Ballmer: Deal with Novell doesn't mean total Linux embrace

'I'm still going to tell you [to buy] Windows, Windows, Windows,' says Microsoft's CEO

Microsoft Corp.'s deal with Novell Inc. to support SUSE Linux on machines that run Windows doesn't mean that Microsoft is embracing Linux wholesale.

"This is to bridge the divide between open-source and proprietary-source software," Microsoft CEO Steve Ballmer said at a news conference in San Francisco called to announce the move. "It gives customers greater flexibility in ways they have certainly been demanding."

But "if you want something, I'm still going to tell you [to buy] Windows, Windows, Windows," said Ballmer, who was joined at the announcement by Novell CEO Ron Hovsepian, other executives from both companies and customers.

Microsoft has agreed to offer sales support for SUSE Linux and co-develop technologies with Novell to make it easier for users to run both operating systems on their computers. Microsoft also plans to distribute to customers 70,000 coupons for SUSE Linux Enterprise Server maintenance and support.

"This is a fantastic announcement," said Andi Mann, an analyst at Enterprise Management Associates. "And to do it so quickly after Oracle's announcement really undercuts Red Hat."

Oracle Corp. announced last week that it would offer discount support to enterprise customers of Red Hat Inc.'s market-leading Linux operating system.

In a statement, Red Hat said, "Two of the most powerful technology companies in the world have made the decision to back Linux within the last six business days. That's great news, as it's even more validation for Linux. The world is moving technologically in our direction. Red Hat's in the best position to compete. We see the market moving past Linux and into middleware and SOA. This is our focus."

Microsoft has taken steps toward Linux and open-source before by opening a Linux technology center, providing Linux plug-ins for its System Management Server product and inking deals with open-source vendors such as MySQL AB, SugarCRM and XenSource Inc., said Mann.

The latest tie-up was Microsoft's strongest admission of Linux and open-source's increased popularity, he said. "Microsoft recognized that if they didn't play nice, they might not be able to play at all," he said.

As part of the deal, Microsoft will agree not to assert rights over patents to any software technology that might be incorporated into SUSE Linux. Protected under this are individuals and noncommercial open-source developers that create code and contribute to the SUSE Linux distribution, as well as developers who are paid to create code that goes into the distribution.

Brad Smith, senior vice president and general counsel at Microsoft, said it was difficult to come up with a "covenant" between the companies to marry open-source code and proprietary code. "But we sorted out the economics so Novell's customers don't have to," he said.

That said, under the patent cooperation agreement, both companies are paying each other upfront in exchange for a release of patent liability. Additionally, Novell will make running royalty payments to Microsoft based on a percentage of revenue from open-source products.

Basically, the agreement ensures that Novell SUSE customers are protected against patent litigation from Microsoft.

At the event, Smith declined to comment on whether Microsoft thought that Novell rival Red Hat's Linux distribution violates Microsoft's intellectual property. Microsoft has been relenting lately on its tight hold on patents through a program called Open Specification Promise.

Microsoft and Novell plan to work together on three key areas of technical collaboration: virtualization, Web services management and the Open Document Framework specification. Specifically, the companies will build technology for customers who want to run Windows on top of IT environments that primarily run Linux and vice versa, said Jeff Jaffe, Novell's chief information officer.

That targets virtualization market leader VMware Inc., Mann said, by "speeding up the trend of making the differences between running virtual machines on Linux or Windows negligible."

The announcement that Novell will make its eDirectory interoperate with Microsoft's Active Directory, the current market leader, also "takes a swipe" at both Oracle and Sun Microsystems Inc., which offer competing directory service software, Mann said. It particularly helps eDirectory, a once-dominant network directory product under its former name, Novell Directory Services. According to Mann, eDirectory is strong in identity management across multiple platforms, unlike Microsoft's Active Directory, which he said is most competent in Windows environments.

The companies will also build connectors between the open-source OpenOffice and Microsoft's own Office productivity software, which have different document formats, and work on integration between the companies' rival directory products.

Thursday's deal between Microsoft and Novell seemed eerily similar to one struck between Microsoft and Sun in 2004 that ended the Java dispute between the two companies and promised better interoperability. That deal was also announced with little notice. However, few concrete effects of that agreement have been seen in the industry since it was announced.

The deal between Microsoft and Novell comes as another blow for Red Hat. The plan for Oracle to sell technical support for Red Hat Linux both validates Red Hat Linux while undermining Red Hat's own support and maintenance business. Red Hat is the leading supplier of Linux and the biggest rival of Novell's SUSE Linux distribution.

Novell is one in a line of companies that has been forced to change its core business because of Microsoft. Novell built its business on its NetWare network operating system, but the appearance of Windows NT as a viable alternative was a primary reason for NetWare's ultimate demise. In recent years, Novell has rebuilt itself into an open-source software company through purchases of companies such as SUSE Linux and Ximian.

The deal also will not only pit Microsoft and Novell against Oracle and Red Hat, but also IBM, which was an early supporter of Linux, particularly Red Hat's distribution.

Copyright © 2006 IDG Communications, Inc.

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