11.30.07

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Novell OpenOffice.org, $348 Million, and the Story Nobody Covered

Posted in Apple, Deals, Finance, GNU/Linux, Linspire, Microsoft, Novell, Turbolinux at 2:22 pm by Dr. Roy Schestowitz

Or Novell’s equivalent of “Mac Office, $150 Million, and the Story Nobody Covered

This post was made possible thanks to a suggestion passed by a reader, who wishes to remain anonymous. He points out the resemblance between a decade-old Apple/Microsoft patent collaboration deal and the one Microsoft has with Novell.

The article “Mac Office, $150 Million, and the Story Nobody Covered” is not new, but nonetheless it’s interesting to look at the details one year after the Microsoft/Novell deal. One year ago we highlighted some similarities to the Apple deal and shortly afterward mentioned it again in the context of Corel. At the time, we did not know enough about the role of OpenOffice.org in this deal though.

Let’s go through the article and extract some points which are made about the Apple/Microsoft deal. We’ll comment about each of them in turn.

In July of 1997, the ongoing rivalry between Apple and Microsoft appeared to vanish with the announcement a new cooperative partnership that included:

1. a cross licensing agreement
2. a five year deal for continued development of Office for the Mac platform
3. the designation of Internet Explorer as the default Mac web browser
4. a small but symbolic $150 million investment by Microsoft in Apple

Sounds familiar? Well, point (1) is exactly what we find in the Microsoft/Novell deal. The patent promise was due to expire within 5 years.

In some of the other Microsoft deals (Turbolinux and Linspire at the very least), Microsoft products got embedded in the rival’s software, as in point (3) above. That serves Microsoft monoculture ambitions (de facto software and services).

The investment that is mentioned in point (4) can be equated to Microsoft paying Novell $348 million. Microsoft might argue that it’s due to cross-licensing imbalance, but Jeremy Allison opinies that Microsoft just needed to pay Novell to swallow a bug (analogy from an old interview).

Why did Microsoft invest millions in a partnership with its most obvious remaining competitor in the desktop operating system market?

In the case of Novell, that would be the Microsoft API (.NET/Mono), OOXML, software patents, FUD, and an ‘anti-Red Hat alliance’.

According to common legend, Microsoft was forced to pump millions in Apple to prop up the struggling rival as an apparent competitor to fool the Feds, who were hot on its tail leading up to the monopoly trial.

The government’s oversight is nearly ending (2007), so Microsoft must avoid extensions at all costs. The deal with Novell could truly get the Federal government off Microsoft’s back.

In addition to serving as an antitrust ruse, analysts, columnists, and sensationalists of all stripes have chimed in to add extra flourish to the legend of Apple’s rescue.

Equate this to the illusion that Microsoft had the upper arm ahead of the disaster called Windows Vista and litigation in Europe. From a technical perspective, SUSE Linux may have been more interesting than Windows Vista.

Legend Becomes Myth

As noted in Paul Thurrott’s Merciless Attack on Artie MacStrawman, it is fashionable among Microsoft apologists to insist that the company bailed Apple out in an altruistic act of compassion, and that any success now enjoyed by Apple should rightfully be delivered to Microsoft in tribute.

Microsoft ‘collaborates’ with Linux. How ‘kind’ of them. Patent tax, patent FUD, and OOXML forcefeeding come to mind.

Even doing very little, Microsoft could still make lots of money, keep Mac Office releases out of sync and well behind the Windows version, create compatibility barriers between the two Office platforms, and continue to leave long delays between releases.

That would enable Microsoft to slide along on fat Mac Office profits without much work, and would direct attention toward Windows, which would “obviously run popular programs like Office better!”

Think about OOXML and macros in OpenOffice.org, which are only available for Windows, not Linux. How convenient a way to suppress the adoption of GNU/Linux.

Microsoft had repeatedly used threats to delay or hamstring the next version of Mac Office as a bargaining tool against Apple.

The dependency has turned Novell into an obedient sockpuppet. Novell is Microsoft-dependent now.

Setting its products up as the default, pre-installed software choice was the whole basis for Microsoft’s monopoly business model. The company wanted to use the Mac platform to establish Internet Explorer and kill Netscape’s browser, ensuring that all web applications would need to be compatible with Internet Explorer, and thus providing a reason to buy Microsoft’s Internet Information Server product, and Windows NT servers to run it.

The deals with Linspire and Turbolinux contain elements that help Microsoft complete with Google. These companies link to Microsoft’s online services. Other elements, such as hijack of the Web with XAML, is something which Moonlight (via Novell) takes care of.

While Microsoft positioned Internet Explorer as a primary issue in its negotiations with Apple, the real reason Microsoft agreed to commit to Mac Office and lend some symbolic support for Apple with a stock purchase was to resolve outstanding patent issues.

Remember Microsoft’s deal with Corel, recall the ownership history of WordPerfect and then consider prior art and patents.

Microsoft paid Novell $539 million to settle its antitrust suit over the NetWare operating system, and Microsoft is still being sued by Novell over claims related to WordPerfect.

To sum up, Novell escapes litigation scrutiny in Europe, oversight in the United States, and legal issues involving Novell. Such deals have only one clear winner — Microsoft.

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