Enterprise Mac | Tom Yager » Leopard Server faces an x86 server market turned inside out

December 07, 2006 | Comments: (0)

Leopard Server faces an x86 server market turned inside out

TAGS: Politics, strategy and culture, Servers and storage

I've been glued to the fascinating reality show that is the legal battle pitting SCO and Microsoft against IBM, Novell, and the whole of the server computing universe. There's been an Apple angle all along, but just hacking my way through the dense brush of information has occupied most of my time. I'm finally writing again.

If you haven't been watching, here's my view of the present: SCO Group's UNIX copyright infringement/contract violation litig-a-thon is sinking fast from holes its own lawyers punched in its hull, plus a fusillade of bon voyage torpedoes fired by Novell's rock star legal team. Novell took the offensive against SCO by filing Novell v SCO, and as part of that action, demanded transcripts of correspondence between Microsoft and SCO. Microsoft was an early and enthusiastic endorser of SCO's righteous campaign to protect its intellectual property, and it wielded SCO as a litigious boogeyman to terrify competitors' customers into switching to Windows. Of course I could be reading more into it than the facts support, but see the Steve Ballmer quote at the bottom of this post and tell me what you think. This was par.

Novell set aside one waterborne missile inscribed Novell v Microsoft. While counting down, Novell offered Microsoft one chance at having the firing locks returned to safe position. Novell couldn't have inflicted much lasting damage on Microsoft, but it would have been a public civil trial, a grand humiliating mess, and really, Novell's actions were unpredictable. It's not like Novell didn't have a score to settle, and Microsoft doesn't need to join Intel as a party to root against in an anti-trust case.

Microsoft bought its way out of Novell v Microsoft, I think, by pretty much ceding majority share of the x86 enterprise server market to Novell. The deal, which Microsoft announced as a partnership, is a real ankle-grabber: a) Microsoft will give 70,000 licenses of SuSE Linux Enterprise Server to Windows server customers, b) Microsoft will let Novell ride along on sales calls, c) Microsoft waives its right to sue Novell over intellectual property, and d) well, the D is not something that Microsoft is handing over. But it's an awfully big D.

Novell is going to take back ownership of System V UNIX. It supposedly transferred this to SCO, but a Federal Judge found that the contracts had more holes than paper. Novell has leave to contest the agreements, and if SCO goes belly-up while the matter is in debate, Novell's there to snatch up a very valuable property.

What's so valuable about System V UNIX? For one thing, it's the core of a multi-billion dollar big iron UNIX industry, and every box sold is a license paid to the owner of System V. For another, Linus Torvalds himself said that if an affordable x86 cut of System V existed, there'd be no need for Linux. And in Novell's hands, System V, SuSE Linux Enterprise Server (SLES) and the freedom to lawfully profit from the Microsoft IP and intelligence in Novell's safe, makes Novell the server market's only triple threat. What will Novell do with all of this power? Search me. Nothing that competitors will applaud, unless Novell decides to bring all UNIX and Linux together to take aim at Microsoft. Two things are certain: Novell is going to get a lot bigger, and System V release 4 UNIX will return to x86. Not the puffy Solaris, but the trim, fast, portable, 64-bit, scalable OS that is the commercial server standard. Be unhappy about it if you want to, but in the wild in big production deployments, where you see UNIX, you see System V.

I think that Novell's change of fortune potentially upends the landscape where Apple's server platform is concerned. Linux, with its endless flavors and unbounded bloat and complexity, never hit the big time as an OS preconfigured on new PC servers, a fact that gave Apple an edge. But in Novell's hands and with an exclusive level of Windows interoperability, System V could. I expect that CALs (client access licenses, one required for each device that connects to a Windows server) and overall Windows interoperability will be the battleground in an upcoming Microsoft IP scorched earth campaign against commercial open source, which might not bode well for OS X Server's unlimited client license. Novell bought itself a pass.

Novell could have a clarifying effect on the market. Standing next to carbohydrate-addicted, 32 flavors and then some, back-of-napkin documented Linux, System V release 4 is disciplined, trim, portable, proprietary and no stranger to 64-bitness, zero-tolerance standardization, clustering, virtualization and deployments of massive scale. Linus Torvalds himself said that if there had been an affordable System V UNIX for x86, Linux wouldn't have been necessary. It may prove unnecessary when System V returns to the x86 other than on Solaris.

Don't take me wrong--Apple's competition will change, but Leopard Server is going to do just fine. Leopard Server has nothing to fear from Linux, and I place it ahead of even Windows 2003 Server on the key measures of manageability, cost and openness. Leopard Server may do far better than fine, especially if Xserve evolves at a pace that's on par with the original Xserve. Right now, Xserve's price is fantastic. It's eight-core ready, and Leopard Server's release, if it comes in January as I predict, will hit the market well in advance of Longhorn Server. Apple's server platform is in its strongest position ever.

It's easy for Apple to shoot at Windows, especially in the small deployments that Apple's server platform is going after. But Apple's chief nemesis, not in January but at some unpredictable point in the future, is more likely to be Novell than Microsoft. It's more likely to be some amalgamation of System V UNIX, SuSE Linux and Microsoft technology. System V Windux, if you will.

If Novell strikes you as a fearsome thing, rest assured that Novell has more opportunities to squander its riches as it does to exploit them. The biggest risk that I see is the need to price and position UNIX very carefully to avoid competing with SLES. Portraying UNIX and Linux as complementary will be tough. And Novell will have to start evangelizing enterprise software vendors all over again. The failure to do that led to the downfall of the original x86 System V UNIX. There are so many pitfalls, and Apple has a path through and around them. I expect that Novell's rise will make the market more competitive, forcing Apple to develop unique value in server hardware and software, and that'll be good for everybody.

I leave you with edible the words of Steve Ballmer, taken from a speech given in 2004, a transcript of which is on Microsoft's Press Pass site.

I want to briefly mention intellectual property, not to make this into some kind of big deal, but I do want to emphasize that with all of the dialogue about SCO and Linux and blah, blah, blah, people can get confused about where things are from an intellectual property perspective. When you buy a Microsoft product, we indemnify you from all intellectual property risk, whether it's a patent claim, a copyright claim, legal fees, damages. We say we stand behind our stuff, that's our commitment to you. Sometimes that's a very expensive commitment, if we actually lose the Eolas lawsuit, that will be a $550 million claim for patent violations in the browser. I don't think we'll lose that one but, nonetheless, we're vigorously litigating that. But it's our risk, it's not your risk. We stand behind our software.

If you take a look at where things are in the Linux world, nobody stands behind patent violations for open-source software today, not Novell, not HP, not Red Hat or the other distributors, not IBM. From a copyright perspective, Novell has said they will defend against copyright violations, and they cap all legal damages. HP limits its copyright protection to the SCO claim, same with its indemnification amount. Red Hat offers nothing on copyright, and bounded legal indemnification as it relates to dollar amount. IBM is relatively silent, frankly, on what they're doing on the whole thing.

Why highlight this for you? Let's say you're building a business today, and you know you want to build your business around Windows or Linux, you have to decide what intellectual property risk you want to build, what additional cost might you be pushing to your customers in the future that is unanticipated because nobody stands behind the stuff. We've got very smart partners, companies that I think are very smart, who build devices that have Linux embedded, but they haven't really asked the fundamental question of what IP risk are they taking as the provider of these devices with Linux embedded.

And I'm not just trying to view fear, uncertainty, and doubt. Everybody can go study these issues, but particularly the entrepreneurs starting businesses, like folks in this room, they're worth some study in a way that's probably more important than it would be for a CIO of a large enterprise, because your product in some sense always comes in combination with some underlying piece of system software.

Bless you, Godfather.

Posted by Tom Yager on December 7, 2006 12:35 PM

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