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.