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01.23.07

Walmart Accepts Microsoft’s Stay-Out-Of-Court-Free Coupons

Posted in Deals, FUD, Intellectual Monopoly, Interoperability, Marketing, Microsoft, Novell, Ron Hovsepian, SLES/SLED, Steve Ballmer at 1:31 am by Shane Coyle

35,000 Coupons distributed to date

Walmart has apparently accepted a busload of Microsoft’s SUSE Linux IP indemnification, I mean support (I keep messing that up) coupons. If the assertion that 35,000 coupons have been distributed to date (and unless I missed an announcement or two), that means Walmart accepted somewhere in the region of 19,000 coupons.

“Customers tell us every day that they need to operate a cost-effective IT organization and leverage the most they can out of their investments,” said Ron Hovsepian, president and CEO of Novell. “Through our relationship with Microsoft, we’ve created new opportunities for enterprise interoperability and virtualization that ultimately result in real savings for our customers. We are delighted that Wal-Mart has chosen SUSE Linux Enterprise, and we look forward to collaborating with them for many years.”
By working together with Microsoft and Novell, Wal-Mart gains the ability to manage Windows and Linux by extending its existing Microsoft
management tool set and authentication platform: Systems Management Server, Active Directory(R) and Microsoft Operations Manager. Wal-Mart can also move to lower-cost commodity server hardware while simultaneously improving the customer experience.
“Customers tell us that they need interoperability and that they want their technology vendors to manage the underlying intellectual property issues in software,” said Steve Ballmer, CEO of Microsoft. “We are delivering this to Wal-Mart and giving them peace of mind so they can focus on their business and build for the future.”

One thing that caught my attention (besides Ballmer’s FUD) is that the press release characterizes the coupons as entitling Walmart to three years of priority support, which is counter to Justin Steinman’s statement: "First, Microsoft will purchase at least 70,000 certificates every year of the agreement for distribution to their customers. Each certificate entitles the recipient to a one-year subscription for software updates and technical support for SUSE Linux Enterprise Server. Distribution of these coupons will start immediately."

Confusion over the specifics of the deal amongst the parties who negotiated it? I, for one, am shocked.

Update: More information here regarding how Walmart intends to roll out SUSE and Windows Server for expanding their web presence, and although they are already a Red Hat customer, apparently Walmart has serious IP concerns about Linux, according to senior vice president and chief technology officer, Nancy Stewart:

She said the intellectual property protections in the Novell deal give Wal-Mart more confidence in using Linux more broadly.

Questions over intellectual property are a “huge problem,” Stewart said. The company now uses Linux in the data center of its current Web presence but had some trepidation with the idea of expanding it a much larger operation.

“To think about using it pervasively, we were very concerned about it,” she said. The larger Web operation would have “significantly higher legal exposure.”

Update 2 (Roy):

Intersting observations are being made by Mary Jo Foley:

Microsoft’s press release trumpeting Wal-Mart’s support of the Microsoft-Novell technology partnership announced last November omits some interesting details.

[...]

Not too surprisingly, Microsoft’s press release also doesn’t admit that Wal-Mart is a Red Hat Linux customer and is planning to supplement — not replace — its existing Red Hatsystems with Windows Server and SuSE Linux Enterprise Server.

Update 3 (Shane): Matt Asay also questions Novell’s allowing their sworn enemy to be their biggest reseller and provides some excellent insight into Wal-Mart’s acceptance of these coupons:

In the meantime, it’s nice to see that Microsoft’s COO hasn’t lost his Wal-Mart friends (he was CIO there, of course, before he joined Microsoft). It’s important to call a favor now and again. Whatever smoke and mirrors it takes to get by. :-)

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