Microsoft denies role in Birmingham Linux flop

Microsoft has insisted it did not slash its software prices to encourage Birmingham City Council to abort its Linux project.

Birmingham pulled the plug on its open-source desktop project after it found that an upgrade to Windows XP was cheaper. Birmingham City Council had planned to roll out 1,500 Linux PCs across its libraries, but in the end converted just 200 PCs.

Industry experts have suggested that Microsoft offered Birmingham special discounts to sway the balance in favour of XP. But Microsoft firmly denied these allegations.

Asked whether Microsoft had offered special discounts to Birmingham, Nick McGrath, head of platform strategy told ZDNet UK, "No, not all. We are in discussions with every single local authority. There is a common buying framework."

"The decision was very much taken by Birmingham," McGrath added.

Birmingham City Council itself is slightly less clear on this point. When asked whether the council managed to get a better deal from Microsoft as a result of its trial, IT chief Glyn Evans told ZDNet UK that: "We did not seek a better deal from Microsoft nor was that an objective [stated or unstated] of the project". However, Evans didn't state whether any discount had been received

Many observers have claimed that Microsoft offers inducements to local authorities to stay with Windows if they show a willingness to switch to open source.

"Microsoft is going out of its way to lower prices to get deals," Laurent Lachal, senior analyst at Ovum, said.

"If it lowers it to the point where it makes no sense to deploy open source, then it is a good deal for the organisation."

Bob Griffiths, international secretary at SOCITM, the association for public sector IT professionals which supported the Birmingham project through the Open Source Academy, acknowledged that Microsoft had been "involved in negotiations" with the council.

He said that he was unsure whether Birmingham had gained an advantage through its Linux pilot in bargaining with Microsoft, but added that other councils had successfully used that tactic.

"I'm not sure that's the case with them. But other authorities have claimed advantages," said Griffiths.

The London Borough of Newham has been at the centre of such suggestions after it reverted to Windows in 2004 after trialling Linux, although it denies the allegations.

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Talkback 9 comments

    Pretty obvious that they didCaptain Britain -- 25/11/06

    Rolling out GNU/Linux in library-type kiosk deployments is so routine--and has been for several years--that I could've done it for all 1,500 stations, all by myself, for low quid. BY MYSELF I COULD'VE DONE IT! So, I don't buy Birmingham's excuse of "no open source expertise," because it's *everywhere*! Lame excuse, totally lame.

    Microsoft tried the same thing in Munich, too, let's not forget. It seems that the Germans are simply stronger that we Brits are, and the Germans will be the ones to benefit instead of us.

    AmazingAnonymous -- 25/11/06 (in reply to #320071730)

    Amazing. Fighting free (but less featured) products with a slight discount. How diabolical!

    Understandable, but disappointing.Anonymous -- 25/11/06 (in reply to #320071730)

    If Microsoft discounted to get the business, it clearly shows their willingness to keep the business. It’s important for them to continue to generate reliance on their product if they wish to stay in business. It’s nothing new or sinister.

    As previous mentioned, kiosks are a great environment for opensource OS’s and applications, as the OS is often hidden from the user and the application is all the they have access to. From a working office point of view, Microsoft still has the advantage as retraining costs money, and if they make their OS and additional products cost effective… who wouldn’t take it?

    How many people use Novell Netware, where did WordPerfect disappear to? As long as people are trained to use MS Windows and MS Office, any specific Linux distribution will always be the underdog.

    MS Cannot DiscountJohn -- 27/11/06 (in reply to #320071730)

    Microsoft cannot discount its software as it does not have a direct sales channel, only a large account reseller can do this as they sell under agreements to customers. They chosse the profit or lack of it they want to make on any deal. It is a direct mandate from the DOJ case and others that stop the type of practice you are talking about here.

    Microsoft cannot discount? Reality check please.Anonymous -- 28/11/06 (in reply to #320071781)

    Regardless of the DoJ ruling, there are *plenty* of ways MS can financially motivate a major customer to stay with MS products and services. Same goes for other half-regulated monopolies. Discounts are by no means the only option. Compare with BT, for example, many of whose prices are or were formally regulated in the UK, but near-monopolies like BT and MS still manage to find ways to make it cheaper for important customers to stay with BT/MS rather than move elsewhere, while ensuring that Joe Public continues to pay the full list price. Microsoft don't even have to try to disguise it because they don't have Ofcom-style "regulation" in the UK.

    DOJJohn -- 12/12/06 (in reply to #320071794)

    DOJ ruling is globally binding on Microsoft, as it is a USA based comapny, so actions anywhere in the word are prosecutable under US law

    What the...Anonymous -- 18/12/06 (in reply to #320071794)

    Sorry mate, that is just wrong. Do you think for just a minute that large organisations deal with officeworks for corporate arrangements and large scale licenses?

    Microsoft denies discountAnonymous -- 26/11/06

    Ever heard or rebates? They can give rebates and then deny giving discounts. Words mean everything, and Microsoft is a master at deception.

    We know they lower their pricesRex Alfie Lee -- 07/03/07

    Anyone who claims to believe that MS can't do this is really having a loan of themselves. What a "crock"!

    It doesn't matter because it doesn't serve them quite as well as they think it does. Ultimately, the buyer will throw more & more at MS because they know they can get away with it. MS can only hang on for so long. Eventually, they will fall by the wayside & good riddance.

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