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Microsoft trumps Linux with Euro deals
Even gets one over on Linux in its own back yard...

By silicon.com

Published: Wednesday 02 July 2003

Microsoft has announced a trio of European government contract wins, the latest salvo in the growing turf battle between the software giant and sellers of the upstart Linux software.

The software giant would not disclose financial terms of the deals, which it said it won after competing head-to-head for the business with various Linux companies.

Microsoft said it will install its signature Windows server and desktop software on thousands of computers for the city governments in Frankfurt, the Latvian capital of Riga, and Turku in Finland - home country of Linux founder Linus Torvalds.

For the past year, an intense battle has been raging across Europe as more corporations and government agencies turn to the open-source Linux software to run their desktop and network computer systems.

The biggest blow to Microsoft came in May when Germany's SuSE landed a lucrative contract to switch more than 14,000 Windows desktop PCs to Linux for the city government of Munich.

Despite having a commanding lead in the European corporate desktop market, Microsoft had begun to lose ground to the open-source technology.

"Now we see the importance in this new world with the OSS Linux phenomenon that we have to readdress the value of our offering," Wilfried Grommen, general manager for Microsoft business strategies for Microsoft European, Middle East and Africa, told Reuters on Tuesday.

"The world is not only OSS Linux. Maybe we have to put that message straight," he added. In its announcement, Microsoft highlighted that it won the business against Linux.

"It's very important for Microsoft to very publicly respond to these challenges," said Gary Barnett, an analyst with London-based technology consultancy Ovum. "This is clearly a counterbalance to all the pro-Linux noise."

Microsoft has invested heavily to fight off Linux, which threatens to eat into its most profitable business.

Barnett said Microsoft Windows runs more than 90 per cent of all corporate and government desktop computers in Europe, but the server market is much more competitive with Linux coming out of nowhere in the past year to challenge Windows NT and the more established software system, Unix.

Longtime Unix companies such as IBM have jumped into the Linux market in recent years to address this emerging market.

Linux, which is on an estimated 15 per cent of all computers sold in Western Europe, is considered Microsoft's only true rival.

Microsoft has gone on the offensive, pushing the notion that Windows is as reliable as any product on the market and that security is the new cornerstone of its business.

In doing so, it has sought to silence the open-source community that has made big inroads with companies by saying Linux is reliable, more secure, and cheaper to maintain.