Novell Goes Public with MS Patent Agreement Documents

May 27, 2007 Leave a comment

After a delay due to a stock option investigation, Novell has just filed its 10K. The filing includes, as attachments, documents from the recent Microsoft deal:

The text of the 144-page 10-K filing does not get into the specifics of the Microsoft deal, but it does include, subject to some redactions, the full three Microsoft agreement documents: the second amended and restated technical collaboration agreement, the first amended and restated business collaboration agreement and the patent cooperation agreement.

One of the most notable things about the report, according to Pamela Jones’ Groklaw Web site, is that it explains that Microsoft may be forced to stop distributing SUSE Linux coupons if the current text of the third draft of the GNU GPL (General Public License) 3 is included in the final license.

“If the final version of GPLv3 contains terms or conditions that interfere with our agreement with Microsoft or our ability to distribute GPLv3 code, Microsoft may cease to distribute SUSE Linux coupons in order to avoid the extension of its patent covenants to a broader range of GPLv3 software recipients, we may need to modify our relationship with Microsoft under less advantageous terms than our current agreement, or we may be restricted in our ability to include GPLv3 code in our products, any of which could adversely affect our business and our operating results,” the Novell filing said.

“In such a case, we would likely explore alternatives to remedy the conflict, but there is no assurance that we would be successful in these efforts,” the filing said.

That may explain why Microsoft has gone on the offensive about the GPLv3 during the past few weeks, claiming that free and open-source software infringes on 235 of its patents and directing its ire at the upcoming open-source license.

Keep in mind that the attachments do have redactions, which is standard operating procedure for releases like this. More details can be found on Groklaw.

–jeremy

Filed under Linux, Microsoft, Novell, Open Source

Nortel Strong Arms Open Source Vendor

May 25, 2007 Leave a comment

It’s hard to believe that stories like this are still so commonplace in our industry:

What happens when a VoIP blog (yours truly) writes about the fact that a former Nortel subsidiary (Blade Network Technologies) went looking for a new phone system, chose an open-source Asterisk-based solution from Fonality instead of using Nortel’s own PBX and then agreed to go on record on the VoIP & Gadgets blog about why they made such a shocking decision?

A) Nothing – it’s a VoIP blog – who cares? Nortel is an $11 billion dollar company that certainly doesn’t read blogs for their news.
B) Nortel reads the blog post, is a little peeved, but other than some emails sent internally, no one outside Nortel would ever know they were annoyed.
C) A Nortel Board Member flips out over the article, contacts Blade and then pressures Blade to return the Fonality system and have Fonality print a retraction to the blog article (and the subsequent press release).

If you answered C) congratulations, we have a winner!david vs. goliath nortel vs fonality Yes, it’s true – and in true David (Fonality) vs. Goliath (Nortel) fashion it would appear that we have Nortel peeved that one of their former subsidiaries chose an open-source IP-PBX (PBXtra from Fonality) and who had the audacity to speak to the press about why they made such a decision. Why, the nerve!

Now, I can see why Nortel wouldn’t be happy about the turn of events involved, or the fact that their market share is rapidly slipping (and has been for some time). Actions like this (read the article for in-depth detail) aren’t the way to fix the problem, though. Having a product that is at least good enough that your subsidiaries choose it is a start. It’s behavior like this that make the transparency and business models involved in Open Source so compelling for customers.

–jeremy

Filed under Open Source

OSBC Slides Posted

May 25, 2007 Leave a comment

If you weren’t able to attend OSBC, Matt has already started posting some of the keynote slides.

Sometimes a picture is worth a thousand words. The following is what happened to the performance of the E*Trade platform as they switched to Linux. They did the roll out in 2 phases, which accounts for the bump in the dip. In addition to the performance benefit, they saved roughly $16 million dollars. Not too shabby. It should be noted that during the recent February market dip, E*Trade was one of the only online brokerage sites that did not have performance issues. Lee directly attributed that to the use of Open Source.

Picture 7

–jeremy

Filed under Open Source, OSBC

Can We Trust Microsoft with Claimspace?

May 25, 2007 2 Comments

Ted points to Claimspace, a service I had never heard of but that looks compelling to me as someone deeply involved in “community management”. He also brings up a good point. Will people trust Microsoft with this data? As it’s due out in June (although a release that lets you xClaim an arbitrary URI won’t be released for 6-8 weeks after that), we’ll soon see. This is another indicator, though, of the position that Microsoft has gotten themselves into after many years of predatory and abusive behavior. Ideas that are very very good in some cases just aren’t doable by Microsoft anymore. There are a couple initiatives that I can think of that in my opinion were both phenomenally planned and excellently executed by Microsoft but failed miserably because of the trust issue many people have (even outside the Open Source realm) with MSFT. Many people within the company are diligently trying to change this. I see it at conferences all the time. Really smart Microsofties doing really interesting things. People who clearly get it. Try as they might, I don’t think many of the perceptions people have will change until there is a fundamental shift up top. Until that happens, what I wonder is how many of these really smart people will continue to toil given the current circumstances. Not an answerable question, of course, but Microsoft is at a very interesting crossroads right now. People forget just how much IBM was hated in the past (and not even that distant a past). So… what will people think of Microsoft in 5 or 10 years?

–jeremy

Filed under Microsoft

Novell, EFF Announce Patent Reform Partnership

May 24, 2007 Leave a comment

We were all quick to deride Novell when we perceived they did something that was not in the best interest of the community. I think it’s only fair that we point out when they do something that should be perceived as good for the community. I think they just have:

With all the controversy about software patents in the Linux technology space of late, it may come as a surprise to some people that one Linux company has today announced they will take unprecedented measures to assist the Electronic Frontier Foundation (EFF) in reforming the current patent system and eliminating bad software patents.

That company is Novell.

Novell made the announcement during a panel discussion at the Open Source Business Conference entitled “Is the Novell-Microsoft Deal Good for Open Source?”–a panel which included Novell’s Director of Marketing Justin Steinman and Sam Ramji, Director, Linux Labs, of Microsoft.

“EFF is partnering with Novell to try to get rid of software patents that are hurting innovation all over the world,” stated Shari Steele, Executive Director of the EFF in an interview prior to the panel session.

In essence, Novell is committed to working with the EFF to improve patent quality, while at the same time work to lobby with government agencies to reform existing patent policies and litigation, according to Nat Friedman. Novell’s Chief Technology and Strategy Officer for Open Source. Specifically, Novell will assist the EFF in two ways.

As previously mentioned, I was at that session and it was very interesting. There are two basic pieces to this agreement. The first is that they will work with and support the EFF’s existing Patent Busting Project, which targets existing patents that cover technology concepts that are perhaps too fundamental or already have prior art. The second piece will have Novell working with the EFF and legislators to lobby for patent reform, initially in the US, but also branching out to Europe, where patent problems continue to arise. The EFF and Novell will also work with standards groups to assist in patent reform. The EFF has confirmed that this is the first time a corporate entity has publicly thrown in this level of support for the EFF on the patent issue. Kudos to Novell. I’m surprised Nat didn’t play this up a bit more at OSBC (has was not on the panel for this session, but was in the crowd and was called upon by Justin to answer a question).

With the Microsoft-Novell deal slated to become public knowledge, with redactions, before the end of the month we will soon be able to put some if the previously missing puzzle together and see what implications there really are. One thing I think Novell has learned here is that increased transparency really would have eased this whole process. Let’s hope that’s not a lesson they soon forget.

–jeremy

Filed under Novell, Open Source

Second Day OSBC Wrap up

May 23, 2007 Leave a comment

The OSBC is now officially over and here’s my second day wrap up. The opening keynote consisted of Rob Curley, Marten Mickos and Lee Thompson. I had never seen Rob speak before, but he is extremely entertaining and had some very good information. He maintained that what him and his team were able to accomplish in Kansas would not have been possible without Open Source. Marten gave an update on where MySQL is and the variety of models he thinks can be successful in OSS. Lee gave a very good overview of how Open Source is being utilized at E*Trade. During the recent February market dip, they were one of the only brokers to not suffer performance problems. He attributed that to the use of Open Source directly.

How Big is the Exit? What is an Open Source Business Worth in 2007 and Beyond?
* There was a consensus that the public markets for Open Source companies are highly dependent on Red Hat. This is from a perspective that if Red Hat were to falter, the Open Source image would be sufficiently tarnished that other OSS companies would not receive new funding and valuations in general would suffer. I wrote about this a couple years ago. I think as time passes, this becomes less and less the case.
* Investors and VCs really seem to like to “subscription” model in OSS companies. I think it’s a very good model, but am less convinced it’s the one true path (one insinuated that OSS companies that tried something different were pretty much idiots for instance).
* With OSS you need to think about your customers with razor sharp focus. Find their pain points, solve their problems and you will be handsomely rewarded.

Is the Novell-Microsoft deal good for open source?
As you can imagine, this session was standing room only. Not hard to guess what the participants opinions were. LWN editor Jon – Bad. Novell rep Justin and Microsoft rep Sam – Good. The one surprise may have been Allison (if you don’t read her blog), who said it would probably be irrelevant. Some notes:
* Ballmer’s comments were definitely detrimental to the acceptance of the deal.
* If the deal would have been with someone else besides Microsoft, say IBM, it would barely have been news.
* Microsoft was the number one channel for SLES in Q1 2007.
* Microsoft has only gone on the offensive in patent litigation 2 times in its history. They are the defendant in about 30 cases or so in any one given point in time.
* Is Microsoft now a Linux distributor?
* AIG and BoA reps both seemed uninterested in the deal, saying it did not impact their buying decision.
* Would Microsoft consider joining the OIN?
* Customers are almost universally telling Microsoft that they want heterogeneous environments. 100%-anything seems to be a thing of the past

Community Development: Business Development for the 21st Century
* Open Source in a large way was started by disenfranchised developers
* For OSS companies, community management is about facilitation.
* Google lawyers actually have an SLA requirement for responding internally in some cases. Developers are that important.
* Many OSS communities are going from developers only to developers and users.
* The time and cost in fostering a community is easy to underestimate.

Overall a very good show, one in which I learned a good deal.

Note: For all these OSBC updates, items with * are not necessarily my opinions, just a summary of things that were said by various panelists.

–jeremy

Filed under Linux, Microsoft, Novell, Open Source, OSBC

"Is the Novell-Microsoft deal good for open source?" panel question

May 23, 2007 Leave a comment

I’ll post a full overview of OSBC day two later, but the “Is the Novell-Microsoft deal good for open source?” panel went over time and I didn’t have a chance to ask the question I had. From the panel, Justin from Novell indicated that Microsoft was the number one channel for SLES in 2007 Q1. My question is: do you think having one of your major competitors (one who is much bigger than you no less, and has a track record with these things) be your number one channel is (1) sustainable (2) sane (3) almost an admission of failure in being able to effectively compete in the marketplace on your own.

–jeremy

Filed under Linux, Microsoft, Novell, Open Source

Closing notes on the first day of OSBC

May 22, 2007 1 Comment

Overall I have to say I’ve really enjoyed the first day of OSBC. I’m getting an entirely different perspective on many things, which is good. It’s easy to get a bit insular when you are only exposed to a single side of an argument. After my last post, I noticed many more “community” members too, which is great. It’s amazing how often a few general themes have been brought up, even in sessions with widely disparate topics. A few notes from attended sessions:

What’s Next: Emerging Opportunities + Strategies
* It’s interesting that many Open Source projects do very little or no marketing, but have extremely powerful and well known brands. That’s one of the power of ubiquity.
* The value that can be derived from non-paying users should not be underestimated.
* Transparency, at all levels, is critical in an Open Source community. So is respecting user privacy and data.
* One reason cost per customer acquisition is less expensive is due to customer self-selection through quality experiences via gratis downloads.

A New Breed of P&L: The Open Source Business Financial Model
Larry gave an interesting look at the current state of Open Source software in relation to what he calls the golden age of software (mid80’s through late 90’s). His assertion is that things, such as the percentage of revenue spent on sales and marketing, have gotten way out of whack in the software industry. Open Source may be bringing us back to that golden age. Red Hat was one of his primary examples. More data will be available in the coming years, as the current crop of Open Source companies have a chance to mature.

Copyleft Business Models: Why it’s Good Not to Be Your Competitor’s Free Lunch
Eben is such a phenomenal speaker that I really can’t do this talk justice with a simple summary. However, here are some highlights:

* When he worked at IBM, software was a free lunch… used to sell hardware. Customers often submitted patches with their bug reports. For a variety of reasons this has changed in the current day and age, much to the determent of general software quality.
* An example of this is the comparison of how far hardware has comes since 1979. When IBM had 29G is took massive space and was very expensive. Now it takes up 2.5″ and is $40. Software on the other hand has almost become worse. He describes the situation as deplorable.
* An analogy for what the lack of standards can do. During the civil war, the north had a standard gauge for railroad ties. The south did not. This meant items often had to be unloaded just to be reloaded in the south. This became crippling and is an example of how much work can be wasted when there are no open and available standards.
* In his opinion, community adds a huge amount of value to a project, for a variety of reasons.
* The next draft of the GPLv3 should be Apache license compatible.
* With regard to the recent speculation about Microsoft, the GPLv3 and the fact that the Novell coupons do not expire; he can not say as much as he’d like, due to an NDA (one he thought would have expired by now, but hasn’t due to a Novell SEC filing delay). What he did say was that you need look no further than his actions and the actions of Microsoft to see what the Microsoft opinion on the matter is. He asserts they are quite concerned.

More to come tomorrow. Now to partake in the very nice spread that has been offered to all attendees.

–jeremy

Filed under FSF, GPLv3, Linux, Microsoft, Novell, Open Source, OSBC

More OSBC Coverage

May 22, 2007 Leave a comment

So far the OSBC has been interesting. It’s definitely much different than most shows I’ve attended. A much more business focus, with the number of people literally wearing suits at > 40%. For a while, I thought I was probably one of the only “community” type people here. So what were the odds when Jonathan Corbet, LWN executive editor, sat at the same table as me during lunch :)

A few takeaways from the sessions I attended:

Downloads to Dollars: Building a Revenue Stream from Free Product Traction

* People in proprietary companies are very surprised at how much less revenue per commissioned sales rep Open Source companies need. Since leads are pre-qualified in a much better manner (…at near zero cost) and people can actually get your software into production without you, when they do call it’s much easier to convert them to a paid customer. “Cold calls are a thing of the past”
* As Open Source crosses the chasm in a particular industry, being “Open Source” can be less of an advantage in that industry. At that point, being Open Source isn’t enough. You need to compete on features, scalability, ROI and all the other traditional competition points.
* Downloads is not the best statistic for commercial Open Source, but what the “right” statistic is realistically varies widely.
* Finding out how much information to gather and how to segment is absolutely critical, but also very dynamic.

Open Source in the Channel
* Your industry and role (VAR, ISV, vendor,partner, etc.) has a huge impact on your perspective on Open Source.
* Open Source puts much more importance on creating value for your clients. Building relationships becomes critical as up front revenue is not the same as in other models. The subscription model comes into play here.
* The only people that seem to care about patents are lawyers and the press. It’s not something business units seem to care about and none of the Open Source vendors on the panel had lost a major deal because of it. They did indicate that the main driver here was proprietary companies, whose business they were potentially taking, spreading FUD.
* Microsoft is really in a defensive mode. At one point in the panel, Sam Ramji (Microsoft Director of Platform Strategy) interjected from the crowd. While I thought he took the moderators comment out of context, I guess it’s possible that if you weren’t familiar with the facts you may have been confused (she was referring to SCO and not Microsoft), so clarification may well have been called for. The tone, wording and way it was done is what was interesting to me.

More to come later…

–jeremy

Filed under OSBC

OSBC Underway

May 22, 2007 1 Comment

The OSBC is officially underway. The opening keynote was the always interesting Matthew Szulik. I’m not sure who does the Red Hat short videos, but they are consistently both entertaining and compelling (even if some of the themes are reused quite a bit). Some interesting tidbits from the keynote:

* Open Source no longer needs to be validated
* Open Source has the ability to change IT from a cost to a value
* A long while back, while trying to get VC for Red Hat, someone asked Matt when he was going to “give up on this gimmick”
* In his opinion he feels that Open Source also has a social responsibility component. He gives as an example a research institute that had to ditch a decade of breast cancer research due to data incompatibilities
* He welcomes the competition from the likes of Oracle, and sees it as a management responsibility to compete…and not a technical issue
* He often feels in sales meetings that the crowd is divided – the 40+ crowd dislikes him (not personally, of course) and the 25-ish crowd thinks he’s pretty cool
* We are only at the beginning of the Open Source cycle… and cycles in this industry are the norm

–jeremy

Filed under Open Source, OSBC, Red Hat

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