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November 2, 2006

Microsoft Novell deal on Linux?

Posted by David Hunter at 2:50 PM ET.

Microsoft has raised a media alert for a press conference at 2PM Pacific time where CEO Steve Ballmer will make “an industry announcement.” There are no more official details than that, but the Wall Street Journal is reporting (actual WSJ link here, subscription required) that Microsoft and Novell are entering into a partnership whereby Microsoft will offer sales support for Novell’s SUSE Linux and the two will work on technologies that make it easier for users to run both SUSE Linux and Windows. It sounds to me like a Microsoft Virtual Server deal in the same vein as Microsoft’s agreement with Xensource in July.

Update: The actual deal was rather bigger than I had guessed:

Microsoft Corp. and Novell Inc. today announced a set of broad business and technical collaboration agreements to build, market and support a series of new solutions to make Novell and Microsoft® products work better together. The two companies also announced an agreement to provide each other’s customers with patent coverage for their respective products. These agreements will be in place until at least 2012.

Removing the spectre of Microsoft patent lawsuits is nice for the Open Source crowd and I suppose vice versa, but here’s the fine print:

Under the patent cooperation agreement, both companies will make upfront payments in exchange for a release from any potential liability for use of each other’s patented intellectual property, with a net balancing payment from Microsoft to Novell reflecting the larger applicable volume of Microsoft’s product shipments. Novell will also make running royalty payments based on a percentage of its revenues from open source products.

So at one stroke, Novell gets cash and Microsoft establishes the position that Linux in some way infringes on Microsoft patents. Nice.

But wait, there’s more:

Under the agreement, Novell is establishing clear leadership among Linux platform and open source software providers on interoperability for mixed-source environments. As a result, Microsoft will officially recommend SUSE Linux Enterprise for customers who want Windows and Linux solutions. Additionally, Microsoft will distribute coupons for SUSE Linux Enterprise Server maintenance and support, so that customers can benefit from the use of an interoperable version of Linux with patent coverage as well as the collaborative work between the two companies.

I’m somewhat doubtful that Microsoft salesmen are going to be giving SUSE Linux more than a footnote for sheer personal economic reasons. Could you blame them? The fine print says that Microsoft is purchasing 70,000 coupons from Novell so my take is that this is merely another cash transfusion.

The two companies will create a joint research facility at which Microsoft and Novell technical experts will architect and test new software solutions and work with customers and the community to build and support these technologies. The agreement between Microsoft and Novell focuses on three technical areas that provide important value and choice to the market:

• Virtualization. Virtualization is one of the most important trends in the industry. Customers tell Microsoft that virtualization is one way they can consolidate and more easily manage rapidly growing server workloads and their large set of server applications. Microsoft and Novell will jointly develop a compelling virtualization offering for Linux and Windows.

• Web services for managing physical and virtual servers. Web services and service-oriented architectures continue to be one of the defining ways software companies can deliver greater value to customers. Microsoft and Novell will undertake work to make it easier for customers to manage mixed Windows and SUSE Linux Enterprise environments and to make it easier for customers to federate Microsoft Active Directory® with Novell eDirectory.

• Document format compatibility. Microsoft and Novell have been focusing on ways to improve interoperability between office productivity applications. The two companies will now work together on ways for OpenOffice and Microsoft Office system users to best share documents, and both will take steps to make translators available to improve interoperability between Open XML and OpenDocument formats.

I question how much of a player Novell is in any of these areas where there are already substantial ongoing efforts, but heck, why not share the love? Finally, the press release is replete with encomiums from executives at Intel, AMD, HP, Dell, IBM, and SAP, but it’ll be interesting to see how it plays in the broader Open Source community.

To net it out in one line: Microsoft bought some legitimacy in the heterogeneous environments that predominate in larger businesses while Novell got cash and perhaps a slight advantage in the Linux commercialization business.

Filed under Alliances, Coopetition, Linux, Microsoft, Novell, ODF, Open Source,, Patent Lawsuits, Patents, Standards, Virtual Server, Virtualization

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11 Responses to “Microsoft Novell deal on Linux?”

  1. Microsoft Novell deal analysis -- Microsoft News Tracker Says:

    [...] The seemingly startling nature of the Microsoft Novell Linux alliance deal announced on Thursday was bound to produce a variety of reactions. Below is a selection of those I found most relevant. Readers will recall my own prejudice that the deal basically amounted to Microsoft buying some useful PR from an increasingly feeble Novell. [...]

  2. Microsoft Novell deal financial details revealed -- Microsoft News Tracker Says:

    [...] 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: [...]

  3. The Microsoft Novell honeymoon is over -- Microsoft News Tracker Says:

    [...] I guess the glow is off the elopement of Microsoft and Novell that was announced and consummated on Nov. 2. The proximate cause seems to be Steve Ballmer’s public carrying on about Linux infringing Microsoft patents and the resultant furor among Novell’s relatives in the open source community who already weren’t too pleased with the nuptials. [...]

  4. Microsoft Novell deal keeps on giving -- Microsoft News Tracker Says:

    [...] Microsoft’s Linux deal with Novell is the gift that keeps on giving. The latest: well known developer Jeremy Allison resigned from Novell with the Microsoft Novell agreement as the proximate cause: The legendary Jeremy Allison (of Samba fame) has resigned from Novell in protest over the Microsoft-Novell patent agreement, which he calls “a mistake” which will be “damaging to Novell’s success in the future.” [...]

  5. Microsoft deal works out for Novell -- Microsoft News Tracker Says:

    [...] Novell’s much discussed deal with Microsoft last November not surprisingly turns out to have had a lot of significance for Novell’s financial results last quarter: Novell Inc. said Thursday that profit turned to loss during its fiscal first quarter and revenue fell 5%, while the company’s high profile partnership with Microsoft Corp. proved one of the only bright spots. [...]

  6. Xandros becomes 2nd Linux vendor to sign up with Microsoft -- Microsoft News Tracker Says:

    [...] Today, Microsoft and Linux distributor Xandros signed an agreement reminiscent of the controversial Microsoft-Novell deal. Microsoft and Xandros will work together on interoperability, Microsoft sales and marketing will tout Xandros as a “preferred Linux distribution,” and every body’s favorite part: Through the agreement, Microsoft will make available patent covenants for Xandros customers. These covenants will provide customers with confidence that the Xandros technologies they use and deploy in their environments are compliant with Microsoft’s intellectual property. [...]

  7. Linspire drinks the Microsoft patent Kool-Aid -- Microsoft News Tracker Says:

    [...] Microsoft added a third Linux distributor to its open source patent protection program today when they and Linspire announced a licensing and technical collaboration agreement. There are some novel aspects to the agreement, compared with the prior ones with Novell and Xandros, which reflect Linspire’s business model of shipping the Debian (soon Ubuntu) Linux distribution with proprietary add-ons that make it more acceptable for consumer desktop use. [...]

  8. Microsoft says GPL v3 does not apply to them -- Microsoft News Tracker Says:

    [...] Last Friday the Free Software Foundation released the GNU General Public License, version 3 and there have been a variety of reactions, not all enthusiastic. Since one of the avowed targets of GPL v3 was Microsoft’s recent patent deals with Linux distributors (e.g. with Novell and with Xandros), there was great anticipation for what Microsoft’s reaction would be to the final version. That reaction was announced yesterday and is basically the claim that GPL v3 does not apply and a move to make sure it never applies: [...]

  9. Microsoft and Novell open interoperability lab -- Microsoft News Tracker Says:

    [...] Microsoft and Novell today announced the opening of an interoperability lab in Cambridge, Massachusetts that had been promised in their collaboration agreement of last November. [...]

  10. Novell antitrust case against Microsoft continues -- Microsoft News Tracker Says:

    [...] Sometimes Microsoft and Novell are the best of pals, and sometimes they’re not as was demonstrated today when a US Federal appeals court let 2 of 6 claims in Novell’s antitrust suit against Microsoft continue to trial. These particular antitrust claims are related to Novell’s allegation that “Microsoft used its monopoly power to limit sales of WordPerfect, a word-processing program, and Quattro Pro, a spreadsheet program.” [...]

  11. Microsoft adds some more cash to Novell deal | Microsoft News Tracker Says:

    [...] 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 [...]

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