Microsoft and Novell in Landmark Partnership

Published: November 2, 2006

by Alex Woodie

Longtime competitors Microsoft and Novell unveiled a partnership last week designed to foster a greater level of interoperability between Windows and Novell's SUSE Linux distribution. The companies say the partnership resolves several long running issues, including difficulty in managing joint Windows-Linux environments, as well as patent and intellectual property issues regarding co-existence of the two operating systems. Microsoft also issued a covenant not to sue individual developers of open source software.

The partnership between Microsoft and Novell encompasses technical, marketing, and legal angles. On the technical side, the companies say they will work together to ensure their respective operating systems work well in virtualized environments. This means a virtualized version of Windows will behave properly when being hosted on a Linux server, and likewise for virtual Linux images running on a Windows server. The companies also committed to improving the management of Linux and Windows servers through Web services, pledged to build translators that ensure compatibility of document formats in Microsoft Office and OpenOffice, and promised to make their respective directory products, Microsoft Active Directory and Novell's eDirectory, work better together.

On the legal front, the two companies have committed to provide each other's customers with patent coverage for their respective products. This means that Microsoft, which has an extensive patent portfolio, will not sue its customers when, for example, they incorporate a Microsoft standard, such as the capability to save a document in the Word format, in an open source application distributed under the GPL license. Likewise, Novell, which also has a considerable patent portfolio, will not sue; however, it was Microsoft that had the greater problem with use of its intellectual property, particularly when used with open source products distributed under the GPL license.

The partnership also has a sales and marketing component. The companies won't distribute each other's products, but Microsoft will distribute 70,000 coupons for SUSE Linux Enterprise Server to its customers, the companies said. The agreement is valid through 2012.

Microsoft CEO Steve Ballmer hailed the agreement as a step forward. "The new collaborations were really only possible through breakthrough work that created an interoperability bridge between the open source and proprietary source models. Obviously those models are very different, and people have struggled to find a way to bridge them," he said during a press conference from San Francisco and broadcasted over the Internet. "For anybody that runs a mixed Linux-Windows [environment] this is good news. We're going to raise the bar in terms of interoperability. We're going to make it easier for users to manage these mixed environments."

Ron Hovsepian, president and CEO of Novell, said customers are the big beneficiaries. "This really all came down to the customer and what we needed to do for the customer," he said. "That mixed source environment they're dealing with brings a whole host of benefits [but also] increased complexity."

Jeff Jaffe, Novell's executive vice president and chief technology officer, highlighted the benefits open source developers get from the deal. "Microsoft is not going to assert patent infringement claims against individual open source developers. That's really, really important for open source. Open source is in many ways the innovation engine for the entire IT industry. This statement makes it stronger," he said during the press conference.

The details about how the patent coverage deal will work are a bit shady at this point. In the announcement, the companies said they will both make "upfront payments" in exchange for a release from any potential liability. Later, there will be a "net balancing payments" between the two companies depending on how much they have sold. However, neither side is saying how much money is involved or what the payments will be.

Executives expressed hope that the system will become a model for others who want to combine open source and proprietary development models. "We had to think hard and work hard and be as creative as we could to find out how we could build an intellectual property or patent bridge between open source and proprietary software," said Brad Smith, Microsoft's general counsel. "It's a historic thing for the industry . . . we knew we had to figure out how to accomplish it. Customers told us they wanted us to find a way to solve the patent issues themselves so they wouldn't have to figure it out instead."

Hovsepian said he approached Microsoft's COO Kevin Turner with the idea. "I reached out to Kevin Turner in the April timeframe and suggested there was a relationship to be had," he said. Hovsepian said he used Turner's former job as the CIO of Wal-Mart to make a point about vendors not cooperating. "As a customer, you would have taken me [and the other vendor and told us to] get together and make this stuff work," he said.

The deal suddenly casts other distributors of Linux, particularly Red Hat, as outsiders. Microsoft's commitments for interoperability and patent protections only apply to Novell's SUSE Linux. Nothing has changed in regard to Microsoft's stance on all other Linux distributions--private individuals developing open source or contributing to open source projects notwithstanding.

Suddenly SUSE Linux has the inside track on Windows interoperability and a shield from potential patent infringement lawsuits from Redmond, while Red Hat and Oracle, with its new "Unbreakable Linux" strain, do not. Whether it's a clever form of "divide and conquer" or a legitimate pledge to help customers who happen to have selected SUSE instead of the many other Linux distributions, has yet to be seen.

SUSE is Microsoft's favorite flavor of penguin. "In terms of business cooperation, from Microsoft's perspective, we definitely want those customers who are going Linux to choose the Novell SUSE product line, "Ballmer said. "Consumers if they want to, they can go buy the best possible form of Linux, the one that gives you peace of mind and interoperability: SUSE Linux."

In case you think Ballmer is getting soft on Linux, the big guy has a single word for you: don't. "We're still competitors," he said. When he walks into a Linux shop, he'll still say "Let's get those Linux machines out of there and get Windows in here."