European car manufacturing giant PSA Peugeot Citroen has agreed to one of the Continent's largest-ever deployments of open-source Linux software on desktop computers.

As part of a multiyear contract with Novell, the French company will install Suse Linux Enterprise Desktop on up to 20,000 computers, in addition to 2,500 servers, the U.S. software vendor said Tuesday.

The announcement comes on the same day that Microsoft's new Vista operating system and Office 2007 software suite become commercially available for consumers.

Charles King, principle analyst with Pund-IT, a technology research firm, referred to the size of the Novell contract with Peugeot Citroen as "significant" and the timing of the announcement as "very interesting."

"The migration to Vista will require a significant hardware upgrade," King said. "The costs associated with this upgrade will open the door for companies to consider alternatives."

Officials from Peugeot Citroen were unavailable for comment, but Novell said in a statement, quoting an IT representative from the French company, that support for Suse Linux Enterprise Desktop and the user-friendly design of the software were key factors in the selection process.

The opportunity to lower IT costs through open-source software almost certainly had to be another factor, King said.

Novell provided no financial details of the contract.

With Vista and Office being powerful IT tools, King believes that many companies will start asking themselves what sort of functionality their employees need on their desktop computers and, equally important, what they are willing to pay for this functionality.

With Vista and Office 2007, King warned, some companies could be purchasing way more functionality then they need. "Let me put it this way: Do you need a Ferrari to go to the neighborhood shopping store when a mini-van will do?" he said.