Germany's cash-strapped public sector will be the driving force behind the takeup of open-source software, according to a Novell and IBM-backed study by the Fraunhofer Institute for Industrial Engineering.

Around 47 percent of the 115 public administrations polled for the study Structural Change or Flash in the Pan? said they estimated cost savings potential of more than 50 percent by using open-source software. Nearly 60 percent said they planned to deploy open-source software as part of the medium or long-term IT strategy.

Several federal government organisations have already become users of open-source software, including the German Parliament, Federal Tax Office and Federal Office for Information Security, as well as numerous other state and local government agencies, such as the City of Munich and the City of Schwäbisch-Hall.

In September, Munich began its migration to Linux on the desktop. The city switched the first 100 of its 14,000 PCs from Windows and Office applications to Linux and OpenOffice.

Federal, state and local governments in Germany as well as other public agencies in the country have been considering Linux ever since the Federal Ministry of the Interior agreed in June 2002 to a partnership with IBM to supply computers with Linux at favourable conditions.

Small and medium-size IT service providers will benefit the most from public-sector spending in open-source products and services, accounting for 83 percent of the investments made in this area, Fraunhofer Institute said.

The study was commissioned by IBM, Novell, and the Economic Development Office of the City of Stuttgart.