The deal with New South Wales, located just outside of Sydney, has the city's Roads and Traffic Authority switching to Sun's StartOffice productivity suite from Microsoft Office. In addition, the deal has the government agency switching to open-source Linux from the Windows operating system and to Sun's Java-based e-mail and calendaring software.
Sun has started the migration of 1,500 desktop users in 120 offices, which is expected to be completed by early November, a spokeswoman said. Under the deal, a total of 3,000 users will switch to Sun desktops by the end of the year.
Sun declined to say how many desktop users it has moved from Microsoft's system to its own this year. But the company in a statement crowed that the latest deal was a "landmark decision" by the Australian government to move from proprietary Windows to an "open, secure and cost effective IT infrastructure." Indeed, the RTA said it expects to reduce total cost of ownership by up to 20 percent, or $1.5 million a year.
Sun's claims, however, met with skepticism among analysts.
Mark Levitt, analyst for International Data Corp., said Sun has yet to prove it's making significant inroads into Microsoft's desktop monopoly.
"We see examples, and we see governments pushing back on Microsoft licensing and trying to open up to Linux and other software," Levitt said. "But it's hard to tell the exact level of momentum."
IDC expects the number of Linux desktops worldwide to increase to 10 million by 2007 from 3.4 million in 2002. That number, however, is miniscule when placed in the context of an estimated billion PC users by 2007.
"Those numbers are trivial," Paul DeGroot, analyst for market researcher Directions on Microsoft, said. "It's hardly worth collecting the stats."
DeGroot said a reasonable case can be made that Linux and Office alternatives will increase in popularity on the desktop over time. "But it's not clear if they'll take any market share from Windows," he said.
Nevertheless, the Australian deal certainly helps Sun. The Santa Clara, Calif., company declined to say how much the deal was worth, but said it does include some of its low-cost x86 and Sparc servers, including the Sun Fire V20z, V440 and V240. In addition, RTA may purchase some of Sun's infrastructure software products in the future, including its portal, directory and identity management servers.
Sun has had success in winning government contracts. In less than a year, the company has inked multi-million-dollar deals with government entities in China and the United Kingdom,