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Is Microsoft losing ground to Linux?

Put off by expensive licenses and fast upgrade cycles, some countries are starting to choose the Linux OS over Microsoft's Windows.

Open-source software gave Microsoft a one-two punch this week, with the European Union and an African nonprofit educational organization showing preference for Linux systems.

The European Union awarded on Thursday a $249,000 (250,000 euro) contract to U.K.-based system-integrator Netproject to study the feasibility of moving the information systems of several member countries' governments to the Linux operating system from Microsoft's Windows OS.

Microsoft's expensive licensing terms and its push for customers to speed their software upgrade cycles are driving the European Union's interest in open-source solutions, said Eddie Bleasdale, Netproject's CEO. Describing a meeting with representatives from several EU member countries, Bleasdale said Microsoft's current licensing terms had governments looking for other options.

"Everybody in the room said that they could not deal with the cost of moving to Microsoft's latest products," Bleasdale said.

Adding insult to injury, SchoolNet Namibia, an organization providing computing resources to that sparsely populated country, has turned down a Microsoft offer to put Windows systems in its schools and decided to stay with its Linux systems. In a very public letter, the organization lambasted Microsoft for a plan that would give the schools a $2,000 break on Office software but make them pay $9,000 for Windows XP.

"The real issue for schools is not the cost of proprietary software licensing, but the challenges and costs of deployment, maintenance and skilled human resources," Joris Kamen, founding executive director for SchoolNet Namibia, stated in a letter to Microsoft's East and South Africa regional manager. "Conventional Microsoft products have rapid product cycles and quick obsolescence, along with expensive long-term maintenance and support implications."

The two incidents are the most recent in a backlash against Microsoft's push to sell its latest versions of Windows and Office products.

Last May saw many Microsoft customers balk at signing up for the company's new subscription-based licensing. Under the software giant's new program, customers would be forced to pay either an annual fee of $29 per desktop or an annual subscription fee for the right to upgrade their Microsoft software to stay up to date--instead of paying for upgrades at will, as before.

Although Microsoft wouldn't comment directly on the Namibia incident, Peter Houston, senior director for the Windows server product management group, did say the company's latest product push hasn't won the company many friends.

"It would be hard to say that things like our new licensing haven't made customers look at Linux," Houston said.

"I guess one of the challenges is that as a customer, you are faced with all sorts of information, and the question is what do you trust," Houston added. "A lot of this gets proved over time, and customers are being asked to make a bet on whether Linux will win out."

In March, Peruvian Congressman Edgar David Villanueva Nunez wrote a letter to Microsoft countering the company's attacks against a bill in Peru that could advocate the use of open-source software by the country's government.

In the United Kingdom, the group responsible for making technology recommendations to the U.K. police has pushed the use of Linux as a way to cut the cost of software ownership by as much as 65 percent, according to a Netproject study.

And in California, open-source advocates have proposed legislation, the Digital Software Security Act, that would force government agencies to only use software that didn't have restrictions on it.

The changes have Microsoft, and some policy organizations funded by the company, on the offensive against open-source software.

For one, Microsoft's Houston takes issue with any cost-of-ownership study that puts open-source software ahead of Microsoft's products.

"If you are going to use Linux, there is a high services component," he said. "You are going to have to pay for that systems integration."