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There’s a Novell Idea: The Microsoft/Novell Q&A

Before I begin attempting to parse the Microsoft / Novell news from the day, I’d like to set expectations appropriately. More specifically, I need to lower them. I’ll be taking a comprehensive look at the announcement from multiple angles as is my habit, but there will be aspects to the announcement that I am unable to comment on at this time. Not unwilling, but simply unable for one of three reasons:

  1. I personally do not have an answer for the question, either because I failed to ask the right question or that I believed the answer would not be useful

  2. Because the answer is not and will not be known until a later date, either because precise reactions are impossible to anticipate or because full information is not yet available
  3. Because I am not qualified to comment

What follows, then, is the best commentary I can provide at this time given my knowledge level, current access to information, and legal qualifications. You may be thinking that this goes without saying, but I think it’s important to explain why I do not have all of the answers that you might expect and/or want. Also, I expect that some of the details below were understood imperfectly, and will require correction. Your patience in that regard is appreciated.

With all of that out of the way, here’s the Q&A that a couple of you have asked for.

Q: Big news in the software world, no? It’s been an interesting fall for software watchers. How big do you think this news is?
A: It’s significant, without question. Do I think it’s big in a “Red Hat is doomed” sense, or “this is a tacit admission that the Linux IP is tainted” sense? Not at all. It’s a significant alteration of the landscape – and a real boon for one project that I’ve been following for a while – but in and of itself means little. Could execution make this really significant? Certainly, but we’ll see.

Q: Before we continue, any disclaimers we should be aware of?
A: Neither Microsoft nor Novell is a RedMonk customer, though we have done paying work with Microsoft in the past. Several competitors to both, including Sun, are RedMonk customers, as are some of the partners that weighed in on the announcement, including IBM. That covers it, I believe.

Q: Ok, now how about a quick recap of the news for those that are just joining us?
A: There are quite a few moving parts to the deal. The two primary parties are the aforementioned Microsoft and Novell, and essentially they’ve finalized a deal that provides for:

  1. Patent Protection for each other’s portfolios & customers

  2. Joint development efforts around virtualization, web services management and document format compatibility
  3. Joint marketing and sales efforts

This agreement will be in place for 5 years; much was made of the “framework” for extending the deal at the termination of the current agreement, but a lot can change in 5 years so that’s a relatively trivial concern at the moment.

Beyond the agreement between these two commercial parties, Microsoft has also apparently asserted an irrevocable non-assert for its patent portfolio against individual users and non-commercial open source developers. This agreement is not subject to the five year termination, being irrevocable. Microsoft, in other words, does not intend to sue individuals.

Q: What have the reactions been to the announcement?
A: As you might expect, they run the gamut. GROKLAW and Simon are both skeptical of the motives and pessimistic about the implications, Shankland reports that the deal may be unlawful, Luis has some unresolved questions, while Matt believes it will have little impact specifically on Red Hat or the community more broadly. On the other end of the spectrum, Miguel’s excited about the impact it will have on Mono, Michael sees this being a positive for OO.o, and Jason contends that this is a validation of the notion that IP can facilitate rather than throttle collaboration between the open and closed software ecosystems.

Q: Lots to parse, obviously. Let’s start from the beginning: what prompted this partnership?
A: According to the vendors, this is merely the inevitable outcome of customer demand. If that’s true, however, it’s probably worth asking why it took this long to listen to the “all important” customers. Simon’s piece passes along the rumor that this was instead the product patent threats originating – counterintuitively – on the Novell side, but I have no information on that one way or another. My own guess is that this deal is driven, like most deals happen to be, by simple economics. Not the direct customer demand type of economics, but rather the big picture kind. As in the deal makes strategic sense for both Microsoft and Novell. It actually seems pretty straightforward, from where I sit.

Q: Is the deal good or bad? Do you subscribe to the GROKLAW/Simon interpretation, or are you seeing things from the deIcaza/Matusow/Meeks perspective?
A: It all depends on who’s asking. I think the deal contains both positive and negative implications, and that they must be considered separately.

Q: Ok, let’s start with the winners then: who stands to benefit from the deal, and what is the anticipated benefit?
A: I view the winners as:

  1. Microsoft:
    Obviously a winner here. They can expect to potentially receive a.) some kudos for their non-asserts for individuals, b.) the gratitude of the Mono community for removing the Damoclean sword that some believe hung over their heads (at least if you’re running SuSE), c.), a quasi cross-platform development story via Mono d.) a further disrupted commercial Linux market, which was already in flux following last week’s Oracle news, and e.) some cash. Not a bad haul, especially if Simon’s right and this all started with a Novell threat.

  2. Mono:
    Miguel’s clearly excited by this news, as he has every right to be. He describes the win here:
    So today we have secured a peace of mind for Novell customers that might have been worried about possible patent infringements open source deployments. This matters in particular for Mono, because for a long time its been the favorite conversation starter for folks that find dates on Slashdot.

    As someone who has been lobbying Microsoft for several years to embrace Mono, receiving a very cold reception on each occasion, I must confess that I’m quite surprised at this decision. In a conversation with one member of the media prior to the actual announcement, I expressed skepticism that Mono was part of the deal only to be proven wrong. This is a clear win for Mono, even if the commericial implementations are only protected on SuSE, and I’ll need to digest the actual implications of this at a later date.

  3. Novell:
    Novell has, as Matt notes in his piece linked above, made very little headway in closing the gap with market leader Red Hat. The past several quarters have seen considerable financial distress as well as the replacement of their CEO. The reasons for this are too numerous to go into here, but suffice it to say that Novell needed help shaking up the market. Oracle provided them with one such jolt last week, and this partnership will undoubtedly capitalize on the present uncertainty regarding Red Hat’s leadership role. This should impart Novell with, at a minimum, some short term momentum. How far they can take that depends on their ability to execute, which is industry analyst-speak for I don’t know whether or not they’ll be able to leverage it fully.

  4. Open Source Individuals:
    Sort of, anyway. Microsoft should be applauded for its promise not to assert patents over individual developers, because their pronounced public affection for intellectual property would seem to indicate that such an action would be unthinkable. But nor should we get carried away complimenting them; was it ever likely that they would sue invididual developers? Microsoft is populated (generally) by very intelligent individuals that are excellent at tasks such as cost/benefit analysis. Not only is the potential economic return from sueing an individual developer completely irrelevant from a fiancial perspective, the fallout from such legal bullying would be damning in the court of public opinion. For a firm that bills itself as a platform and tools company, litigating individual developers would seem to be pure folly. As my colleague pointed out this evening, only the RIAA lacks the intelligence to realize that suing ones customers is not good business practice. Say what you will of Microsoft, but they are not unintelligent. This is good, then, but self-interested good.

Q: Who loses from the deal, and why?
A: The losers, as far as I can tell at the moment, are:

  1. Red Hat:
    With all due respect to Matt, who is unquestionably one of the finer minds in the software world – open or closed source – Red Hat has had a tough two weeks. They’re far from doomed; it took Red Hat years to bleed Solaris’ installed base to the point that Sun was forced to make a life or death decision on the operating system, and it would likewise take years for whomever would be king to wrest the crown from the market leader. And ultimately, it’s up to the ISVs, not Microsoft, Novell, Red Hat, or Sun. They, more than any of the platform providers, will determine the winner, and thus far it’s not at all clear that they are making the difficult decision to certify to another platform.

    So why has it been a bad two weeks for Red Hat? Because they have been taken down a peg – possibly several pegs. Their relationship with their customers and ISVs cannot help but be impacted – negatively for Red Hat – by the Oracle and now Microsoft/Novell announcements.

  2. ODF:
    There are two ways of looking at the news around document format interoperability: this is excellent news because customers will now have the ability to read another format which may be propagated, or that it’s damaging news because it undermines the ODF-only story (although it should be noted that OO.o currently does read MS Office documents, if imperfectly) being told by advocates of the format. Luis contends that it’s the latter, saying:
    Overall ODF has more to lose here – it must be seen as the choice of ‘everyone but MS’ to have a really good chance of succeeding, so this is damaging to ODF, even though it is clearly very good for Real Users.

    I’m inclined to agree. Like Red Hat, ODF is far from doomed, but this news is not likely to be welcomed. It is unlikely to come as a surprise, however, given that it’s no secret that the Novell folks have been attending the ECMA meetings and interacting heavily w/ the MSXML gang. The decision, in fact, was probably inevitable. I’m fairly sure, but don’t have the time to confirm it at the moment, that I said as much in one of our ODF related podcasts.

  3. Other Linux Distributions:
    Red Hat obviously stands to lose, because they’ve experienced the most commercial gain, but the exclusive deal cut w/ SuSE is not good news for other commercial Linux players. Distributions like Ubuntu and Xandros, as an example, will presumably not enjoy the same patent protections for Mono, Samba, and so on that are now afforded to OpenSuSE/SuSE. The impact to these businesses will be comparatively slight, because their (paying) customer bases are dwarfed by Red Hat’s, but is nonetheless not likely to be well received. First Oracle validates Red Hat’s importance for ISVs, and now SuSE is bolstered by a partnership with the real operating system volume player. Could be worse, but could be a whole lot better.

Q: Do you believe this is tantamount to an admission that the Linux IP is somehow tainted?
A: I could very well have missed a quote that proves that, but I’m not sure where that’s coming from. Here’s one relevant bit from Shankland’s story:

Money is flowing both ways for the patent agreement, Smith said, including an “up-front balancing payment that runs from Microsoft to Novell, reflecting the large relevant volume of the products that we have shipped and an economic commitment from Novell to Microsoft that involves a running royalty.”

I have not yet heard anyone explicitly tie these royalties back to Linux, and until I do I’ll view that argument as suspect. It seems to me that if Microsoft had patents it could assert against Linux, it would have done so long ago – before the OS grew to be what it is today. I find it far more likely that said royalties involve other assets involved in the deal. Mono, for example. But again, it could be that I missed the evidence on that front. Moglen’s quote seems to validate this belief, incidentally:

“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.”

Q: Is there precedent for this?
A: Certainly. Sun, you might remember, who was, like Novell, one of Microsoft’s long time adversaries famously buried the hatchet with the folks from Redmond in April of ’04. What will be interesting to see is whether this announcement produces as little in the way of tangible results as that one. It’s also worth noting that while there are some criticizing Novell for being selfish in seeking to protect itself from Microsoft’s patent portfolios, Sun followed a similar path with an agreement around Star Office. The net impact of that worrisome-at-the-time deal? Non-existent, as Microsoft has yet to assert any Office related patents against OO.o.

Q: So you’re skeptical of some of the non-financial aspects of the deal?
A: Yes. When I asked the joint Microsoft / Novell team about how Microsoft would be positioning SuSE Linux in its portfolio, I was first assured that they would be pushing Windows first. News, this wasn’t, but I’ll believe this quote from Ballmer when I see it happen, and not before:

We want those customers who are coming to Windows and Linux to chose the Novell SUSE product line, and we are going to put our marketing behind that.

Q: We haven’t spoken much about the virtualization angle here: what is your feeling on the nature of that collaboration?
A: I think that will more or less play out as it’s been stated. Virtualization is an area, unlike sales, marketing or document formats, where it truly and fundamentally is in their best interests to work together because there are pportunities for both. As I’ll cover shortly, virtualization is an increasingly important part of architectural strategies, and it’s incumbent on vendors to accomodate those needs.

Q: Is Eben Moglen correct? Does today’s deal conflict with Section 7 of the GPL?
A: This is, regrettably, one of those questions I am not qualified to answer. On a quick read of the language, it would seem that it’s at least possible, but it strikes me as unlikely that both Microsoft and Novell’s lawyers somehow forgot to read the language of the GPL. I expect that they have reason to believe that they are not in violation. I’ve never met Novell’s legal staff, but I have spoken with members of Microsoft’s and they are sharp – very sharp.

Q: Two questions from an interested observer:
1. Under the terms of the patent covenant, is OO.o shielded given that Novell is a contributor to that package?
2. Under the terms of the non-assert, are regular community members protected or merely those that pay for SuSE?
A: With the caveat that I’m not certain of the following answers as they deal with nuances not addressed in my questioning, my understanding is that on the first question, OO.o as a standalone offering is not in fact protected under the terms of this agreement. Just as it was not under the terms of Sun’s agreement w/ Microsoft. I believe that OO.o is protected only when running on top of the shielded SuSE offerings. As for the second question, my belief is that Microsoft has promised to not to sue individuals on any patent basis, regardless of whether or not they have purchased or contributed to OpenSuSE/SuSE. Microsoft and/or Novell personnel should feel free to correct me if I’m wrong.

Q: Last question. You were quoted in Shankland’s story as saying, “Microsoft is taking a significant step toward being a better open-source citizen.” Can you explain that remark, in light of some of the criticisms you describe above?
A: Sure. Simply put, what Microsoft has promised here is in my view significant and (potentially) beneficial to certain communities of open source developers, specifically the Mono community, individual non-commercial developers and so on. Is this is as far as I’d like to see them go? Of course not. Is is beneficial for open source as a whole? Debatable. But contrast this behavior with their actions of a few years ago, and it’s another step in the right direction. The journey of a thousand miles and all that.

Q: Any parting thoughts?
A: After a deal like this, I think it’s logical to question what’s next. If you think about the progression from a macro perspective, it’s been interesting: first open source is a cancer, then it has certain attributes that should be emulated (shared source), then it’s just another market to be tapped (JBoss, SugarCRM, etc), and now it’s a strategic alliance with products competitive to the two flagship franchises. There’s an almost linnear progression at work. One thus begins to wonder whether or not there’s a grander plan in effect. Is this, in effect, glasnost? Is it perestroika? We shall see. If that’s true, is Matusow Gorbachev?

Categories: In the Headlines, Linux, Open Source.

  • http://aqualung.typepad.com Ric

    Thanks, Stephen – nice round-up on the fly (and I’m sure there’ll be more when the dust settles). Does the “linear progression” accommodate a future where Windows is Unix-based, or is that too long a bow to draw?

  • https://saviorodrigues.wordpress.com/ Savio Rodrigues

    Re. Section 7 of the GPL:

    IANAL, but I think that the patent protection & royalty payments are being associated with the SUPPORT contracts, not with the GPL’d code. So, everyone using SLES gets the same patent protection, none. And Novell pays Microsoft zero royalties on every copy of SLES distributed.

    But, if you’re a paying customer of a SLES support contract, then your contract gives you patent protection because Microsoft won’t sue you (and hey, you have to keep the support subscription current to keep this level of protection). Also, Novell would pay Microsoft for each support subscription sold (not GPL’d product sold), in return for the “I will not sue” covenant.

    (A lawyer friend from IBM thought this could make sense – although it was over a 20 second IM session…so don’t bank on it)

    At the very end of this CRN article about the deal, Brad Smith, Microsoft’s chief legal counsel, says:

    “Every customer who purchases a subscription for SUSE Linux Enterprise will get not only service and support from Novell but a patent covenant from Microsoft”

    Again, IANAL, but sounds like you have to buy (and keep current) a subscription to get the protection.

  • http://tieguy.org/ Luis Villa

    The linear progression is a future where Novell dominates the Linux market, and the leverage of patents keeps them a nice 3-4% lapdog, just like Office is used to keep Apple in line, and like Apple is used to keep the DOJ in line.

    [That is primarily my cynical side speaking, but that’s the only linear progression I can clearly see- I’m curious to see if Stephen sees others.]

  • http://www.gnome.org/~gman Glynn Foster

    Pessimistically, I would have thought it put the last nail in the coffin for Mono and GNOME living happily together, especially if the technology is only patent protected in OpenSuSE or Novell variant (and obviously that is still an open question). If nothing else, it’ll make the decision even harder. Thanks for the balanced analysis.

  • http://www.redmonk.com/sogrady stephen o’grady

    Ric: thanks much. that’s probably a bit of a reach, but i do think MSFT is inching closer and closer to open source.

    Savio: good catch. SuSE being publically available, licensees are essentially paying for service and support, but it’s worth pointing out. i’m also curious as to whether or not you’re liable as soon as you stop paying. good question.

    Luis: that’s a possibility, no question. but i think it’s equally possible that we see open source play a greater role w/in Microsoft. not in their core businesses, at least any time soon, but for new opportunities. we’ll see.

    Glynn: i’ve seen a couple of folks read it that way, and you could certainly be right. my read on it is a bit different however, in that Mono just went from having zero patent safe deployment platforms to one. not truly cross-platform, of course, but better than it was.

    as for the Mono/Gnome conversation, i agree, this won’t help. you’d know more about that than i would, though.