[sf-lug] Fwd: [conspire] Novell and Microsoft Agree to Sell Each Others Products: Bad News for Novell?

jim stockford jim at well.com
Tue Nov 7 08:42:19 PST 2006

(last sentence of message below:
"...the new ground they're breaking is probably Novell's gravesite."
"I hope so!")

> To: conspire at linuxmafia.com
> Subject: [conspire] Novell and Microsoft Agree to Sell Each Others 
> Products: Bad News for Novell?
> Interesting article...
> Below is an article  "Novell: We Surrender"
> by Daniel Lyons, of Forbes, 11.03.06, 11:45 AM ET
> I wonder how enterprise folk like SpikeSource are regarding this 
> development.
> _______________________________
> Three years ago this week, ailing software maker Novell paid $210 
> million to
> acquire Suse, a German version of the free operating system called 
> Linux.
> Novell hoped that by embracing Linux, an alternative to the decidedly 
> unfree
> Windows operating system from Microsoft, it could revive its dying 
> software
> business.
> On Thursday, Novell (nasdaq: NOVL - news - people ) effectively 
> conceded that
> this effort has failed.
> On stage with Microsoft (nasdaq: MSFT - news - people ) in San 
> Francisco,
> Novell announced that the two companies would cooperate to make the 
> Windows
> operating system and Linux work well together. More significantly, 
> Microsoft
> will resell Novell's version of Linux, and Novell will start paying 
> royalties
> to Microsoft in exchange for Microsoft's pledge not to enforce patent 
> claims
> against Novell and its customers.
> Novell tried to put a brave face on things, even claiming that its 
> chief
> executive, Ron Hovsepian, had initiated the talks with Microsoft. In 
> fact,
> Microsoft's lawyers have been quietly pressuring open-source companies 
> like
> Novell for more than a year and warning their customers that they 
> could be
> vulnerable to patent infringement claims because they're using Linux.
> By partnering with Microsoft, Novell protects itself and its customers 
> from
> such claims. Novell also gets a powerful new distribution partner: 
> Microsoft
> says it will sell Novell's Suse Linux to its own customers and aims to
> distribute 70,000 copies a year.
> Novell also gains a way to differentiate itself from Red Hat (nasdaq: 
> RHAT -
> news - people ), the leading Linux distributor, by offering better 
> patent
> protection.
> But Novell also is admitting it cannot compete on its own against Red 
> Hat.
> After two years of struggling, Novell holds only 20% market share of
> commercial Linux shipments; Red Hat commands virtually all of the rest.
> Although Linux itself is free, companies like Red Hat and Novell can 
> make
> money by distributing and supporting it.
> At yesterday's hastily called press conference in San Francisco, 
> Microsoft
> Chief Executive Steve Ballmer conceded that his customers want to use
> Linux--a Windows rival that Microsoft has spent the past decade trying 
> to
> squash.
> Developed collaboratively by programmers from around the world, Linux 
> has
> become wildly popular in corporate data centers, powering companies 
> like
> Google (nasdaq: GOOG - news - people ), Amazon (nasdaq: AMZN - news -
> people ) and many large Wall Street firms. It is a variant of Unix, an
> operating system developed in the 1970s by AT&T (nyse: T - news - 
> people )
> and considered more stable, though less user-friendly, than Windows.
> Ballmer said Microsoft's customers are demanding that his company make 
> its
> programs work more smoothly with Linux.
> But while the talk on stage was all about peace, love and 
> interoperability,
> Microsoft's maneuver also lets it divide the Linux market by driving a 
> wedge
> between the two biggest players. In fact, the Linux market is already
> splintering into many different versions, a trend that helps Microsoft.
> In addition to Red Hat and Novell, other popular Linux distributions 
> include
> Ubuntu, Xandros and Linspire. Just yesterday, as Microsoft and Novell 
> were
> announcing their pact, the radical Free Software Foundation was 
> releasing yet
> another version of Linux, called gNewSense. The foundation is also 
> working on
> a new license for Linux, which threatens to create even more 
> fragmentation.
> Microsoft's pact with Novell also cranks up the pressure on Red Hat. 
> Last
> week, that company came under a separate attack when database giant 
> Oracle
> (nasdaq: ORCL - news - people ) said it would start distributing its 
> own
> version of Linux--a free clone of Red Hat's software. Oracle also 
> intends to
> offer support to Red Hat customers for less than half of what Red Hat
> charges.
> Now, Red Hat must compete not only with Oracle but also with 
> Microsoft, which
> will be promoting Suse Linux and steering customers away from Red Hat.
> Nevertheless, Red Hat's publicity department cheerily proclaimed that 
> the
> Oracle and Microsoft announcements represent a terrific turn of 
> events. "It's
> fantastic news. Two of the main tech companies decided to get behind 
> Linux
> within six days. If that's not validation, what is?"
> Note to Red Hat: When companies start talking about Microsoft 
> "validating"
> their market, they're usually about to be validated out of existence.
> Same goes for ailing software makers that announce some triumphant 
> pact with
> Microsoft. These deals are like the Roach Motel. Companies go in and 
> never
> come out.
> Think about this: Novell now has signed as its biggest reseller a 
> company that
> wants nothing more than to kill its product.
> Microsoft has done this many times before, so often that Redmond has a 
> name
> for the technique: embrace, extend and exterminate. And yet people 
> keep doing
> these deals. Usually, it's weak, struggling, desperate companies with
> declining market share and little hope of turning things around. In 
> other
> words, just like Novell.
> On Thursday night, I asked Jeff Jaffe, Novell's chief technology 
> officer, if
> he could think of a company that had partnered with Microsoft and done 
> really
> well as a result. Which Microsoft alliance, I asked him, would he cite 
> as the
> model that he'd like to emulate?
> His response: "I think this partnership is breaking new ground."
> Um, right. Unfortunately, the new ground they're breaking is probably 
> Novell's
> gravesite.
> -- 
> Mark Weisler
> _______________________________________________
> conspire mailing list
> conspire at linuxmafia.com
> http://linuxmafia.com/mailman/listinfo/conspire
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