18 September 2003 Australian telecoms giant Telstra will decide shortly whether to ditch Microsoft Windows on the desktop in favour of Sun Microsystems’ new Linux-based alternative, codenamed ‘Mad Hatter’.

Chief information officer Jeff Smith said that Telstra is trialing the new operating system, formally launched this week as the Sun Java Desktop, as part of an initiative intended to update the telecom operator’s IT infrastructure, while simultaneously slashing costs.

Australia’s national telco wants to reduce its over-reliance on Microsoft and also has ambitious plans to slash its annual IT budget in half, from $1.5 billion to $750 million, according to The Australian newspaper.

What will make the move especially significant is that Telstra is considering migrating tens of thousands of desktop computers from Microsoft Windows to the Sun Java Desktop, not just deploying Linux on servers.

Significantly, Telstra is one of many companies that has held off from signing up to Microsoft’s controversial Software Assurance licensing scheme, launched in August last year. That was criticised by analysts for increasing corporate desktop licensing costs by an average of 40%.

Telstra’s evaluation is now in its final stages, with CIO Smith drawing up total cost of ownership calculations to see how well the new environment will compare with Windows. That ought to be completed before the end of October.

Any deal will also include a shift from Microsoft’s Office applications suite to Sun StarOffice.

Should the migration go ahead, it will be considerably bigger than the one that systems giant IBM and Linux operating system distributor SuSE agreed with the City of Munich in June. That attracted worldwide attention in the mainstream media.

However, if Munich is a reliable guide, it will also tempt Microsoft to put some big discounts on the table in a bid to prevent Telstra from defecting, possibly carried by hand by Microsoft CEO Steve Ballmer.