> I think Bavaria developed their own Linux distro instead of using an established one

Yes, with all their configs, packages and certifications that were needed. Not really a problem.

> It failed horrendously

Because Microsoft came in, promised to relocate their HQ to Munich, and surprise, it was decided to come back to Windows. This was after reports found that although it took longer than expected, adoption was widespread (only a small minority of desktops remained on Windows for the few Windows specific apps they had), things were working well, user happyness was good, stability was good, and tons of taxpayer money had been saved.