Novell's financial issues are a subject we have been exploring once again earlier this week. Primarily, past allegations of fraud and other scandals were looked at retrospectively, going months or years back in time to pinpoint events predating the deal with Microsoft. Prior to this, we also saw room for deception and admission of book-cooking.

Groklaw has just done another article which studies Novell's very latest report. To its investors, there is room left for doubt and plenty to be desired. There are inconsistencies. The post is long, but here is a portion of it.

As an investor, I want to consider all possibilities, which means having all material facts available. If I am missing material pieces, it's just guessing. I read conflicting reports about the deal, and I have no way to know which is true. You would need details. For example, we read that Microsoft bought certificates, for which it paid Novell now. So it looks like Novell just made $100 million. But once the vouchers are obtained by customers, then Microsoft gets some of the money the customer pays for the services and support, I'm thinking, or why would they do it? So exactly what is the figure that Novell really gets in the end? I have no idea, and I have no way to find out, unless they file the agreement with the SEC and let me read it.

So, what are the regulations? I had no idea, so I went to look. I hoped to be able to do some research and get a firm understanding, but the truth is, this is a subject that is, for starters, a little squishy in the wording of the regulation and a deep enough subject that lawyers and accountants who specialize in such matters go to conferences to try to keep up with latest developments in this area of speciality, so the odds of me figuring it all out in a couple of days are somewhere between slim to none. So I'll just show you the regulation, and the exception, and let those who understand all this better than I do figure out the answer to my question: why doesn't Novell have to reveal the terms of this agreement in a filing with the SEC? Or Microsoft? I may not know the answer, but I know it's the right question.

There was more relevant material in the news yesterday. According to John Dragoon, Novell continues to bleed cash on SLED, which is defeated by Free (libre and gratis) GNU/Linux distributions such as Ubuntu and PCLinuxOS.

Novell is losing money in the desktop Linux market, but those desktop deals are driving big wins in the server arena, according to Senior VP and Chief Marketing Officer John Dragoon.

One might wonder just how, despite Novell's losses in this area, the company is bragging to its investors. There is room for manipulation that we covered here before.

All that Novell has left now are those cash infusions, which are granted in exchange for favours.Novell sold out and became the vassal of Microsoft. Activities continue to revolve around .NET (or Mono), which makes Microsoft very pleased, not threatened.

.Net evangelist praises Mono for Linux

[...]

Prior to joining Microsoft about a year ago, Hansleman spent 15 years building banking systems and lived through the Web 1.0 bubble.

If Microsoft thinks Mono for GNU/Linux is good, then it must be advocating defeat for Windows, right? Or is this a trap, which also hurts Java et al along the way?

Another interesting discussion about Novell has been going on at Linux Today where GreyGeek wrote:

The agreement divided FOSS contributors into two groups: those whose contributions made it into Novell's commercial version of SUSE, and the rest of the FOSS community regardless of which distros they contribute to. The first group was proclaimed free from the threat of a Microsoft lawsuit. The second group is under the threat of a Microsoft lawsuit regardless of which distro they contribute too, even if they contribute to openSUSE but Novell doesn't add their contribution to SLES. However, the MAJOR thing Microsoft got out of this deal, AND FOR WHICH they paid Novell about a half a BILLION dollars, is a SIGNED agreement by Hovsepian that "Linux" (i.e., every distro on the planet) contains Microsoft IP, and for which Novell is paying Microsoft a ROYALTY on each and every copy of SLES that it sells. That ROYALTY is what Ballmer called the "IP bridge".

As long as Novell refuses to rescind the agreement they are party to this blatant attempt at hijacking FOSS/Linux, and to their damnable lie about MS IP being in Linux. As long as they keep getting money from Microsoft I doubt they will rescind the agreement. Novell fanbois who refuse to see the plain truth about this agreement are either no friends of FOSS/GPL or, in their misguided loyalties, they refuse to see and keep their heads up their collective rears to avoid the truth.

Novell did not merely sign a deal with Microsoft. It conspired because it needed the money. ⬆