The German Federal Finance Office in Berlin has replaced more than 30 smaller servers with one mainframe computer, IBM's eServer z990, running the open-source Linux operating system.
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IBM has said it one of the largest Linux-based mainframe deployments in Europe.
The Linux deployment is part of an agreement IBM struck with the German Federal Ministry of the Interior in 2002 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, reduce costs and meet its growing computing needs more efficiently in the future, IBM spokesman Hans-Jürgen Rehm said. "The authority saw a need for centralisation to create greater transparency and achieve better control."
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 Microsystems.
IBM's business partner, Wiesbaden-based SVA, deployed the mainframe system for the German authority.
John Blau writes for IDG News Service