Microsoft invests another $100 million in Novell and the people (should) rejoice

On Wednesday Microsoft announced that it was extending its partnership with Novell to the tune of $100 million and immediately the blogosphere alarms went off -- some accusing Microsoft of still trying to take down Linux and others accusing Novell of selling out. Same old same old. But if you are an enterprise with a Windows network, what it means to you is a source of enterprise-grade Linux that you know will work well with your Microsoft software for a nice cheap price. This thanks to the hefty subsidies paid by Microsoft to Novell. What's not to love?

And yet, the pundits remain confused. In just one example, Matt Assay writes in The Open Road blog on CNet that Microsoft's goal was, and still is, to kill Linux generally and Red Hat specifically. This additional $100 million investment somehow indicates a failure on Microsoft's part. He writes:

I used to rebuke Novell for its complicity in helping Microsoft with this deal, but I'm having second thoughts. Novell has never dampened its enthusiasm for Linux, though it has occasionally let its hunger for greater Linux revenue lead it astray in its marketing messages. People make mistakes. On the whole, however, Novell is playing Microsoft against Microsoft to its own profit, and has thus far done so with aplomb. Whether Novell can continue to pull it off is a different question, but for now both Novell and Red Hat continue to grow, and Microsoft is helping to feed that growth (at least, on Novell's side). The dummy, it would seem, is Microsoft.

Come again? (He also reports that Microsoft initially approached Red Hat with the partnership deal but was turned down -- which kills the theory that this all about killing Red Hat, doesn't it?) Microsoft's goal is to grow its business. If it is making money, that's all there is to it. Microsoft is, as we all know, not above playing dirty tricks to give itself a market advantage. But offering a version of Linux verified to work with Microsoft server products is serving the customer and ultimately, customers are lapping it up. They don't want to have to choose between Windows and Linux, they want both. By giving them an easy way out, Microsoft is helping its Windows Server 2008 business, not hurting it.

Microsoft may have intended a dirty trick with the initial deal, but so far, not happening. The company has stopped its ridiculous tantrum about Linux patents and it solidly looks like everyone is heading for a happy ending (or maybe a happy beginning). Now there's a lot of ifs in there. If Novell becomes overly dependent on Microsoft's cash, and if Red Hat stops growing and somehow disappears and if no other Linux distro rises in popularity, then Microsoft has given itself another nice monopoly. But come on ...

In fact an astute Network World reader commented that the additional $100 million investment makes a whole lot of sense if you do the math. The original agreement, penned in late 2006, covered five years and called for Microsoft to buy $240 million worth of certificates. Now, about one-third of the way through the deal's term, Microsoft has already burned through about two-thirds worth of certificates. Without agreeing to buy more, Microsoft wouldn't have enough to keep up with demand.

Need an operating system? You now have affordable choices galore. That's competition at work, a good thing.

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