comparison points are found among Finland’s closest neighbours. Estonia built its public sector on top of open interfaces from the start and linked its systems together via X-Road, through which data moves between authorities under controlled conditions. Germany’s Schleswig-Holstein has in recent years replaced its Microsoft systems with Linux and LibreOffice, and after a EUR 9 million investment, savings have reached around EUR 12 million. Denmark has moved its core systems away from individual vendor lock-ins on the same logic. Nordic and European institutional reliability rests precisely on the fact that the authority’s system is auditable and replaceable. Independence is formal if neither can be done.

One caveat is in order. Open source alone does not prevent vendor lock-in. A lock-in can emerge in open-source systems too, if only one supplier knows how to maintain them and has the time to do so. For this reason the openness of interfaces, data formats and processes must be defined together with the openness of the code. Procurement law needs all three layers.

A market you cannot leave is not a market.

Defending the market economy in Finland today means more than the structure of taxation or competition law. It means deciding that the largest public buyer opens the doors to competition precisely where it has closed them for the past decade. The EU survey by Sitra and EVA published in May 2026 shows that 77 percent of Finns want to reduce technological dependence on the United States, and 79 percent support EU strategic autonomy in critical technologies. The mandate exists, and the alternatives are built in procurement law. Digital independence is built in individual procurement decisions, and the same applies to a functioning market.

What do you think: should portability requirements be written into procurement law as binding?