Q&A: Novell CEO gives behind-the-scenes account of deal with Microsoft

November 30, 2006 Leave a comment

In a previous post I wondered what was on the mind of the execs at Novell after the recent Microsoft agreement. Computerworld has just posted a Q&A with CEO Ron Hovsepian. From the article:
How did the agreement with Microsoft come to pass? Who approached whom, and when? This past May, I picked up the phone and called Kevin Turner, the COO at Microsoft. I knew Kevin when he was the CIO at Wal-Mart. I said, “Kevin, I'd like to have a conversation about what the customer needs. If you could put back on your old hat as a customer, if I came in and started talking to you about virtualization on Linux, and this Microsoft guy showed up and started talking to you about virtualization on Windows, what would you say to us?” Kevin, being a good ex-IT executive, said, “I'd want both of those things together. I don't want the fighting; I don't want to deal with it. I'd tell you two guys to go figure out how to make it work.” I said, “Well, that's why I'm calling. How do we make that work around virtualization?”
My point of view is that customers are going to have J2EE stacks and .Net stacks in their shops. If I'm a CIO, that's what I'm dealing with: “What are you guys doing to make my life easier to make those things work together?” I saw virtualization as a key to us being able to do that in a different manner than we have in the past. That was the genesis of the whole conversation: calling up an old customer and having a conversation at the customer level. And then it took a lot of twists and turns.
and
What was your reaction when you heard about Ballmer's “undisclosed balance sheet liability” comments? Did you feel like you'd been blindsided? You don't want to get caught off-guard on any of those things. I do know things can be taken out of context, so I never overreact too far one way or the other. Obviously, I was disappointed, because the heart and essence of the deal was around the technology collaboration and what we want to get done for the customer. I know they're very committed to that — we've been having our regular conference calls with Bob Muglia [senior vice president of Microsoft's server and tools business]. We're right on our schedule to get all the details out in a reasonable time period.
We do not see any infringements, and we are not going to agree to any. Their desire to do some things around IP [intellectual property] came up as one of the things they wanted to talk about. We said, “Sure, we'd be happy to talk about some of those IP things,” because we have our own portfolio of IP, and we saw that when you look at the math, the balance of trade was $108 million to us and $40 million to them.
We never changed our position. All I cared about was, I lost a deal with a large retailer to Microsoft for the first time about 12 or 18 months ago. It was going to be an all-Linux deal, and I lost it because they were unduly influenced, in my opinion, to be fearful of these [IP and indemnity issues]. From my point of view that was really too bad, because Linux lost. Then I watched it happen three more times.
I think it's clear that Novell had good intentions going into this. I still question, from a business perspective, doing a deal like this with a company who has the record of Microsoft when it comes to business partnerships. It could be that it was perceived that this was the best way to keep Novell going. You can't fault anyone for that. I'm not sure this deal would have prevented them from losing the deals he mentions, and that's really the problem Novell is facing. We'll have to watch and see if they can turn things around.
–jeremy
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Filed under Linux, Main Page, Microsoft, Novell, Open Source

A Correction to a Recent OLPC Story

November 29, 2006 Leave a comment

In a recent post about OLPC I erroneously stated that Jim Gettys was a Red Hat employee. Dave Jones has kindly pointed out that Jim is in fact an OLPC employee. My apologizes for that and thanks for the correction.
–jeremy
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Filed under Linux, Main Page, Open Source, Red Hat

Credit Suisse Writes Off Novell

November 29, 2006 Leave a comment

A quick follow up on Novell. While I expected them to take a bit of punishment from the Open Source community for the recent patent deal some previous coverage, I didn't expect them to take any punishment from Wall Street. If anything, I expected them to get rewarded by the street. It looks like at least one analyst has actually downgraded them as a direct result of the deal though. From a sys-con article (which is an absolutely horrific site that very consistently crashes my browser):
Credit Suisse analyst Jason Maynard took down Novell on Monday grading it an “Underperform.” He reckons the flurry in its stock after its alliance with Microsoft was based on a “one-time event” – Microsoft paying Novell $308 million net – and that the 10% appreciation in the stock isn't sustainable.”
“Rather than provide a growth engine for the company,” he wrote in a note. “We think Novell's Linux patent deal with Microsoft will hurt the company's standing in the open source community. We don't see Microsoft providing a sustainable lift to Novell's distribution woes. With Oracle entering the market, we doubt there will be enough room to support needed Linux market share gains. Finally, Novell's legacy NetWare business continues to decline, and the level at which revenue can be sustained is unknown.”
Maynard figures Novell will spend Microsoft's money on acquisitions, both to diversify and to support its systems management and identity interests. He also figures Novell will restructure again but without any material upside.
Now it's clear that Novell is having some business issues. It's the reason they have a new CEO. To see “will hurt the company's standing in the open source community” in an analyst downgrade though is a first for me I think. I wonder what the C-level execs at Novell are thinking right about now?
–jeremy
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Filed under Linux, Main Page, Microsoft, Novell, Open Source

The French Say Au Revoir to Microsoft Software

November 29, 2006 1 Comment

The article title is a bit dramatic, but it looks like the French parliament is considering moving to Linux on both the desktop and server. From the article:
Starting in June of next year, French deputies will use desktops and servers running Linux, Mozilla's Firefox Web browser, and OpenOffice.org, a free open-source alternative to Microsoft's Office software.
For day-to-day documents, French members of parliament and their staff will use OpenOffice.org, currently in version 2.0.4 and designed to compete directly with Microsoft's Office System.
Why the change? The French parliament, composed of an upper chamber (le Senat, or Senate) and a lower chamber (l'Assemblee Nationale, or National Assembly), believes it can save money using open-source software, despite the near-term costs of switching from Microsoft systems and retraining all employees.
But that is a matter of some debate.
“The evidence on the cost savings attributable to a switch to Linux has been mixed,” according to Chris Swenson, director of software industry analysis at research group NPD. “There has been some evidence that companies have to spend a good deal on training and support after you deploy the operating system.”
The information is non-specific enough and far enough out that you have to wonder if they're just trying to get a better deal on Microsoft products. That being said, it's becoming clear that in the Government sector it's going to be the EU that leads the charge in Open Source adoption. The arguments for Open Source in Government are extremely compelling and something I've covered before. When you are controlling the data for an entire nation it's critical that you use Open Standards to ensure you have access to your own records in perpetuity. Controlling your own destiny in this context is critical. It's not a luxury, it's a requirement and it should be fairly obvious why being beholden to a single corporation is undesirable. If they do decide to move ahead on this, you have to assume that Mandriva (a French company) will make a very strong push. National Governments typically like to spend in their own country if it's at all possible.
There is one argument against leaving Windows and Office that I think is a bit over hyped these days. That's the issue of training. Yes, if you switch to OpenOffice.org and Linux you will have to retrain some users, especially the non-technical ones (which in almost any business are the majority). But looking at the upcoming versions of Office and Windows, they are sufficiently different from the older versions (especially in the case of Office) that you'll need to retrain those same users anyway! The incremental difference in training costs in this case is likely negligible and possibly nil. If you're looking to migrate to an Open Source solution, your next Windows and Office upgrade iteration is a perfect time to consider it. Keep in mind that staging the upgrade will likely gain you much better results with much less pain. OOo runs just fine on Windows. A switch from IE to Firefox and Office to OpenOffice.org will get your users comfortable with Open Source. Switching to Linux will then be much less of a change. After all, most people don't really “use” an operating system – they use the applications.
–jeremy
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Filed under Linux, Main Page, Microsoft, Open Source

Novell Dumps the Hula Project

November 28, 2006 Leave a comment

Conspiracy theorists of the Open Source community unite; Novell has just dropped official support for Hula shortly after announcing their agreement with Microsoft. For those unfamiliar with Hula, here's a snippet from the original press release just over 18 months ago:
BOSTON (LinuxWorld Conference& Expo 2005) — Feb. 15, 2005 — Novell today announced the formation of Hula, a new community project to create an open source collaboration server. The server will provide innovative calendar and mail functionality, filling a major void among open source offerings. Hula will be based on code taken from Novell's NetMail collaboration server product, an award-winning, proven technology foundation with an installed base of more than 4 million users.
Novell has donated the core components of NetMail to provide a starting point for the Hula project. Hula today includes standards-based e-mail, calendaring and address book functionality that can scale to 250,000 registered users on a single PC with 50,000 simultaneously connected users. Novell's contribution of such a significant product into open source – more than 200,000 lines of source code – demonstrates Novell's continuing commitment to promoting open source as well as the company's deepening involvement in helping to lead key community initiatives.
So do I think Novell ditching their Exchange replacement is directly related to the Microsoft deal? Realistically, probably not. I know it's hard for some to believe, but it's not always about Microsoft. The truth is, the project never really seemed to gain much traction. It's a shame, because an Open Source Exchange replacement is a critical missing piece right now. I can't emphasize this enough. Many shops I see use Windows (and in some cases end up ditching Linux in an effort to have only one server platform) solely because of Exchange. It's also a shame because Hula showed some promise. While I thought it was odd that they chose to rewrite some of the services instead of just using something tried and true like Postfix, some of the features Hula promised looked very nice. Luckily the project lives on and in the Open Source spirit I hope someone picks it up. Without a corporate sponsor though, it's unlikely a project like this will get much enterprise uptake. Luckily Zimbra just keeps getting better and better every time I look at it. With SOX compliance promised soon, Zimbra could be well positioned to give Exchange a run for its money.
–jeremy
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Filed under Linux, Main Page, Microsoft, Novell, Open Source

Oracle Linux, Distributions, Redux

November 28, 2006 1 Comment

It's interesting to read what a well known and well respected MySQL Employee has to say, not only about Oracle Linux specifically but about the state of Linux distributions in general. A couple snippets:
First, I'm really unhappy with the state of Linux distributions today. Its a tower of babel for the most part. Its a hope that the LSB will solve some of this, but today shipping on Linux is a real mess. Upgrading is a mess, especially for applications developed to rely on a stable platform.
Redhat ES is still the 800lb gorilla. Problem is that its too expensive when you get thousands of servers (or even a hundred). There was a day and an age where libc problems kept rearing their heads but that seems to be mostly over. I'm not going to pay what they want me to pay. They don't present me with a value proposition that I like. I used to buy one copy of it each time it was released to keep my servers upgraded, but I stopped that after RH9.
I'd like to see a winning Linux distribution, but right now the race is wide open as far as I am concerned. Fedora could improve on upgrades to the point where I was happy with it. Oracle could innovate and create a platform that ISVs would consider stable. Ubuntu could get a major win and we see sites move to it. Redhat could realize that they have created profit by creating a ceiling for adoption and find a new way to profit (since that ceiling is only going to drop…).
I agree with much of what he has to say. I've posted multiple times on what I think about RHEL pricing, so I won't get into that again. I've had considerably better luck than Brian with Debian it would seem and I would _never_ recommend you run Fedora on a production server (ever). I've also been meaning to take a closer look at rPath, and when I get a chance to I'll post an update. The fact that a MySQL employee is so openly willing to try a Linux distribution from a substantial competitor (I know, MySQL AB officially claims they are not competing with Oracle… I obviously disagree ;) really says a lot about the mentality of the average Open Source enthusiast. It's not just about squashing your competitors and creating your own silo, it's about technology, innovation, tinkering and curiosity. It's about creating genuine value and breaking down barriers, not holding clients captive and creating artificial barriers.
–jeremy
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Filed under Linux, Main Page, Open Source, Oracle

How many Microsofties does it take to implement the Off menu?

November 27, 2006 Leave a comment

Sparked by a post Joel recently made, Moishe Lettvin (a former Microsoftie now Googler) gives us a little insight into Windows development. From the post:
So that nets us a conservative estimate of 24 people involved in this feature. Also each team of 8 was separated by 6 layers of management from the leads, so let's add them in too, giving us 24 + (6 * 3) + 1 (the shared manager) 43 total people with a voice in this feature. Twenty-four of them were connected sorta closely to the code, and of those twenty four there were exactly zero with final say in how the feature worked. Somewhere in those other 17 was somebody who did have final say but who that was I have no idea since when I left the team — after a year — there was still no decision about exactly how this feature would work.
By the way “feature” is much too strong a word; a better description would be “menu”. Really. By the time I left the team the total code that I'd written for this “feature” was a couple hundred lines, tops.
But here's how the design process worked: approximately every 4 weeks, at our weekly meeting, our PM would say, “the shell team disagrees with how this looks/feels/works” and/or “the kernel team has decided to include/not include some functionality which lets us/prevents us from doing this particular thing”. And then in our weekly meeting we'd spent approximately 90 minutes discussing how our feature — er, menu — should look based on this “new” information. Then at our next weekly meeting we'd spend another 90 minutes arguing about the design, then at the next weekly meeting we'd do the same, and at the next weekly meeting we'd agree on something… just in time to get some other missing piece of information from the shell or kernel team, and start the whole process again.
What feature is he talking about you ask? It's the shutdown menu. The post in its entirety gives you a good idea of how thing work, but Joel sums it up nicely:
Every piece of evidence I've heard from developers inside Microsoft supports my theory that the company has become completely tangled up in bureaucracy, layers of management, meetings ad infinitum, and overstaffing. The only way Microsoft has managed to hire so many people has been by lowering their hiring standards significantly. In the early nineties Microsoft looked at IBM, especially the bloated OS/2 team, as a case study of what not to do; somehow in the fifteen year period from 1991 – 2006 they became the bloated monster that takes five years to ship an incoherent upgrade to their flagship product.
So why am I posting this? What does it have to do with Linux, or Open Source? 'Those Who Forget History Are Doomed to Repeat It'. Microsoft seems to have forgotten very quickly, and they are paying the price now. Let's learn from the mistakes of others and not repeat those mistakes. As Open Source projects get bigger and bigger, the chance for bureaucracy and layers of management become greater and greater. Luckily Open Source typically has a way of routing around issues like this, but as the likes or Oracle and Microsoft enter our world, it's important this case study isn't one we forget.
–jeremy
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Filed under Linux, Main Page, Microsoft, Open Source

Linux users to Microsoft: What 'balance sheet liability'?

November 22, 2006 Leave a comment

Continued coverage of a story I've been watching closely. Computerworld has an article the covers the reactions of a couple CIO's to the recent Microsoft-Novell agreement. From the article:
“I do not believe that my company has an “undisclosed balance sheet liability,” Russ Donnan, CIO at business information provider Kroll Factual Data, said in an e-mail response to questions from Computerworld about the Microsoft deal. Kroll Factual, a Loveland, Colo.-based subsidiary of global services provider Marsh & McLennan Companies, uses Red Hat Linux servers along with Windows servers in its data center.
Donnan, who described himself as “not a huge fan of software patents,” said “the threat of such a 'liability' would not in any way influence” whether Kroll would stick with Red Hat or move to SUSE or even Windows. “Steve Ballmer is posturing for mind share to enterprise executives, knowing it will have little to no impact on IT executives,” he said.
Barry Strasnick, CIO of North Quincy, Mass. financial services provider CitiStreet LLC, was even more emphatic.
“Like many IT executives, I took great offense to Ballmer's comments,” Strasnick wrote in an e-mail. CitiStreet uses Red Hat Linux widely in its data centers. “If Microsoft really thinks there is some code in Linux that violates their patents, they should publish those lines of codes immediately instead of just posturing in the press. [Fear, uncertainty and doubt] may have worked for IBM in the 1970s (some of us are old enough to have been around then), but not today.”
And Microsoft's assertions might be even backfire. “There were some applications I had been thinking about moving to a Microsoft platform, but this has now totally alienated me from Microsoft,” Strasnick said.
As mentioned in the last post, if Ballmer was using this as a litmus test, I think the response he got was clear. You'd think if Microsoft really thought they had a legitimate case, they'd probably have sued already. The problem is not only whether Microsoft code exists in Linux, but whether Linux code exists in Microsoft products. One litigation would set off a chain of others, and in the end I think we could likely get rid of any offending code (if there even is any) quicker and with less collateral damage than Microsoft could. Keep in mind that due to the Open nature of Linux code, patent violations are much less likely to exists than in the closed nature of Microsoft code where things can be hidden.
It's also good to see that the industry has gotten a bit wiser to these kinds of issues. I'd say in no small part due to the SCO case, industry tech executives are acutely aware at this point that claims like this are FUD. Not only that, you can see FUD now disenfranchises and alienates people. The industry may be at a watershed moment. One that marks the beginning of a time when the consumer is the one in charge, not the monopoly. We still have a long road ahead, but it's the rays of light like this one that recharge your batteries, rejuvenate your passion and remind you you're on the right path.
–jeremy
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Filed under Linux, Main Page, Microsoft, Novell, Open Source

Open Letter to the Community from Novell

November 21, 2006 1 Comment

Novell has released an Open Letter to the Community. From the letter:
Our interest in signing this agreement was to secure interoperability and joint sales agreements, but Microsoft asked that we cooperate on patents as well, and so a patent cooperation agreement was included as a part of the deal. In this agreement, Novell and Microsoft each promise not to sue the other's customers for patent infringement. The intended effect of this agreement was to give our joint customers peace of mind that they have the full support of the other company for their IT activities. Novell has a significant patent portfolio, and in reflection of this fact, the agreement we signed shows the overwhelming balance of payments being from Microsoft to Novell.
Since our announcement, some parties have spoken about this patent agreement in a damaging way, and with a perspective that we do not share. We strongly challenge those statements here.
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. When we entered the patent cooperation agreement with Microsoft, Novell did not agree or admit that Linux or any other Novell offering violates Microsoft patents.
Our stance on software patents is unchanged by the agreement with Microsoft. We want to remind the community of Novell's commitment to, and prior actions in support of, furthering the interests of Linux and open source, and creating an environment of free and open innovation. We have a strong patent portfolio and we have leveraged that portfolio for the benefit of the open source community.
I think it's clear that Novell may have underestimated the negative response from the community. They may also not have expected Ballmer to do this, which certainly made the situation worse for them. Having Novell stand up clear on the issue is a good thing, and should help to quell fears that Microsoft is using the agreement to plan something. Microsoft has already responded:
“Microsoft and Novell have agreed to disagree on whether certain open source offerings infringe Microsoft patents and whether certain Microsoft offerings infringe Novell patents. The agreement between our two companies puts in place a workable solution for customers for these issues, without requiring an agreement between our two companies on infringement.
“Both of our companies are fully committed to moving forward with all of the important work under these agreements. The agreements will advance interoperability between Windows and Linux and put in place a new intellectual property bridge between proprietary and open source software. Customers and participants throughout our industry will clearly benefit from these results.
“We at Microsoft respect Novell's point of view on the patent issue, even while we respectfully take a different view. Novell is absolutely right in stating that it did not admit or acknowledge any patent problems as part of entering into the patent collaboration agreement. At Microsoft we undertook our own analysis of our patent portfolio and concluded that it was necessary and important to create a patent covenant for customers of these products. We are gratified that such a solution is now in place.”
On the bright side here, if Microsoft was using this to test the water then the decisive and united response from the community and the rapid public response from Novell should have sent the correct message. We will fight for what we believe in, and will do so in an educated and organized manner.
–jeremy
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Filed under Linux, Main Page, Microsoft, Novell, Open Source

Microsoft CEO says Linux "uses our intellectual property"

November 17, 2006 3 Comments

That didn't take too long, did it. From the article:
In comments confirming the open-source community's suspicions, Microsoft CEO Steve Ballmer Thursday declared his belief that the Linux operating system infringes on Microsoft's intellectual property.
In a question-and-answer session after his keynote speech at the Professional Association for SQL Server (PASS) conference in Seattle, Ballmer said Microsoft was motivated to sign a deal with SUSE Linux distributor Novell earlier this month because Linux “uses our intellectual property” and Microsoft wanted to “get the appropriate economic return for our shareholders from our innovation.”
“Novell pays us some money for the right to tell customers that anybody who uses SUSE Linux is appropriately covered,” Ballmer said. This “is important to us, because [otherwise] we believe every Linux customer basically has an undisclosed balance-sheet liability.”
The full transcript of the conversation is also available. I think it's a little more clear now what Microsoft's intentions were with this deal. At least Ballmer is being a little more forthcoming than in some previous situations:
“So we built a technology bridge, and we built an IP bridge and a commercial framework that supports that. Novell said to us, 'Hey, look, if you're serious about this stuff, you better help us promote Suse Linux.' To which we said, 'You know we're trying to sell Windows, that's what we do for a living! Windows, Windows, Windows, baby! We don't do Linux that way here.'
“What we agreed, which is true, is we'll continue to try to grow Windows share at the expense of Linux. That's kind of our job. But to the degree that people are going to deploy Linux, we want Suse Linux to have the highest percent share of that, because only a customer who has Suse Linux actually has paid properly for the use of intellectual property from Microsoft.”
So the question becomes, will Microsoft move forward with litigation or are they just trying to create enough uncertainty in the Linux market to hinder Linux adoption. I'd guess they may not have a solid plan yet and it could potentially go either way. One thing that might hold them back from litigation is something a bit like the mutually assured destruction of the cold war. If they really start the patent suits flying then IBM, Sun and others (who also have massive amounts of patents) could retaliate. The result would almost certainly be ugly for Microsoft. The EU, and to a lesser extent the DOJ, may also be weighing on the mind of Microsoft if they were to sue. I'm sure they don't want any more monopoly headaches than they already have.
As for Novell, I think they are now realizing that the community is strongly against them. It will be interesting to see if this has any impact on their bottom line over the next 4 quarters or so.
–jeremy
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Filed under Linux, Main Page, Microsoft, Novell, Open Source, Red Hat

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