This paper will argue that government purchasing preferences for open source software will hurt many small business consumers in their capacity as government contractors, and prevent many government agencies from realizing the benefits of technology. Under OSS, technology will move from a product to more of a service model. The technical demands of refining OSS will frequently exceed the internal capabilities of small and regional government agencies and the contractors that serve them due largely to total cost of ownership issues. In addition, these small agencies with limited IT staff and expertise will not be able to achieve the level of security that information held by government usually demands. Though government agencies may be able to turn to outside technical consultants, in more geographically remote areas, such vendors will be few and far between. Governments will also undermine nascent small businesses, hoping to win public contracts, that depend on their ability to develop and sell primarily products, rather than services.