It was just politics 101. Their politicians when facing the choice "keep using Linux => bye bye huge Munich MS Offices", didn't think twice and axed the penguin. Admittedly, it wouldn't have been an easy pick even for FOSS enthusiasts as many of us are, if we were in Munich politicians shoes: letting one of the biggest corporations out there build their huge headquarters in your city doesn't just mean bribes but jobs (almost 2000 in the HQ alone). As long as you're being identified as the one who let all this happen, you have just won a huge PR boost for creating jobs, plus all those people -and their families- votes, not to mention strong ties with MS high profile execs which would be of use one day. Honestly, Linux would have lost no matter its convenience.
If I had to, I'd bet all my horses that we'll see finally one day Munich and other cities adopting Linux, although it will be Microsoft branded and mostly FOSS.
Here's a recent interview with Christian Ude who was mayor when LiMux was introduced (german): https://www.golem.de/news/von-microsoft-zu-linux-und-zurueck...
This is a really interesting interview, unfortunately it is only available in German so I translated (with the help of deepl) the part about the situation right after the switch.
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Linux-Magazin: How big was the pressure afterwards?
[...]
Christian Ude: The most intense thing I personally experienced was a visit from Steve Ballmer, after all Vice President of Microsoft. He interrupted his skiing holiday in Switzerland to visit me. With his well-known enthusiasm, with which he dynamically jumps around on stage at conferences, he jumped around in my office and first of all praised the beauty of Munich. But then he said that I was making a catastrophic decision that I could never justify to anyone, especially not to a taxpayer.
Funnily enough, he constantly made new financial offers during the conversation, he talked about what Microsoft would add for free, for the school department for example. On and on he reduced the price, one million and a another million and a another million and a dozen million cheaper than before. This is how important Munich - which is internationally perceived as an IT center - was to Microsoft as a symbol.
Would [Munich] walk a new path or repentantly return into Microsoft's lap? We have calculated that Ballmer has improved the financial offer by around 35 per cent. But since we wanted to make a strategic decision and not just make a price comparison, this was not important to us.
Linux-Magazin: Bill Gates also came to visit?
Christian Ude: He was in Munich because of a presentation of the "House of the Future", which inspired him insanely. With it, you could determine from your car how high the room temperature in each room is and whether the refrigerator should defrost a bit. On his way back to the airport I had the opportunity to talk to him. So I sat together with one of the richest men in the world in a camouflaged van, which was luxuriously equipped inside, but looked from the outside as if it belonged to a small craft business. Gates asked me stunned: "Why are you doing this? That's absurd! That's incomprehensible!
Now that I'm not the hard-boiled IT specialist who could stand up to a Bill Gates in every detail, I just said:
"Please note, we're all about independence. We don't want to be dependent."
Then he said, "That's nonsense, who do you depend on?"
"Now that you are here [I can tell you]: From you, of course!"
That really made him collapse, and he said: "It's incomprehensible to me, it's ideology".