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Q&A: Novell CEO gives behind-the-scenes account of deal with Microsoft

Ron Hovsepian described 'a love-hate thing' between the two companies

By Don Tennant
November 28, 2006 12:00 PM ET

Computerworld - The landmark technology collaboration agreement between Microsoft Corp. and Novell Inc. that was announced earlier this month took a controversial twist when Microsoft CEO Steve Ballmer later proclaimed that Linux customers have "an undisclosed balance sheet liability" because Linux "uses our intellectual property." Novell CEO Ron Hovsepian provided his views on the ensuing controversy, along with a behind-the-scenes account of how the agreement was reached, in an interview today with Computerworld e ditor in chief Don Tennant.

Excerpts from that interview follow:

How did the agreement with Microsoft come to pass? Who approached whom, and when? This past May, I picked up the phone and called Kevin Turner, the COO at Microsoft. I knew Kevin when he was the CIO at Wal-Mart. I said, "Kevin, I'd like to have a conversation about what the customer needs. If you could put back on your old hat as a customer, if I came in and started talking to you about virtualization on Linux, and this Microsoft guy showed up and started talking to you about virtualization on Windows, what would you say to us?" Kevin, being a good ex-IT executive, said, "I'd want both of those things together. I don't want the fighting; I don't want to deal with it. I'd tell you two guys to go figure out how to make it work." I said, "Well, that's why I'm calling. How do we make that work around virtualization?"

My point of view is that customers are going to have J2EE stacks and .Net stacks in their shops. If I'm a CIO, that's what I'm dealing with: "What are you guys doing to make my life easier to make those things work together?" I saw virtualization as a key to us being able to do that in a different manner than we have in the past. That was the genesis of the whole conversation: calling up an old customer and having a conversation at the customer level. And then it took a lot of twists and turns.

How would you characterize Microsoft's reaction? Kevin, true to form, said, "You're absolutely right; that is how my brain would think as a customer. Wow, that's pretty different, us working with you guys." There has been a love-hate thing for a long time between the two companies, meaning we both love to hate each other. So Kevin called [Microsoft CEO] Steve [Ballmer], and the rest of the team and approached it from a customer perspective. A week later we were all sitting in Chicago having a discussion about virtualization.

What was your reaction when you heard about Ballmer's "undisclosed balance sheet liability" comments? Did you feel like you'd been blindsided? You don't want to get caught off-guard on any of those things. I do know things can be taken out of context, so I never overreact too far one way or the other. Obviously, I was disappointed, because the heart and essence of the deal was around the technology collaboration and what we want to get done for the customer. I know they're very committed to that -- we've been having our regular conference calls with Bob Muglia [senior vice president of Microsoft's server and tools business]. We're right on our schedule to get all the details out in a reasonable time period.



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