Microsoft News Tracker

Today, Novell provided a press release describing the financial details of their big deal with Microsoft announced last Thursday as well as trying to put out the fire they started in the open source community. Here are the financial details bulletized:

• “As part of the business cooperation agreement, Microsoft will make an upfront payment to Novell of $240 million for SUSE Linux Enterprise Server subscription certificates. Microsoft may use, resell or distribute them over the term of the agreement, allowing customers to redeem a single or multi-year subscription for upgrades, updates and technical support from Novell.”
• “Microsoft will dedicate $60 million total over the five year period for marketing Linux and Windows virtualized scenarios and will also spend $34 million over the five year term of the agreement for a Microsoft sales force devoted primarily to marketing the combined offering.”

How would you like to be on the Microsoft sales force selling this?

• “Additionally, under the business collaboration agreement, Microsoft agreed that for three years, it will not enter into an agreement with another Linux distributor to encourage adoption of Linux/Windows virtualization solutions through a Linux subscription certificate program.”

I don’t imagine that’s much of a give-up.

• “Under the patent cooperation agreement, Microsoft will make an up-front net payment to Novell of $108 million, and Novell will make ongoing payments of at least $40 million over five years to Microsoft, based on percentages of Novell’s Open Platform Solutions and Open Enterprise Server revenues.”

Novell must have really needed the net $68 million, but they may have to spend it on asbestos underwear before the open source crowd gets through flaming them (e.g. Perens: ‘Novell is the new SCO’).

Speaking of which, Novell tried to head off complaints from that quarter by mentioning their past support of open source in the press release and also by offering this FAQ. Sample:

Q3. Is this agreement an admission that Linux products from Novell infringe Microsoft patents?

No.

Patent concerns did not drive our entry into this agreement. Novell makes no admission that its Linux and open source offerings infringe on any other parties’ patents. Our position has not changed as a result of this agreement.

So why is Novell paying Microsoft at least $40 million over 5 years for patent cooperation? They claim it’s a covenant for Microsoft not to sue Novell’s customers. I’d suggest a large steamer trunk full of flame resistant undies, fellas.

As long as there are 4 million customers with Xbox 360s connected to their TV sets and to the Internet for Xbox Live, Microsoft might as well try to separate them from some more cash by offering downloadable movies and TV shows:

Microsoft Corp. today announced agreements with CBS, MTV Networks, Paramount Pictures, Turner Broadcasting System Inc. (TBS Inc.), Ultimate Fighting Championship (UFC) and Warner Bros. Home Entertainment to bring an initial lineup of over 1,000 hours of hit TV shows and movies to Xbox 360™ gamers in the U.S. by the end of the year. Furthermore, Xbox 360 will be the first gaming console to bring standard and high-definition TV shows and movies via digital distribution over the Internet directly to the consumer.

Beginning Nov. 22, on its first anniversary, Xbox 360 will be the first gaming console in history to provide high-definition TV shows and movies directly to gamers in their living rooms. Xbox 360 gamers will have access to the full-length TV shows as downloads to own and movies to rent via download from the Xbox Live^® network, the worldwide leader in online distribution of high-definition gaming and entertainment content. This announcement also brings with it several additional “firsts”:

• For the first time, consumers will get an integrated gaming and entertainment experience on a gaming console that includes downloadable high-definition TV shows and movies. This new full-length content adds to the ever-expanding number of choices gamers have on their Xbox 360, whether they want to play games or play a movie on a disc or as a download in high definition or standard definition.

• For the first time CBS will deliver high-definition download-to-own TV shows including “CSI,” “Jericho,” “Numb3rs” and remastered “Star Trek” episodes; gamers can buy them and watch them repeatedly.

• For the first time on any platform, NASCAR.COM will deliver download-to-own condensed versions of select NASCAR NEXTEL Cup Series races from “Race Rewind.”

• For the first time, the Ultimate Fighting Championship will make 50 of its most intense fights available for download as well as select episodes from the original season of “The Ultimate Fighter” reality series.

Heck, why not? There’s no shortage of vendors offering downloadable video for a fee - the only difficulty is that the user experience has been problematic and the cost effectiveness dubious compared to physical purchase or rental, or cable TV “pay-per-view.” Still, there will be some takers and it’s insurance against the Sony PS3 and its home entertainment aspirations. Head over to Ryan Block at Engadget for some of the pesky operational and technical details, but no pricing has been announced although it will be in Microsoft Points.