Microsoft Loves Novell

Posted in Law, Microsoft at 11:30 pm by Dr. Roy Schestowitz

As proof of this, allow me to quote this:

Here’s part of what Allchin said about how to deal with the competitive threat from Novell then:

“We need to slaughter Novell before they get stronger….If you’re going to kill someone, there isn’t much reason to get all worked up about it and angry. You just pull the trigger. Any discussions beforehand are a waste of time. We need to smile at Novell while we pull the trigger.”

To quote further from the same article:

Conlin used a variety of computer-generated illustrations, including one that showed 15 icons, each representing what she said was an illegal action taken by Microsoft in pursuit of its bid to become and remain a monopoly. The icons had titles like “exclusionary contract,” “technical sabotage,” “buying out the competition,” “espionage,” and “deception and misinformation.”

So, can we truly expect Microsoft to change its ways and actually assist Novell after the deal was made? Let the readers and observers decide.

2700 Signatures and Climbing

Posted in Action, Petitions at 2:27 pm by Shane Coyle

Technocrat.net has an article by Bruce Perens in which he responds to some of the arguments that have been made by Novell (and others) in defense of the Microvell deal.

Two weeks ago I wrote a letter protesting Novell’s patent agreement with Microsoft and made it available for other people to sign. I expected 200-300 signatures for this rather technical matter about patents and licensing, but there are 2700 signatures as I write this, and the number keeps increasing. Many of the signers attached notes directed at Novell, filled with emotion. Obviously, the Free Software community feels very strongly about this issue. But Free Software is not the only party represented. Many of the signers identify themselves as recent Novell VARs and institutional customers who will now turn to another Linux distribution.

If you haven’t read the letter, you should do so now, as the arguments in it still stand. Since I wrote the letter, Novell and others have raised some arguments of their own, most of which are faulty. I’ll deal with them here.

Bruce goes on to shed light on the differences between the Indemnification offered by Red Hat or HP and the Patent Protection provided now by Novell, “Companies that offer indemnification don’t have a business relationship with the aggressor, just as insurance companies don’t make a contract with the local burglars to deter them from robbing certain houses.” and points out that Richard M Stallman has not "absolved" anyone that he is aware of. The article also show that while Microsoft may not themselves become a "patent troll", they could engage in the behavior by proxy.

Head over to technocrat.net for the full write-up, and if you haven’t yet, please sign Bruce’s Open Letter.

Finally, some suggest that we should not shun Novell for their actions as this would hurt the SuSE Linux distribution. This led me to quip that SuSE is the “human shield” of Novell, like the hapless civilians who are herded around some war target. If SuSE is worthy of continued existence, it will continue as Open Source software with or without Novell. The vast majority of the authors of the software in the SuSE distribution do not work for Novell – indeed, I’m one of them. And of course there are several other Linux distributions of similar or higher quality.

Boycott Novell.

When Your Sworn Enemy is Your Biggest Reseller

Posted in Deals, Finance, Marketing, Microsoft, Novell at 1:46 pm by Shane Coyle

Apparently, Novell is looking to make at least 2 more similar deals with "first tier vendors", this shifts the company’s focus from directly marketing to small and medium sized businesses, and will allow them to pare down their sales force.

Novell hopes to sign at least one or two more partnerships with similar first-tier vendors as it reassigns and lays off direct salespeople, especially those not working on Global 2,000 corporate accounts, Hovsepian said.

In a conference call, Novell CEO Ron Hovsepian refused analysts suggestions to sell off some of the unprofitable software units, and continued to try to spin the recent Microvell partnership as having a positive impact on Novell’s ability to do business, and insisting the community reaction is mixed rather than negative.

Hovsepian said the two companies started jointly marketing this month and noted that there are “several Linux deals that are accelerating due to the new partnership with Microsoft.”

At this point, it is clear that Novell is completely dependent upon their new partners, with their financial projections for upcoming years seemingly completely tied to the Microvell deal and the anticipated spoils of the partnership:

The company said in a conference call that combined OES and NetWare revenues should continue to fall 15% to 20% year over year in fiscal 2007.

Novell predicts 2007 net revenue of between $945 million and $975 million. On a non-GAAP basis, adjusted income from operations is expected to be between break-even and $10 million.

That includes about $13 million Novell expects to receive in fiscal 2007 from the five-year, $68 million patent agreement with Microsoft for Novell’s intellectual property, as well as between $4 million to $7 million in subscription revenue Novell hopes to earn from Microsoft customers who sign up for SUSE Linux subscriptions.

The marketing side of that deal is worth $240 million over five years. Novell hopes to book about $45 million from it in 2008.

So, if I understand that right, for 2007 they plan to come in between break even and $10M, as long as they reap at least $4M in subscription revenue from those Microsoft certificates, and the $13M from the patent cooperation agreement. That means, sans the deal, they would be projecting losses of at least $7M, no? (I am not a finance guy, can you tell?)

If Novell is so vulnerable, why didn’t Microsoft just buy Novell out, rather than partner with them? Perhaps because a completely dependent Novell is preferable to none at all, and it wouldn’t be the first time that Microsoft used a proxy to advance its agenda.

Does Novell Tweak Linux Figures to Hide the Bigger Picture?

Posted in Deception, Finance, Novell at 11:07 am by Dr. Roy Schestowitz

The respectable Matthew Aslett, who is a Linux and Open Source advocate, certainly thinks so.

Dear Novell, please stop messing about with your Linux revenue figures. Thanks.


How can $13m be 32% more than $15m? What is the difference between “Linux platform products” and “Linux products and services”? I don’t know, but it is high time Novell stopped moving the goal posts and reported consistent figures for its Linux business.


$56m “Open Platform Solutions”
(including $43m Open Enterprise Server and $13m “Linux Platform Products and other open source products”

$57m “Open Platform Solutions”
(including $38m Open Enterprise Server and $10m “Linux Platform Products”

$12m “Linux Platform Products”

$13m “Linux Platform Products”

This looks pretty grim. In fact, it is also as grim as Microsoft’s attempt to hide reality using a $36 billion buyback, which gradually inflates the value of the stock.

Wall Street Confirms Who Gains from the Deal

Posted in Deals, Finance, Microsoft, NetWare at 5:14 am by Dr. Roy Schestowitz

First we had the analysts, but now we have some concrete figures and facts.

Novell earnings come up short

“Overall these are disappointing results,” said Jefferies & Co. analyst Katherine Egbert, citing the lower-than-expected quarterly sales figure and Novell’s 2007 sales outlook.

Novell used to have the Linux community by its side. I used to be a huge Novell and SUSE advocate myself. With its declining lagacy products, there is not much that can save Novell now. It is hard to imagine that the sentiments throughout the community will encourage acquisition of Novell’s Linux products. More intersting, Novell is killing the very same company that it is presently becoming.

SCO shares closed Monday at $1.11, down 11 cents and 9 percent from last Friday’s trading. The company’s stock has been in freefall since Kimball’s ruling, dropping from $2.40 per share. SCO stock had traded above $4.50 before Wells’ earlier decision in June.

Maybe SCO will find sympathy in today’s news. Novell seems to inherit its place and share the same problem. SCO has malicious intent, while Novell is just being naive.

I suspect it is too late to tell Novell to wake up and retract. It has already fallen too deep into this unhealthy relationship which emptied its soul.

This is (was) a Joke, Right?

Posted in Humour at 3:28 am by Shane Coyle

I stumbled on this "Press Release" the other day while googling for "Novell" and "Microsoft", I don’t think it needs much explanation – ITS HUMOR, PEOPLE. Although, sometimes I wonder…


Sarah Charf
Microsoft Corporation
(206) 882-xxxx

REDMOND, Wash. — April 10, 1995 –

In a joint press conference early this morning, the Chief Executives of Microsoft and Novell revealed that their companies had been working together to increase Microsoft’s dominance of the computer industry. In a secret partnership with Microsoft, Novell has been strategically acquiring Microsoft’s major competitors in the software industry and ruining them.

Groklaw: Why the Microvell Deal is Bad

Posted in Deals, Microsoft, Novell, SCO at 2:44 am by Shane Coyle

Groklaw has a great article explaining the significance of the Microvell deal, especially in relation to the SCO saga:

SCO was the first to try to get cute with the GPL on a grand scale, and as you will see, they do it with panache, with cases and arcane arguments, even some truly silly ones, like their antitrust allegations which another judge has already laughed out of court in a companion lawsuit. Sadly, SCO’s attempt to wiggle around the GPL turned out not to be the last. The Novell-Microsoft agreement also, as Richard Stallman put it, cunningly tries to sidestep GPLv2. So we have an attack from within. A serious one, because everything SCO and its backers wanted from this litigation, but failed to achieve, Novell just handed to Microsoft on a silver platter by signing that patent agreement. Let me explain why I see it that way.

The article goes on to compare the goals of SCO’s legal assault on Linux and the practical effects of the Microsoft-Novell deal, noting that they are nearly identical. Where SCO has failed in its attempts to invalidate the GPL in court, Novell has intentionally side-stepped the spirit of the GPL while (apparently) adhering to its letter.

It should be noted that in both the SCO and Novell instances, it is Microsoft who is the beneficiary. It is well known that Microsoft was behind the SCO saga, whether through their dubious license payment or their alleged involvement in guaranteeing Baystar’s investment in SCO. So, what they could not achieve via litigation by proxy, Microsoft gains through an agreement with a desperate company.

So there you have it, as I see it: two companies claiming to be Linux companies that turned on the GPL and the rest of the community for money, and the beneficiary is Microsoft. What a coincidence.

Does it matter that one did it maliciously and the other was merely a dope? I don’t know for sure which is which or even if either is properly described since I can’t read hearts, but my answer to the hypothetical question is: no. The effect is the same. It matters only in that one makes you mad and the second makes you sad and mad. That’s why I call it SCO2 Deja Vu, with Novell playing the part of EV1. Only this is far worse than SCO.

I agree, this is far worse than SCO because it appears that it will hold up to legal scrutiny, but it will not hold up to community scrutiny, unless we let it. Boycott Novell.

PJ Explains Novell’s Damage

Posted in Law, Novell, SCO at 2:03 am by Dr. Roy Schestowitz

Groklaw explains why Novell’s deal with Microsoft is bad news.

This is Groklaw’s 2,838th article. We now have 10,545 members, who have worked very hard to disprove SCO’s scurrilous claims, and we did. We succeeded, beyond my hopes when we started. But here’s the sad part. As victory is in sight, Novell signs a patent agreement with Microsoft…

This comes amid some criticism which suggests that Groklaw has gone too radical.

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