The German Federal Finance Office has signed up with Linux in what supplier IBM is calling one of the largest Linux-based mainframe deployments in Europe.

The Berlin-based authority has replaced more than 30 smaller servers with one mainframe computer, IBM's eServer z990, running the open-source operating system.

The Linux deployment is part of an agreement Big Blue struck in 2002 with the German Federal Ministry of the Interior to supply computers with Linux, at a discount, to federal, state and local governments as well as other public authorities.

The Federal Finance Office opted for the IBM mainframe system to simplify its IT environment, lower its costs and meet its growing computing needs more efficiently in the future, IBM spokesman Hans-J├╝rgen Rehm said. "The authority saw a need for centralisation to create greater transparency and achieve better control," he said.

The Federal Finance Office is the largest of five federal authorities under the control of the German Ministry of Finance. It manages, among other things, the payment of all public sector employees and the taxation of German citizens with taxable income abroad, as well as the country's largest enterprises.

Its computer centre, in particular, is responsible for operating the Internet and intranet applications of Germany's entire federal finance administration, providing service to more than 120,000 users. The mainframe consolidation replaces smaller servers supplied by IBM, Fujitsu Siemens and Sun.

The decision by the Finance Office to go with Linux can been tracked back to Munich Council's decision in May last year to install it on all its 14,000 PCs.

At the time, Microsoft recognised the threat to its position and offered a special deal. Even Steve Ballmer turned up to sway the decision. However Munich still chose Linux and provided a useful case study for other cities looking to reduce their IT costs. By September, a further nine German cities prepared to go the Linux route.

Now the Federal government has given the open-source software its backing, expect many more similar announcements in the future.