Red Hat Response to Oracle and Microsoft/Novell Moves

Here's a response from Red Hat on the recent upheaval in the Linux world. My take? Half really good points, half disingenuous and/or ridiculous. First, the good points.
Last time I looked, we were still in ring, and we are still standing. The big mistakes companies and employees make is to be focused on stock price in the short-term.
Think back to the Microsoft/Sun announcement from a couple years ago, and today, you haven't seen any of the promised technical collaboration from that partnership whatsoever.
Novell has fallen into the trap of allowing Microsoft to do exactly what it wants to do, which is to trumpet IP (intellectual property) solutions and promises.

He's completely right. These days, far too many people focus on short term stock price. Vision and long term planning is almost a thing of the past. In the end, I think this will be the undoing of many companies – Open Source or not. Second, the highly touted and much hyped Microsoft/Sun announcement from a couple years ago didn't really create anything substantial that I can think of. Whether the Novell/Microsoft deal will bear more fruit remains to be seen, but they both sure did draw a lot of media attention. The last sentence I think speaks for itself.
On to the bad:
Having said that, does Red Hat think either of them has taken the right approach, now that Microsoft and Novell have made 'Microvell'?
We still believe that we will be the dominant player in the Linux market, because by that time there won't be any other Linux players. We will have succeeded once again.
This is not about IP. This is about the freedom to meet customer needs and to create competition. That problem is, you can be either for freedom and collaboration, or you can take a different approach. These companies are trying to do both. I can at least respect Microsoft, because they don't pretend to be an open source company.

The first sentence is a bit disingenuous. This was a partnership (and a loose one at that), not anything close to a merger that would warrant a 'Microvell' moniker. Stating they will be the “only” Linux player is odd on multiple levels. First, they have always claimed that not being the only vendor was one of the big advantages for Linux. Second, in what world will every other Linux player disappear in the next 365 days? I'm not sure where he was going with this one, but this is the kind of hubris that gets companies in trouble. The last one is a nice backhanded jab, but he should have just come out and said what he meant – in his opinion Novell isn't an Open Source company, even thought they claim to be.
I remain interested in how this will play out, not only for Red Hat and Novell; but for Linux in general. As you may have guessed, I'll keep you updated.
Red Hat, RHAT, Novell, Microsoft, Linux, Open Source
Edit: There is now also a more marketing slanted official response on the Red Hat site.

Responses from around the Linux Community

Here are some responses from around the Linux community on the recent Novell deal with Microsoft.
Eben Moglen thinks the deal may actually violate the GPL:
It's possible that Thursday's deal between Microsoft and Novell could conflict with a provision in the General Public License (GPL), according to Eben Moglen, the attorney for the Free Software Foundation that created and oversees the Linux license.
“If you make an agreement which requires you to pay a royalty to anybody for the right to distribute GPL software, you may not distribute it under the GPL,” Moglen told CNET Thursday. Section 7 of the GPL “requires that you have, and pass along to everybody, the right to distribute software freely and without additional permission.”
Whether the partnership precludes Novell from distributing Linux depends on precise terms of the agreement that Moglen hasn't seen, he cautioned. But he found other aspects of the deal troubling, too.
Microsoft's pledge not to sue unpaid programmers is “no comfort at all,” given the quantity of paid open-source programmers.

If the deal will have a material impact on Novell earnings (and I'd guess it does), there will have to be a filing on this in the coming weeks, so Eben and others may get the information they need to make an informed decision on this potential GPL violation. If the deal does indeed violate the GPL, I'm not sure how Novell will proceed.
Bruce Perens seems to have similar concerns:
One of the questions yet to be settled is whether Novell will violate the GPL, the license of the Linux kernel and other important software, by offering patent protection that is exclusive to Novell customers. The press release pretty much stated that. On that topic, the preamble of the GPL says it best:
We wish to avoid the danger that redistributors of a free program will individually obtain patent licenses, in effect making the program proprietary. To prevent this, we have made it clear that any patent must be licensed for everyone's free use or not licensed at all.
Novell has clearly accepted that license. But it appears that they are now out to make patent protection a business differentiator.

also from Perens:
“This is actually really bad news,” said Bruce Perens, a well-known Linux advocate. “It sets up Microsoft to assert its patents against all commercial open-source users. The deal is going to be, ‘You have to buy Microsoft-licensed Linux distribution from Novell or there is an implicit threat that Microsoft will assert their patents against you.”
It should be noted that Microsoft has opened this offer up to other Linux distributors, but to me that's of little solace. I'd not expect to see Red Hat sign a similar deal with Microsoft in the near future. Other community members seem less worried. From Linus:
I prefer to be an optimist, and will happily take the option that not everybody needs to be enemies,” said Linus Torvalds, the creator of the Linux kernel, in an e-mail message. “Let’s see how it all pans out.”
Greg KH, a Novell employee, thinks the media hype is much ado about nothing:
I don't really think this is a big deal at all for the Linux kernel community and code. We are no worse off than we were last week before this announcement, and we actually might be a bit better off now, depending on the actual wording of the agreement (which again, I have not read.)
I've still not formed a final opinion and am reading everything I can get my hands on. I couldn't, however, agree more with John Terpstra:
Instead of judging the book by its cover, we should sit back to weigh the facts, discuss this announcement in rational debate and then formulate a well-thought-out and united response.
That is spot on! The one bit of information that I did miss in my previous post is this bit:
Microsoft will make a one-time upfront payment to Novell for the cross licensing deal. Novell will pay a fee for each SuSE support contract that it sells.
Whoa! A fee for each SuSE support contract that it sells?!? That seems like a really bad precedent and certainly something that could lay the groundwork for future Microsoft litigation. Novell has now inextricably tied itself to Microsoft. I wonder if 5 years from now they'll look back on this deal fondly. Writing a monthly check to Microsoft isn't something I'd want to do if I were a Linux company.
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CentOS: Oracle Linux Doesn't Measure Up

An interesting Q&A with the CentOS team about their thoughts on Unbreakable Linux. From the article:
“Oracle [has] seen what has been achieved by projects such as CentOS, and [has] effectively copied the idea, as they are entitled to under the GPL,” said Lance Davis, one of CentOS's volunteer developers.
“There is evidence that in places Oracle is a rebuild of CentOS, rather than of Red Hat–again as they are entitled [to] under the GPL. [But] it would be polite for Oracle to acknowledge the fact that they are derived from CentOS and make a donation to the project.”
Johnny Hughes, a CentOS community member who is now testing the free version of Oracle's Enterprise Linux, told LinuxPlanet that the software is “poorly documented, extremely buggy, and of questionable security hardening.”

Lance was one booth down from us in the .Org Village at LWE UK and I still owe him an LQ shirt ;) The article also goes into some of the trouble users may have with the differences in Unbreakable and RHEL, including different patches and different build systems. I covered much of these in my previous posts on the subject, but I think it's good to get a perspective from a team that has built a respected RHEL clone for a long time.
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Novell and Microsoft Collaborate

As if the recent Oracle Red Hat talk wasn't interesting enough, Novell today announced that they will be collaborating with Microsoft. While some people seem to think this may have been a reaction to the Oracle announcement, I can't see any way this was thrown together that fast. I'd guess talks on this were ongoing even as the Oracle rumors were starting. The open letter is missing financial details as you may have guessed, but it does include some brief information on the 3 deals that were part of this arrangement. From the FAQ:
Q. What are you announcing?
Novell and Microsoft are announcing an historic bridging of the divide between open source and proprietary software. They have signed three related agreements which, taken together, will greatly enhance interoperability between Linux and Windows and give customers greater flexibility in their IT environments. Under a technical cooperation agreement, Novell and Microsoft will work together in three primary areas to deliver new solutions to customers: virtualization, web services management and document format compatibility. Under a patent cooperation agreement, Microsoft and Novell provide patent coverage for each others customers, giving customers peace of mind regarding patent issues. Finally, under a business cooperation agreement, Novell and Microsoft are committing to dedicate marketing and sales resources to promote joint solutions.

The agreement would seem to be a tacit acknowledgment by Microsoft that Linux is the real deal, has changed the rules of the game and is here to stay. As to what was actually gained by both sides. For Novell they are getting some increased exposure, which they desperately need right now. They are getting a resale deal for SLES (Microsoft will distribute as part of a resale arrangement approximately 70,000 coupons for SUSE Linux Enterprise Server maintenance and support per year) along with the recommendation of SLES by Microsoft if you are interested in running Linux in a Windows environment (For customers who have a significant Windows investment and want to add Linux to their IT infrastructure, Microsoft will recommend SUSE Linux Enterprise for Windows-Linux solutions). Additionally, their customers get patent protection for Samba, Mono and OpenOffice. Microsoft gets increased exposure for .NET through Mono, which should serve to help them compete better with Java in the enterprise space, and broader acceptance of the OpenXML document format, which could help them keep some of the Government contracts they may lose if OpenXML isn't broadly accepted. The companies will be working together on Virtualization, which looks to be a huge market going forward and have also built a “Collaboration Framework” which will allow them to work together more easily moving forward.
Shares of NOVL spiked almost 15% on the news, but are down about 1% in after hours trading. RHAT dropped about 2% on the news, with an additional 3% dip in after hours. The news had almost zero impact on MSFT. It should be interesting to see how both Red Hat and Sun react to this in the coming days. It will also be interesting to see how the Open Source community reacts to the news over the next 48 hours. It's a group that can be fickle at times and certainly one that isn't overly trusting of Microsoft. It's something I'll keep you updated on.
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Oracle and Unbreakable Linux III

This is turning out to be a hotter topic than I had anticipated, so I figured I post some additional thoughts I have. First, I'll expand on some comments I made in previous posts. Looking at the numbers it seems that Oracle accounts for about 15% of the RHEL business. Substantial, but not devastating. I also have two additions to my previous pricing comments. It should be noted that no enterprise customers pay (anywhere near) the published retail price for RHEL. That price is if you purchase a single license and have no existing relationship with Red Hat. Having dealt with Red Hat on behalf of many companies, depending on quantity the discounts can be significant. Moving back to Oracle, I'm still not convinced their customers are that price sensitive to the Linux bit of the equation. Looking at a loaded Oracle + RHEL solution for a quad processor box and you come up with roughly $200,000. Even at list price the Linux bit of that is close to $2,000 (RHEL AS is either $1,500 or $2,500, depending on support level). You have to wonder if Oracle customers will start looking closer at Oracle prices in general. In the end, this could result in those customers asking the hard questions and driving the price of other Oracle products down.
On another cost-related note, most external applications that an enterprise is going to be using are going to be certified against RHEL or SLES. Until (and indeed if) that certification is also applied directly to the Oracle product, it's always possible that odd and hard to track down bugs will be encountered. The same goes with any internally developed applications. The entire Q/A process will have to begin from scratch on the Oracle product. Additionally, if you already have an install base of RHEL and then add some Oracle, all new Q/A will need to be done twice to ensure things will work reliably and as expected. That Q/A cost alone, along with the uncertainty of how well Oracle will even be able to support Linux may keep many customers with Red Hat, at least for the short to mid term. It should be interesting to see if vendors like BEA and IBM certify against the Oracle product. Ubuntu is also trying to move into this space. In my opinion, 3 is the absolute maximum number of Linux vendors that many enterprise application vendors will be willing to certify. Who those 3 will be remains to be seen.
In the end, as I mentioned previously, I think this move really validates the Open Source model. The backing of Oracle at this level should rapidly further the uptake of Linux in the space, even if it's not via an Oracle solution. People don't want to be beholden to a single vendor any longer, and transitioning from RHEL to Oracle or Oracle to RHEL (or even using a mix of the two) will be much easier and less expensive then completely switching platforms (say, from Windows to Linux).
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Oracle and Unbreakable Linux II

I'm back from LWE UK and have had some more time to think about this. First, I still think Novell was the biggest loser here, not Red Hat. As Unbreakable Linux is basically a RHEL clone, it has further validated RHEL as the Enterprise “standard”. I think that will likely make selling non-RHEL solutions more difficult. Novell is going to have to be really compelling to get business now. I had wondered if Red Hat would lower prices in response to the Oracle move, but CEO Matthew Szulik has gone on record as saying they will not. We'll see if they keep that stance over the next two quarters or so. I also still feel that Red Hat should bring back an “updates only” product in the price range of $40-60/year/server back. They really lost a lot of fans and goodwill when they dropped RHL, but I think if the pitch is right many of them would come back. While RHEL is nice, it's out of the price range of many SMB's. If I were Red Hat that's not a market I would want to let another Linux company get a solid footing in (as of now no Linux company has any really dominance in this space). I think it's also a product that could sell well against Vista.
With the history Oracle has, one has to wonder if one of the main objectives for this announcement was to tank the Red hat stock price and make it an attractive acquisition target. The stock indeed tanked 25% on the news, but has been slowly chipping its way back up. Red Hat has announced a $325 million stock buy back as a result. If Oracle is in the Linux distro business for the long haul, you have to wonder how much penetration they can get from outside current customers. While this is a profitable segment for RHAT, it's certainly no death knell. Oracle seems to have put themselves in an odd position. If they do gain wild success they will end up losing the base of their own product. I'd guess that's a result of this being an emotional reaction to the Red Hat JBoss acquisition and not a well thought out business decision. An Oracle “appliance” that came with RHEL and Oracle preinstalled with support for the entire thing by Oracle would have been a much better solution IMHO, but that's just not Larry's style.
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