Nine German cities in the state of Rheinland Pfalz are in advanced talks to replace many, if not all, of their Microsoft software products with open-source alternatives, particularly the Linux operating system.

"We had an important meeting this month to discuss what we need to know if we make the switch to open source and will meet again on Oct. 14 to plan pilot tests," said Markus Donsbach, IT director for the League of Cities in Rheinland Pfalz. "Many of the cities have to make decisions by the end of this year because their contracts with Microsoft expire early next year."

The cities are among the largest in the state of Rheinland Pfalz: Alzey, Kaiserslautern, Koblenz, Landau, Mainz, Neustadt, Speyer, Trier and Worms.

Should they dump Microsoft for open source, they would join two other cities that have already made the move: Schwäbisch Hall and Munich. While Schwäbisch Hall, a community of 36,000 in southern Germany, has decided to build its entire IT infrastructure on the open-source Linux operating system, replacing Windows from Microsoft, Munich, the capital city of the state of Bavaria, will equip all of the 14,000 computers in its public administration with Linux and other open-source office applications.

Almost all major German cities and many smaller ones are giving open-source software "serious thought" due largely to tight IT budgets, according to Donsbach.

The cost of licensing Microsoft products and the lack of support for some of them, such as the NT operating system, which is still used widely in many city administrations, are among the chief reasons for the nine German cities to mull a switch from the software giant to providers of open-source products, he said.

One big hurdle for the cities to migrate to open-source software could be their wide use of customised-software programs developed by a legion of smaller software vendors. "The cities have systems running on different IT infrastructures," Donsbach said. "The task force that we've establish intends to contact all the vendors and find out if they already provide interfaces to open-source systems and if not, whether they plan to provide these in the near future."

Eager to maintain a position in Germany's huge public-sector market, Microsoft has been willing to bend on prices to keep key accounts for its Windows operating system and other products from wandering into the open-source camp. In April, the German Interior Ministry signed a licensing agreement with Microsoft to receive favorable conditions for both buying and leasing the U.S. company's software products. The agreement, according to Interior Minister Otto Schily, could save federal, state and local governments "much money."

That deal came just weeks after Microsoft Chief Executive Officer (CEO) Steve Ballmer paid a visit to government officials in Germany.