Microsoft News Tracker

Microsoft and Novell want us to know that everything is going swell with the interoperability collaboration deal they announced two years ago. So swell, in fact, that Microsoft is kicking in an additional US $100 million:

Microsoft Corp. and Novell Inc. are announcing an incremental investment in their relationship to meet accelerating customer demand for their business model solution, which is designed to build a bridge between open source and proprietary software to deliver interoperability and intellectual property (IP) peace of mind for organizations operating mixed-source IT environments.

The investment focuses on enhanced programs from Novell to provide tools, support, training and resources for customers seeking an enterprise-class Linux* platform and specifically, the optimal interoperability solution between Microsoft Windows Server and SUSE^® Linux Enterprise Server from Novell^®. It also includes Microsoft’s commitment to purchase up to $100 million in certificates that those customers can redeem for expanded support from Novell that includes SUSE Linux Enterprise Server support and support for moving toward an enterprise-class Linux platform. The investments will take effect Nov. 1, 2008, and between now and then Microsoft and Novell will solicit customer input and identify aspects of the support programs that will be most useful to organizations running mixed-source environments.

Customer response to the Microsoft-Novell model has been significant since it began in November 2006. As part of the initial five-year partnership agreement, Microsoft purchased $240 million of Novell certificates to sell to customers. Within 18 months, Novell invoiced more than $157 million in certificate revenues, or 65 percent of the original allotment. Customers who have already taken advantage of this opportunity to seamlessly run both Windows Server and SUSE Linux Enterprise Server include Wal-Mart Stores Inc., HSBC Holdings, Renault, Southwest Airlines Co., BMW and many other leading companies around the world.

Joe Wilcox delivers an astringent assessment and observes:

For a company with net revenues of $232 million during its fiscal 2008 second quarter and profit from operations of $2 million, Microsoft’s 100 million bucks should be useful.

I’ll say!

The deal allows Novell to exist in the shadow of Windows Server, sustaining on its table scraps. Microsoft can offer customers that simply must have some Linux servers a sanctioned source for good tools ensuring interoperability with Windows Server.

Of course, the real objection to the original deal by Open Source fans was the "patent cooperation" part of the agreement which Microsoft felt bolstered their assertion that Linux infringed on their intellectual property despite Novell’s statements to the contrary. It looks like the lovebirds have gotten over that honeymoon spat now and I’m sure we can look forward to more subsidies for Novell in the future.

Last month Microsoft announced the acquisition of data warehousing appliance vendor DATAllegro, but now there is a fly in the ointment in the form of a patent suit charging that DATAllegro’s key technology was "borrowed" by DATAllegro CEO Stuart Frost from a company called XPrime where he was previously CEO and where it was patented:

The complaint (PDF, 35 pages) was filed in U.S. District Court in San Diego by Cary Jardin, the founder of XPrime, who was issued a patent in February 2007 for a "System and Method for Generating and Processing Results Data in a Distributed System." Jardin had filed for the patent at the time Frost worked at XPrime, according to the suit.

The suit alleges that the "unauthorized use of Jardin’s intellectual property continues to this day."

With the acquisition still pending, Microsoft isn’t named as a defendant in the suit. The Redmond company referred questions to DATAllegro, based in Aliso Viejo, Calif. DATAllegro didn’t respond to requests for comment Wednesday afternoon.

This isn’t necessarily a deal killer, but you can be sure that the Microsoft lawyers are all over this one inserting insurance clauses in the final acquisition agreement.

Microsoft’s new “Flash killer” Silverlight technology has hit a speed bump as revealed in Ina Fried’s report that Gotuit Media filed suit July 2 in San Francisco Federal Court claiming that Silverlight violated several of its patents related to video metadata. Gotuit Media seems to be a real company (one of whose shareholders is Motorola) with real products and apparently the video metadata patents are among the company’s crown jewels. Microsoft says that they have not been served yet and have no comment.

There has been some commentary that Gotuit just wants to cut a piece of Microsoft’s Olympic pie for themselves, but while the Gotuit filing does mention the Olympics as an illustration of the use of video metadata, I see no evidence that they are trying for an immediate injunction before the Olympics start next month. Moreover, the suggested date for the case management conference is in October. None of this means that Gotuit’s claim is valid, but merely that this suit looks like more than a patent troll trying for an easy payday.

Catching up on some news beclouded by the Thanksgiving holiday in the USA, Microsoft’s appeal of a patent lawsuit judgement against it delivered by an East Texas jury was rejected on Nov. 16 by a federal appeals court:

Microsoft Corp. must pay more than $140 million for infringing on software patents owned by a Michigan-based technology company, a federal appeals court has ruled.

Z4 Technologies Inc. sued Microsoft and Autodesk Inc., maker of drafting software, in 2004, claiming the technology they used to activate newly installed software and deter piracy infringed on patents created and owned by David Colvin, the owner of privately held z4.

Paul McDougall has more on the issues at InformationWeek and Susan Decker has more on the eastern Texas venue at Bloomberg News, but as these things go, it looks like a fair cop.

However, Microsoft had some solace on Nov. 15 from the spanking handed out to notorious patent troll Acacia Research Corp. in another East Texas courtroom:

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In August of this year when Microsoft settled the long running Eolas patent dispute, I speculated that this would mean the end of the two-step activation of ActiveX controls in Internet Explorer that Microsoft had implemented to avoid the Eolas patent. That speculation was borne out today when Microsoft announced that the two-step will soon be over.

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