In depth look at Microsoft’s loss in Munich

USA Today has an excellent article about how Microsoft lost the city of Munich to SuSE and IBM’s Linux offering.

On May 28, the city council approved a more expensive proposal — $35.7 million — from German Linux distributor SuSE and IBM, a big Linux backer.

This article really highlights the incredible marketing mistakes that Microsoft has made over the past couple of years. Increasingly, Microsoft has been using strong arm tactics with its licensing changes, right at a time when its biggest threat has far fewer licensing restrictions. The day before Munich voted, Microsoft sent a revised $23.7 million last-ditch bid to Munich. This bid was considerably lower than what SuSE and IBM were offering, but tossing out a new proposal one day before the end of a complex municipal process is not the way to win business.

In the end, Munich is paying more than Microsoft’s offer for the total contract. However, their “strategic needs” were met, and they are now in control of their upgrade and deployment cycle.

As I wrote two years ago, this kind of win for Linux was inevitable and things will continue on this track as the Software Commons becomes established.