Microsoft signed the deal with Novell
Microsoft CEO Steve Ballmer, speaking at a conference in Seattle last week, said Microsoft signed the recent deal with Novell because Linux uses Microsoft's intellectual property and Microsoft wants to get the "appropriate economic return" for its innovation.
"We've had an issue, a problem that we've had to confront, and because open-source Linux does not come from a company -- Linux comes from the community -- the fact that that product uses our patented intellectual property is a problem for our shareholders," Ballmer said, according to transcripts of the speech released by Novell.
Big Bucks Deal
The deal with Novell involves an arrangement to increase the interoperability between the companies' competing software products and calls for Microsoft to pay Novell $440 million for coupons entitling users to a year's worth of maintenance and support on SuSE Linux.
In addition, Microsoft has agreed to recommend SuSE for Windows users looking for Linux options.
"We agreed on essentially an arrangement under which they pay us some money for the right to tell the customer that anybody who uses SuSE Linux is appropriately covered," said Ballmer.
"They've appropriately compensated Microsoft for our intellectual property, which is important to us," Ballmer went on to say. "In a sense, you could say that anybody who has got Linux in their data center today sort of has an undisclosed balance sheet liability, because it's not just Microsoft patents."
Not Everyone Happy
The controversial indemnity deal has been ripped in some corners, with critics accusing Novell of jeopardizing the future of Linux for its own short-term gains. Although Ballmer also said Microsoft is interested in creating similar deals with other major Linux distributors, including Red Hat, so far there have not been any other takers.
Red Hat maintains that it has already rejected a similar deal and considers such an agreement to be a form of intellectual property extortion. Red Hat has condemned the Novell pact as an "innovation tax" that could potentially "isolate communities or limit upstream adoption," according to a posting on the Red Hat Web site.
In his speech, Ballmer made it clear that, even with the agreement in place, Microsoft and Novell are still competitors.
Novell Rejects Ballmer's Claims About Linux
In response to Ballmer's comments, Novell CEO Ron Hovsepian issued a statement to the open-source community on Monday, in which he wrote: "We disagree with the recent statements made by Microsoft on the topic of Linux and patents. Importantly, our agreement with Microsoft is in no way an acknowledgment that Linux infringes upon any Microsoft intellectual property." He added that Novell has never agreed that Linux violates a Microsoft patent. But just as important, he wrote that "some parties" -- a none-too-subtle reference to Ballmer -- had made "damaging" comments and pushed "a perspective that we do not share."
The partnership lets Microsoft and Novell find ways for Windows and SuSE Linux, Novell's flavor of the open-source software, to work more effectively together. Few experts and open-source advocates have objected to that goal, but nearly all have decried the second plank of the Microsoft-Novell partnership that concerns patent infringement.
There, Microsoft agreed to pay Novell $348 million, and Novell agreed to pay Microsoft $40 million, in exchange for a no-litigation pact in which each firm agreed not to sue the others' customers for patent infringement. Microsoft has claimed that parts of Linux rely on technology that Microsoft owns under patent, but has not explained which parts it believes infringe on its rights, or even which Microsoft patents apply.
A Threat?
Some open-source advocates have seen those comments as a threat to disrupt the growth of Linux, which Microsoft sees as a challenge to its Windows franchise.
But not everyone agrees. "I don't think that they'll sway people away from Linux," said Michael Goulde, a senior analyst at Forrester. "I don't think that was the intention."
Instead, Goulde said he believes that Microsoft might be trying to bring more open-source vendors -- such as Red Hat, which Microsoft said it approached without success -- back to the table.
And above all, Redmond wants to defend its position and even flex its power. "It's more a matter of asserting," said Goulde. "They wanted to re-assert the importance that they place on Microsoft intellectual property. It's more flexing muscles."
"We've had an issue, a problem that we've had to confront, and because open-source Linux does not come from a company -- Linux comes from the community -- the fact that that product uses our patented intellectual property is a problem for our shareholders," Ballmer said, according to transcripts of the speech released by Novell.
Big Bucks Deal
The deal with Novell involves an arrangement to increase the interoperability between the companies' competing software products and calls for Microsoft to pay Novell $440 million for coupons entitling users to a year's worth of maintenance and support on SuSE Linux.
In addition, Microsoft has agreed to recommend SuSE for Windows users looking for Linux options.
"We agreed on essentially an arrangement under which they pay us some money for the right to tell the customer that anybody who uses SuSE Linux is appropriately covered," said Ballmer.
"They've appropriately compensated Microsoft for our intellectual property, which is important to us," Ballmer went on to say. "In a sense, you could say that anybody who has got Linux in their data center today sort of has an undisclosed balance sheet liability, because it's not just Microsoft patents."
Not Everyone Happy
The controversial indemnity deal has been ripped in some corners, with critics accusing Novell of jeopardizing the future of Linux for its own short-term gains. Although Ballmer also said Microsoft is interested in creating similar deals with other major Linux distributors, including Red Hat, so far there have not been any other takers.
Red Hat maintains that it has already rejected a similar deal and considers such an agreement to be a form of intellectual property extortion. Red Hat has condemned the Novell pact as an "innovation tax" that could potentially "isolate communities or limit upstream adoption," according to a posting on the Red Hat Web site.
In his speech, Ballmer made it clear that, even with the agreement in place, Microsoft and Novell are still competitors.
Novell Rejects Ballmer's Claims About Linux
In response to Ballmer's comments, Novell CEO Ron Hovsepian issued a statement to the open-source community on Monday, in which he wrote: "We disagree with the recent statements made by Microsoft on the topic of Linux and patents. Importantly, our agreement with Microsoft is in no way an acknowledgment that Linux infringes upon any Microsoft intellectual property." He added that Novell has never agreed that Linux violates a Microsoft patent. But just as important, he wrote that "some parties" -- a none-too-subtle reference to Ballmer -- had made "damaging" comments and pushed "a perspective that we do not share."
The partnership lets Microsoft and Novell find ways for Windows and SuSE Linux, Novell's flavor of the open-source software, to work more effectively together. Few experts and open-source advocates have objected to that goal, but nearly all have decried the second plank of the Microsoft-Novell partnership that concerns patent infringement.
There, Microsoft agreed to pay Novell $348 million, and Novell agreed to pay Microsoft $40 million, in exchange for a no-litigation pact in which each firm agreed not to sue the others' customers for patent infringement. Microsoft has claimed that parts of Linux rely on technology that Microsoft owns under patent, but has not explained which parts it believes infringe on its rights, or even which Microsoft patents apply.
A Threat?
Some open-source advocates have seen those comments as a threat to disrupt the growth of Linux, which Microsoft sees as a challenge to its Windows franchise.
But not everyone agrees. "I don't think that they'll sway people away from Linux," said Michael Goulde, a senior analyst at Forrester. "I don't think that was the intention."
Instead, Goulde said he believes that Microsoft might be trying to bring more open-source vendors -- such as Red Hat, which Microsoft said it approached without success -- back to the table.
And above all, Redmond wants to defend its position and even flex its power. "It's more a matter of asserting," said Goulde. "They wanted to re-assert the importance that they place on Microsoft intellectual property. It's more flexing muscles."
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