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12.20.06

More than 16,000 Stay Out of Court Free Coupons Activated

Posted in Courtroom, Deals, FUD, GNU/Linux, Intellectual Monopoly, Interoperability, Marketing, Microsoft, Novell, Patent Covenant, Patents, Servers, Ubuntu, Virtualisation at 1:21 pm by Shane Coyle

Microsoft and Novell have announced that 3 large firms have opted to accept Microsoft’s stay out of court free coupons: Deutsche Bank AG, Credit Suisse and AIG Technologies.

REDMOND, Wash. and WALTHAM, Mass., Dec. 20 /PRNewswire-FirstCall/ — Deutsche Bank AG, Credit Suisse and AIG Technologies today became some of the first customers to tap the benefits of the recently announced collaboration between Microsoft Corp. (Nasdaq: MSFT – News) and Novell Inc. (Nasdaq: NOVL – News) on interoperability between Microsoft® Windows® and Linux.* Under three separate customer agreements, Microsoft will deliver to each company SUSE® Linux Enterprise subscription certificates, allowing these customers to take advantage of the Microsoft and Novell agreement. Credit Suisse, Deutsche Bank and AIG Technologies, which is a member company of American International Group Inc., highlighted the benefits of interoperability, the patent cooperation agreement and the road map for bidirectional virtualization solutions as the deciding factors in their choice.

Later in the announcement is the tidbit about “To date, more than 16,000 new certificates for SUSE Linux Enterprise have been activated under the Microsoft and Novell collaboration agreement.”, just after plugging the co-sponsored survey. It is not specified what percentage of the activated coupons are from these 3 customers.

I should note that during the Q&A session at the CITI forum, Stafford Masie also alluded to Microsoft actively distributing the certificates, so any theories that the coupons were to be "shelfware" seem to be disproven.

We’ve gotten Microsoft to buy $240M worth of Linux, ok, that’s 350K subscriptions of Linux, that’s awesome okay. So, they’re going to distribute that worldwide, and they actvely are in South African marketplace, I can tell you that today, they actually are actively doing it,so its a good thing that’s occurring for Linux…

The widespread adoption of Linux is absolutely great for the community, interoperability is great for the community, virtualization is great for the community; making a self-serving deal that puts you on the "good" side of anti-Linux FUD is detrimental to the community. Right now, the former does not outweigh the latter.

Fix the agreement. Stafford Masie has promised Novell will be GPLv3 compliant, including altering the deal if necessary. Even before that, we had heard that the patent covenant was undergoing review for possible revision.

Do it, and let’s move on, this whole thing started over losing a 4800 server deal, so to date it has paid off more than 3-fold for Novell. Stop FUDding and get back to competing on technological merit, rather than using this deal as a competitive advantage:

(Stafford Masie during the CITI Forum Q&A)

So, OK, let me paint the scenario and you tell me if I’ve got the context of the question correctly.

So, in that big deal, whatever it was – Ubuntu and Novell, and not Microsoft and Novell, and would we then use this agreement as a competitive edge and come up against you. Yes and no, OK?

If the customer does believe that there’s issues, concerns, etc because they have Microsoft interoperability stuff, I think the agreement might give us an edge, but its not an exclusive edge, and thats why we want to encourage Shuttleworth and the folks to go and do what we did, investigate what we’ve done, don’t be fanatical about it, but take a look at it.

Now, there are… y’know, I kinda want to say a few things here, and I think we’ve created the platform for it – we will compete, and I think competition amongst Linux vendors is good, it needs to be there… but we need to be responsible in our competing, lets make sure that we don’t compete to the detriment of both of us, because there’s someone standing looking over our shoulders wanting that to happen in a certain way. Microsoft is in the Linux game now, but they wouldn’t love it more than for this Linux thing to just implode, ok, they’d love that to happen also.

It’s kinda win-win for them, so we need to be careful how we compete, now will we utilize this patent portfolio? No, in fact we provide protection related to that. We’ll never use it against another Linux company, we never have – you’ve competed with me in South Africa and I’ve never utilized my…my legal indemnification, etc etc to outcompete you, we dont do that.

In fact, we’ve made it pretty clear on the website that we believe competition between technologies shouldn’t be based on the potential legal liabilities and FUD, it should be based on the technology merits of those solutions, and that’s how we want to compete.

Novell isn’t using their patent portfolio against other Linux companies, that is true. By virtue of this deal and their FUD, they are using Microsoft’s patent portfolio against other Linux companies, I fail to see the distinction.

Addendum (Roy):

Be sure to read the mind of the skeptics.

Anyway, what I continue to find completely baffling about this is why these companies are getting their SLES licenses from Microsoft. I know that they have an agreement and so they need to feed it, but why would Novell ever want to have its biggest competitor selling its software? And, in particular, why should existing customers now get their SLES licenses through Microsoft? From a purely practical standpoint, it looks a bit daft.

What I cannot help wondering, having come across a worrisome headline, is whether Microsoft will ‘pull an Oracle’ and offer discounted Linux support one day. You would have to agree that the following raises a brow: “Microsoft names three takers for its Linux support“.

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2 Comments

  1. shane said,

    December 21, 2006 at 12:33 am

    Gravatar

    So, apparently these are not new Novell customers, the whole thing is marketing FUD, why am I not shocked?

    Deutsce Bank AG, apparently they are big believers in IP:
    http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20061123:MTFH14279_2006-11-23_14-36-23_L23465328&type=comktNews&rpc=44

  2. shane said,

    December 21, 2006 at 2:08 pm

    Gravatar

    More evidence that the coupons aren’t migrations:
    http://www.eweek.com/article2/0,1759,2075125,00.asp?kc=EWRSS03129TX1K0000616

    Susan Hauser, Microsoft’s general manager of customer advocacy, told eWEEK Dec. 20 that no existing Microsoft software seats were lost under these three agreements.

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