[Cialug] Novell Outlines Details of Agreement with Microsoft

[Josh More]

Below is a press release from Novell on some more specific information
on the MS deal.
There is also a FAQ at
http://www.novell.com/linux/microsoft/faq_opensource.html

My take:

1) Novell is working hard to clarify how this is consistent with the
GPL and to prevent
    MS from interpreting the agreement to benefit only them.  Time will
tell how
    successful they are at it, but I think they have a good chance.  A
better chance,
    in fact, than any other Linux/Open Source company I can think of. 
Novell is well
    positioned for this, having many high-level open source people
working for them
    (SUSE and Ximian), and having a business focus that allows them to
communicate
    with MS.

2) This deal is much more about interoperability for enterprise-level
clients than it
    is about IP and patent rights.  Much of the discussion on this
issue is on (my opinion)
    the wrong focus.  Simply put, being able to easily deploy virtual
Windows and Linux
    servers without paying a boatload in licensing fees or
implementation time benefits
    most everyone.

3) Admittedly, the part of the agreement "Microsoft agreed that for
three years, it will 
    not enter into an agreement with another Linux distributor to
encourage adoption 
    of Linux/Windows virtualization solutions through a Linux
subscription certificate 
    program." is limiting.  However, I can't think of another Linux
vendor that would
    want to enter into a Linux/Windows virtualization agreement with
MS, so I don't
    see any real impact here.

4) Novell clarifies that the "covenant not to sue" covers their
customers and does not
    indicate a recognition of MS's patent rights, so while software
patents line got a little
    thinner, I do not believe that it has been crossed.  Additionally,
it does not cover
    Novell and MS, so if they want to sue one another, they can. 
(Smart move for Novell,
    in my opinion.)

-- 
-Josh More, RHCE, CISSP, NCLP 
 morej at alliancetechnologies.net 
 515-245-7701


==== Press Release ====

Novell Outlines Details of Agreement with Microsoft 


Highlights companies' commitments to deliver value to customers 


WALTHAM, Mass. --  Nov. 7, 2006 --  Novell today published additional
details on the agreements announced with Microsoft on Nov. 2, outlining
the substantial commitment made by both companies to address customers'
growing requirement for Windows and Linux interoperability. The details
were made available by Novell in a filing with the SEC. The financial
terms of the agreements include payments for pre- paid SUSE Linux
Enterprise subscriptions, sales, marketing and development commitments,
and payments under the patent cooperation agreement. The company also
provided answers to a series of questions raised by the open source
community in an FAQ posted on its website. Novell reinforced its
commitment to working with the open source community and to fully meet
the requirements of the GNU General Public License ("GPL") which governs
the distribution of Linux and other free software. 


"The financial commitments Microsoft is making as part of this
agreement are significant," said Ron Hovsepian, president and CEO of
Novell. "This will help drive Linux more rapidly into the enterprise and
government arenas, broadly expanding opportunities for Linux and open
source. This is good for Novell, but it's also good for the community
because it will make Linux and open source much more prevalent and drive
demand for Linux- based solutions." 


As part of the business cooperation agreement, Microsoft will make an
upfront payment to Novell of $240 million for SUSE Linux Enterprise
Server subscription certificates. Microsoft may use, resell or
distribute them over the term of the agreement, allowing customers to
redeem a single or multi- year subscription for upgrades, updates and
technical support from Novell. Microsoft will dedicate $60 million total
over the five year period for marketing Linux and Windows virtualized
scenarios and will also spend $34 million over the five year term of the
agreement for a Microsoft sales force devoted primarily to marketing the
combined offering. 


Additionally, under the business collaboration agreement, Microsoft
agreed that for three years, it will not enter into an agreement with
another Linux distributor to encourage adoption of Linux/Windows
virtualization solutions through a Linux subscription certificate
program. IDC projects the market for virtual machine software to be $1.8
billion by 2009. 


Under the patent cooperation agreement, Microsoft will make an up-
front net payment to Novell of $108 million, and Novell will make
ongoing payments of at least $40 million over five years to Microsoft,
based on percentages of Novell's Open Platform Solutions and Open
Enterprise Server revenues. 


Novell also published answers to a series of questions raised by the
open source community regarding the agreements. A primary question
pertains to Novell's compliance with the terms of the GPL. As explained
in the FAQ and below, the patent agreement complies with the GPL. 


"Novell entered this broad set of agreements with Microsoft to further
promote the adoption of Linux," said Joseph A. LaSala, Jr., senior vice
president and general counsel for Novell. "Many people want to know
whether this agreement is compatible with Novell's obligations under the
GPL, especially section 7. This was an important consideration for us as
well. Under the patent cooperation agreement, Novell's customers receive
directly from Microsoft a covenant not to sue. Novell does not receive a
patent license or covenant not to sue from Microsoft, and we have not
agreed with Microsoft to any condition that would contradict the
conditions of the GPL. Our agreement does not affect the freedom that
Novell or anyone else in the open source community, including
developers, has under the GPL and does not impose any condition that
would contradict the conditions of the GPL. Therefore, the agreement is
fully compliant with the GPL." 


For years, Novell has been a leader in defending the open source
community from attacks by those who would harm Linux. Novell's strong
challenge to SCO, which began in 2003 and is ongoing, our debut of
indemnification of customers for possible copyright infringement claims
in early 2004, our patent policy adopted in 2004, and our co- founding
of Open Invention Network in 2005 all speak to our strong commitment to
the community. This latest business transaction, which promotes
interoperability between proprietary and open source solutions, takes
that commitment to another level, this time by focusing on the IT needs
of our customers. 


Additional answers to questions raised by the open source community are
available at www.novell.com/linux/microsoft/faq_opensource.html. 


About Novell 
Novell, Inc. (Nasdaq: NOVL) delivers Software for the Open
Enterprise(TM). With more than 50,000 customers in 43 countries, Novell
helps customers manage, simplify, secure and integrate their technology
environments by leveraging best- of- breed, open standards- based
software. With more than 20 years of experience, 4,700 employees, 5,000
partners and support centers around the world, Novell helps customers
gain control over their IT operating environments while reducing costs.
More information about Novell can be found at http://www.novell.com. 


Press contact: 
Bruce Lowry 
Novell 
(415) 383- 8408 
blowry at novell.com