Microsoft swoops in to claim Nigerian Linux deal for Windows

Last-minute change ousts Linux vendor Mandriva, which thought it had won contract

Linux vendor Mandriva SA thought it had signed a deal with Nigeria's government to equip elementary schools in that country with new PCs running the open-source operating system as part of a pilot project. But then Microsoft Corp. threw a wrench into the works, according to Mandriva CEO Francois Bancilhon.

Bancilhon said today that Paris-based Mandriva agreed three weeks ago to supply a customized version of its namesake Linux distribution to run on 17,000 of Intel Corp.'s Classmate PCs, which are ruggedized laptops designed for educational uses in developing countries. On Tuesday, Mandriva posted a press release about the contract on its Web site.

Now, though, Nigeria has decided to strip the Linux operating system from the Classmate systems and install Microsoft's Windows XP instead, Bancilhon said. "It is clearly a disappointment," he added. "We do feel the power of somebody much stronger than we are."

Bancilhon wrote a seething blog posting addressed to Microsoft CEO Steve Ballmer on Wednesday, after Microbyte International Inc., Mandriva's business partner in Nigeria, received an e-mail saying that the deal had fallen through.

"We actually closed the deal, we took the order, we qualified the software, we got the machine[s] shipped," Bancilhon wrote. "Now, we hear a different story from the customer: 'We shall pay for the Mandriva software as agreed, but we shall replace it [with] Windows afterward.'"

The public manner in which Bancilhon aired his frustrations, along with the question of why the Nigerian would agree to a software deal and then change its course, makes the situation all the more interesting, said Laurent Lachal, an analyst at Ovum Ltd.

But that doesn't mean Microsoft has done anything that other large vendors wouldn't have tried to do as well, Lachal added. "Microsoft is definitely using its muscle to undercut its opponent," he said. "That's a standard practice, not just of Microsoft."

In a statement sent via e-mail, Microsoft didn't address the specifics of the Nigerian deal. "Microsoft operates its business in accordance with both the laws of the countries in which it operates and with international law," the company said.

Bancilhon said Mandriva knew it was battling the software giant in the weeks before the initial deal was signed. The Linux vendor even lowered its contract pricing after the Nigerian government received counteroffers from Microsoft, he said. And in the end, Mandriva thought it had won the contract.

Dele Ajisomo, who owns Naperville, Ill.-based Microbyte International, said the e-mail announcing Nigeria's change of heart came from an official at Technology Support Center Ltd. (TSC), a company that is helping the country's government deploy the Classmate systems. The e-mail, a copy of which was obtained by the IDG News Service, disclosed that TSC had reached an understanding with Microsoft to convert the laptops to Windows XP.

"The [Classmate PCs] shipped to us with Mandriva Linux installed will be loaded with Windows and Office prior to shipment to the recipient schools," the e-mail said. "We acknowledge that we did issue a purchase order for 17,000 Mandriva licenses, and we have paid for part of that number."

Ajisomo said that as many as 5,000 of the Classmate systems had already been deployed with Mandriva Linux before the e-mail was sent. "There is something fishy going on," he claimed. "I was really, really very surprised."

The switch comes as Microsoft and TSC appear to have reached a marketing agreement. According to documents obtained by the IDG News Service, Microsoft would give TSC $400,000 for a three-month program to produce a marketing campaign around the deployment of the Windows-based Classmate PCs.

Some schools in Nigeria can be reached only by "hours-long canoe rides and the fording of rivers," the marketing agreement states. "Capturing these momentous changes in pictures and in video will create compelling evidence of the efficacy of these interventions and convince policy-makers, budget-holders and government officials on the utility of these investments."

Bancilhon, who implied in his blog posting that bribery may have played a role in the switch from Linux to Windows, said today that he doesn't believe any illegal activities actually took place.

For now, Mandriva doesn't expect to take any legal action in connection with the change in plans, Bancilhon said. But he added that he is still gathering facts. "It's way too early to make any kind of decision," he said.

Copyright © 2007 IDG Communications, Inc.

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