Citing concerns over cost and compatibility, the top technology official at the federal Department of Transportation has placed a moratorium on all in-house computer upgrades to Microsoft's new Windows Vista operating system, as well as Internet Explorer 7 and Office 2007, according to a memo obtained Friday by InformationWeek.

In a memo to his staff, the DOT's CIO Daniel Mintz says he has placed "an indefinite moratorium" on the upgrades as "there appears to be no compelling technical or business case for upgrading to these new Microsoft software products. Furthermore, there appears to be specific reasons not to upgrade."

Among the concerns cited by Mintz are compatibility with software applications currently in use at the department, the cost of an upgrade, and DOT's move to a new headquarters in Washington later this year. "Microsoft Vista, Office 2007, and Internet Explorer [7] may be acquired for testing purposes only, though only on approval by the DOT chief information officer," Mintz writes.

The memo is dated Jan. 19. In an interview Friday, DOT chief technology officer Tim Schmidt confirmed that the ban is still in effect. "We're analyzing different client software options and also integration issues," says Schmidt. Among the options the Transportation Department is weighing as a possible alternative or complement to Windows Vista are Novell's Suse Linux and, for a limited group of users, Apple's Macintosh hardware and software, he says.

Schmidt says the Transportation Department hasn't ruled out upgrading its computers to Windows Vista if all of its concerns about the new operating system -- the business version of which was launched late last year -- can be resolved. "We have more confidence in Microsoft than we would have 10 years ago," says Schmidt. "But it always makes sense to look at the security implications, the value back to the customer, and those kind of issues."

The DOT's ban on Vista, Internet Explorer 7, and Office 2007 applies to 15,000 computer users at DOT proper who are currently running the Windows XP Professional operating system. The memo indicates that a similar ban is in effect at the Federal Aviation Administration, which has 45,000 desktop users.

Compatibility with existing applications appears to be the Transportation Department's major concern. According to a separate memo, a number of key software applications and utilities in use in various branches of the department aren't Vista compatible. Among them are Aspen 2.8.1, ISS 2.11, ProVu 3.1.1, and Capri 6.5, according to a memo issued by staffers at the DOT's Federal Motor Carrier Safety Administration.

Any prolonged ban on new Microsoft technologies by the federal government could have a significant impact on the software maker's bottom line, as Microsoft sells millions of dollars in software to the feds annually.