In a setback to Microsoft, the local government in Munich, Germany, has voted to move its 14,000 computers from Microsoft Windows to the Linux operating system despite all efforts by the software giant to hang on to the multi-million dollar contract.
The council of Germany's third-largest city said on Wednesday that it will spend about 30 million euros ($35 million) on the transition. In addition to switching operating systems, the city also plans to move from Microsoft's Office productivity software to the open-source OpenOffice.
Microsoft, the online CNET specialising in technical news said, had fought hard to retain the business, offering deals and discounts, with CEO Steve Ballmer interrupting a ski vacation in Switzerland to pay a personal visit to Munich's mayor about the issue.
Munich pitted Linux and OpenOffice against Microsoft products, the council said in a statement. That competition helped lower prices, it said. With Linux, the city has more freedom from reliance on products from a single company, it said.
The deal also is notable, CNET said, because it involves desktop computers. Until now, Linux has been popular chiefly on more-powerful networked server computers, where Microsoft doesn't have as strong a presence in the market, it added.
Though Munich doesn't intend to select open-source technology providers until the first quarter of 2004, computer maker IBM and Linux seller SuSE helped Munich evaluate the move and are candidates, the companies said.
"I consider our position as quite good, because we (have been) heavily involved from the beginning," said SuSE chief executive Richard Seibt in an interview on Wednesday.
Microsoft, CNET said, isn't throwing in the towel.
"With respect to the Munich administration, we will continue to work closely with them to explore additional programmes and offerings that best meet the needs of Munich's citizens and businesses," the company said in a statement.
The software giant pointed to a new agreement it had signed with Frankfurt, under which the German city joined a Microsoft programme that offered products to German local governments under 'inexpensive and flexible terms.'
Some governments, CNET said, enjoy the fact that they can see all the source code underlying Linux, as it reassures them that, among other things, there is no secret code that could compromise their systems. Microsoft has countered this with a carefully controlled code-sharing process of its own.