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London's Newham Borough Council remains in pricing negotiations with Microsoft, but an apparently counter-intuitive migration issue bodes ill for the open source desktop alternative, and speaks volumes about the legacy hills that will have to be climbed in order to switch away from Microsoft. By not buying Microsoft software, Newham is severely restricting its ability to make a general deployment of open source desktops.

So not giving Microsoft money increases the chances of it giving Microsoft money, and decreases the chances of it spending money on open source software. How does that work, then?

Effectively, despite the knife-edge negotiations and Windows versus open source playoffs that have been public for some months now, Newham has Microsoft lock-in. Sure, there are alternatives to Exchange, but that is a 'rip and replace', that is an 'I wouldn't start from here.' Newham has gone on the record as saying that it does not see short-term savings through switching from Microsoft, but that it sees it as important to continue developing knowledge and skills in alternatives. So although it would seem to have little choice in the short term, it has some negotiating clout in that it has been mapping out possible escape hatches for the future.

The key is that upgrading to Exchange Server 2003 would cost Newham several hundred thousand pounds which it has not got. The Register now proposes to start speculating, but the logic is so inexorable that we find it difficult to see how what we are about to say could be off the mark.

Newham can't switch to open source because it can't afford Exchange Server 2003. But it's going to have to upgrade to Exchange Server 2003 one day, given that the product it's currently running isn't getting any younger. Should the money magically appear from somewhere, however, it will then be a lot cheaper for it to switch to open source desktops. Or if it's a couple more years down the line when it's a bit more confident about open source it could consider switching away from Exchange entirely.

The trick for Microsoft is therefore to avoid striking short term discount deals solely on client software, as this would simply buy the customer time, and postpone the issue. Instead, it needs to maintain linkage and renew the lock-in with a deal sufficiently long, and sufficiently advantageous, to ensure that Newham carries on down the Windows/Exchange path. A long term deal would also provide some justification for larger discounts than usual. So when it's finally signed off, we wouldn't be at all surprised if Newham professed a long-term commitment to Microsoft, substantial cost savings and a satisfactory outcome. And that somehow, it managed to afford Exchange Server 2003 at some point in the near future after all. ®

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