Bonum Certa Men Certa

Brent Williams on the Microsoft/Novell deal

Don Marti has posted a roundup of recent events in LinuxWorld. Among the interesting bits which he has scooped up there's this:

Lots of good stuffhere: "Red Hat knows that they have a premium brand, so ignoring people competing on price is the right strategy." Also covers "blowback" of the Novell/MSFT deal: "Customers aren’t worried about being sued for patent infringement." Plus why software isn't a commodity, when not to copy Red Hat, and more.


Don points at the following presentation from Brent Williams [PDF]. It is a very large presentation, but here is the content from just 4 slides that cover the Microsoft/Novell deal.




Microsoft “Endorses” Novell Linux
       In November, Microsoft and Novell announced a “patent
       cooperation” agreement that exempted Novell’s Linux customers
       from patent lawsuits from Microsoft against Linux
             Deal was carefully worded to avoid collision with GPL2
             Microsoft is paying Novell more for patent protection
             than Novell is paying Microsoft



Microsoft will pay Novell $240 million for discount coupons it can give to its customers to get them to switch to SuSE instead of “other” Linux distributions

۩ 2007 by Brent C. Williams; made available under the EPL v1.0




Results of the Novell-Microsoft Deal

Last week, Novell reported $91 million of invoicing for Linux

subscriptions, up 650% from prior year $73 million of this was multi-year deals from existing customers still under subscription $18 million in multi-year revenue less than the dollar growth in Red Hat deferred revenue quarter-to-quarter. So are they gaining share? Stock dropped 10% last week on earnings release, despite Linux results.

Novell management on the defensive Ballmer keeps accusing Linux of IP Infringement, not talking about benefits of Novell deal Novell management has to keep trying to “sell” deal as a good thing

۩ 2007 by Brent C. Williams; made available under the EPL v1.0




Solving the Wrong Problem, Again Novell thinks the problem is catching Red Hat Novell needs to formulate a brand identity for SuSE other than “We’re not Red Hat.” Customers aren’t worried about being sued for patent infringement Especially after the SCO lawsuit Solving the wrong problem at the wrong time Competitive alternatives to Microsoft exist in most of its key markets Sometimes they require a little work, other times, they are “drop in” replacements. Open source is the technology gaining share in all those markets. Open source community can get very good at defending against patent litigation very quickly. Prior art claims, third-party reviews, using Internet to help “patent busters” coordinate efforts. Real possibility that 100% of Microsoft patents will be attacked in initial counterstrike.

۩ 2007 by Brent C. Williams; made available under the EPL v1.0




Blowback. It’s a “beast” Reaction from open source community Jeremy Allison, Samba Project lead, quits Novell and goes to Google Novell cancels other open source projects GPL3 strengthened significantly to block similar follies in future Likely increase in shunning of Novell as project contributor because of possible patent “contamination.”

Geopolitical fallout grows Likely to influence course of patent legislation in Europe and other non-US geographies. Likely to result in further tacit or explicit government advocacy of open source.

Tacitly shows that even Novell believes it can’t stop Red Hat itself. Customers recognize the implicit admission of market leadership.





Brent Williams will hopefully not mind the use of just 4 of his slides. These insights are all noteworthy. The only part worth correcting is about Novell's finance. Novell has admitted 'massaging' the numbers.

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