* A look at Novell’s historic pact with Microsoft
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There were a number of small earthquakes reported in Utah a week and a half ago. Most commentators attributed them to the earth shifting along fault lines, but one or two of us thought it might be Ray Noorda spinning in his grave. After all, according to the book “Bad Boy Ballmer”, by Fredric Alan Maxwell, Ray once referred to Bill Gates and Steve Ballmer as “the Pearly Gates and the Emballmer: one promises you heaven, the other prepares you for the grave.”
On Nov. 2 the “Emballmer” stood on stage with Ray’s successor, Novell CEO Ron Hovsepian, and shook hands on a deal that was so unexpected that there were widely scattered reports of snowball fights in Hades.
Microsoft, it seems, was giving Novell a basketful of money in return for “coupons” good for SuSE Linux subscriptions and support which Microsoft could distribute as it saw fit – sell them, give them away, or simply build a bonfire.
The two companies would also collaborate on virtualization of each other’s operating systems – Windows and Linux running in virtual sessions on top of either Linux or Windows. There would also be collaboration that would more closely align Microsoft’s Office productivity formats with the open source world’s OpenDoc format.
A third component of the deal was some intellectual property mumbo-jumbo: Microsoft promised not to sue some open source programmers should they inadvertently infringe Redmond’s patent rights. And Novell promised not to sue Microsoft.
I spent a fair amount of time on the phone with Justin Steinman, Novell’s director of product marketing, Linux and Open Platform Solutions, who did what he could to put a happy face on the deal, and there are some happy aspects to it – if you don’t look too closely.
Novell does get a somewhat predictable five-year revenue stream. It also gets marketing help (to the tune of $60 million) from the best marketing machine in high tech. And it gets an “exclusive” distribution agreement – Microsoft has stated that it will not enter into any similar agreements with other Linux vendors. Or so, Steinman thought.
But Ballmer, speaking to India’s Financial Times the very next day, was quoted as saying: “We will love to put that kind of agreement in place with anyone who distributes Linux software – Red Hat, whoever else.” Is Microsoft already looking to renege? Novell’s press release about the partnership shows that what Microsoft is promising is that “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.” In other words, Microsoft is free to enter into distribution arrangements with other Linux distributors as long as the deals don’t involve coupons (i.e., “subscription certificates”).
Still, the biggest challenge to Novell could come from its erstwhile friends in the open source community. More on that next time.
