"I've heard from Novell sales representatives that Microsoft sales executives have started calling the Suse Linux Enterprise Server coupons "royalty payments"..."

--Matt Asay, April 21^st, 2008

Summary: Brian Proffitt, former Managing Editor of LinuxToday, looks at the amounts of money Novell extracts from SUSE users for Microsoft and Novell to share

YESTERDAY we commented on a report suggesting that the ridiculous SUSE coupons run out about 2 years before the Microsoft/Novell patent deal actually expires. Over at IDG, some of the numbers are put together but nothing is said about the fact that these are akin to extortion money -- funds that Microsoft is taking from GNU/Linux users for software patents it claims they infringe without giving any details and without obeying the law, which explicitly forbids software patents in the large majority of the world.

And what an investment it has been: an initial payment of US$348 million to Novell... with US$240 million tagged specifically for those infamous subscription certificates for SUSE Enterprise Linux to hand out or resell to interested customers. Indeed, this was the thrust of the SD Times article: that Microsoft is almost through passing these coupons out.

The thought that was actually provoked came from this sentence in the article: "A total of 475 customers have used an unspecified number of coupons, according to Microsoft."

This struck me as a very interesting figure, because after firing up XCalc, I figured out that if indeed just 475 customers have received these coupons, then Microsoft has essentially subsidized SUSE Linux Enterprise Server (SLES) deployments an average tune of US$505,263.16 per customer.

Keep in mind that while we have no idea of how many actual single- or multi-year subscriptions were actually used with these disbursements, we can get a very rough idea based on Novell's current pricing structure of how many boxes this may represent.

This means money to Microsoft, not just Novell. So how much in royalties does Novell make from each sale of Windows? None? And if so, then what kind of a relationship is this? ⬆

"Now [Novell is] little better than a branch of Microsoft"

--LinuxToday Managing Editor