[SLUG] Microsoft Loses Munich Deal to Linux

From: William Coulter (wrcoulter30@yahoo.com)
Date: Thu May 29 2003 - 10:59:59 EDT


I thought that I would pass this on to the group.
William

> http://www.eweek.com/article2/0,3959,1109625,00.asp
>
> Microsoft Loses Munich Deal to Linux
>
> By Peter Galli
>
> Microsoft Corp. is set to lose a large Windows desktop contract it has
> with the German government to Linux and open-source software.
>
> The city of Munich, the third largest in Germany, has chosen Linux and the
> free OpenOffice.org productivity suite for its more than 15,000 desktop
> systems, replacing Microsoft Windows NT, say sources close to the
> negotiations.
>
> A spokesman for SuSE declined to comment, while a Microsoft spokesman
> could not be immediately reached for comment.
>
> The deal - expected to be announced tomorrow by SuSE, the city of Munich
> and IBM - will be another big blow for Microsoft, which has actively been
> lobbying governments around the world not to embrace open source and
> Linux.
>
> To that end, Microsoft in January announced a new global initiative to
> provide governments around the world with access to Windows source code
> under its Government Security Program, designed to "address the unique
> security requirements of governments and international organizations
> throughout the world.
>
> "We view governments that utilize our software as trusted partners. The
> GSP will provide governments with the opportunity to assess the security
> and integrity of the Microsoft products they deploy...
>
> "We are also providing technical documentation, methods for
> troubleshooting, access to cryptographic tools subject to export controls,
> and access to Microsoft expert support technicians who can collaborate
> with governments on how they use this source code access," Microsoft's
> chief technology officer Craig Mundie said at that time.
>
> China, the U.K., Russia and NATO are among the first participants in the
> program, while Microsoft is talking to more than 30 other countries about
> their interest in the program.
>
> Microsoft's GSP move followed its concerns about the interest a number of
> foreign governments and agencies have shown in Linux. Last June, the
> German government said it was moving to standardize on Linux and an
> open-source IT model at the federal, state and communal levels.
>
> As part of this move, Germany signed a contract of support with IBM that
> would facilitate moving its agencies to Linux and the development of
> innovative IT solutions based on open standards.
>
> Otto Schily, the German minister of the Interior, said at that time that
> the contract with IBM enabled the administration to buy IBM hardware and
> software running Linux under competitive pricing conditions.
>
> "Linux offers the best potential as an alternative to Windows for server
> operating systems to reach more heterogeneity in the area of software. The
> fact that we have an alternative to Windows with Linux gives us more
> independence as a large software customer and is a major contribution to
> the economic use of IT in the administration," he said.
>
> The German government's move to IBM and Linux followed similar moves by
> more than 75 other government customers. The U.S. Department of
> Agriculture, the Federal Aviation Administration, the U.S. Department of
> Energy, the U.S. Air Force and Pinellas County, Fla., are all using Linux,
> as are agencies in the governments of China, Singapore, South Africa and
> Australia.
>
> Microsoft also recently said that it could be forced to lower its software
> prices in the future as a result of the growth of open source. In its
> February 10-Q quarterly filing with the Securities and Exchange
> Commission, Microsoft said that the popularization of the open-source
> movement continued to pose a significant challenge to its business model.
>
> This threat included "recent efforts by proponents of the open source
> model to convince governments worldwide to mandate the use of open source
> software in their purchase and deployment of software products.
>
> "To the extent the open source model gains increasing market acceptance,
> sales of the company's products may decline, the company may have to
> reduce the prices it charges for its products, and revenues and operating
> margins may consequently decline," it said.
>
> Also, in an assessment of the challenges facing Microsoft, John Connors,
> Microsoft's chief financial officer, said in a teleconference with the
> media and analysts last month to present the Redmond, Wash., company's
> third-quarter financial results, that Linux and non-commercial software
> remained a significant threat to the company.
>
> That warning followed the comments by Microsoft Corp. chairman and chief
> software architect Bill Gates in February, when he told more than 600 of
> Microsoft's Most Valuable Professionals (MVPs) that he took the Linux
> threat seriously.
>
> Microsoft also last week took center stage in the crusade by the SCO Group
> to protect its Unix intellectual property, when the Redmond software firm
> said it was licensing the Unix source code and patent from SCO.
>
> Responding to allegations that Microsoft was simply using the IP license
> as a ruse to fund SCO's campaign against IBM, which SCO is suing for $1
> billion, and Linux, which it claims is an unauthorized derivative of Unix,
> Alex Mercer, a Microsoft spokeswoman, told eWEEK that this was "absolutely
> not" Microsoft's intent. "There is absolutely no correlation between the
> IBM suit and our IP license with SCO," she said.
>

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