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Open Sources | Rodrigues & Urlocker » Novell and Microsoft share customers

December 20, 2006 | Comments: (0)

Novell and Microsoft share customers

The news today out of Walmond (Waltham/Redmond) is that some marquee customers are buying into the Microsoft-Novell deal. Specifically, AIG, Credit Suisse, and Deutsche Bank are all on the record as being happy "new" customers (conveniently overlooking the fact that they're all already customers):

Under three separate customer agreements, Microsoft will deliver to each company SUSE® Linux Enterprise subscription certificates, allowing these customers to take advantage of the Microsoft and Novell agreement. Credit Suisse, Deutsche Bank and AIG Technologies, which is a member company of American International Group Inc., highlighted the benefits of interoperability, the patent cooperation agreement and the road map for bidirectional virtualization solutions as the deciding factors in their choice.
Again, one problem I have with this announcement is that each of these companies was already using both company's products prior to this announcement and the pact. They're not net new customers of either Microsoft or Novell, making the announcement as such somewhat deceptive. Fine. It's marketing.

But it also overlooks the fact that some - perhaps all? - of these companies are also heavy Red Hat users. Hence, the real question whether this early adopter program with Novell/Microsoft will actually pull them away from Red Hat. Early signs are a clear "No," even despite the dramatically lower prices Novell is offering for its pilot program. It's tough to beat free. ;-)

All that said, I still think it's good that customers are buying into the interoperability story. This part of the Microsoft/Novell deal is useful and important. I buy it.

Why these organizations care about the patent question I don't know. (Pop quiz: How many companies has Microsoft sued over patent infringement in its history? Exactly two, one of which was Belkin, and I can't remember the other one.) Given Microsoft's position relative to US and European regulators, do you really believe they would want to sue anyone? It would be infinitely worse for them to sue someone than for them to watch Linux start to gobble some of their market share. They are hemmed in by past mistakes.

Anyway, what I continue to find completely baffling about this is why these companies are getting their SLES licenses from Microsoft. I know that they have an agreement and so they need to feed it, but why would Novell ever want to have its biggest competitor selling its software? And, in particular, why should existing customers now get their SLES licenses through Microsoft? From a purely practical standpoint, it looks a bit daft.

(By the way, why isn't Novell reselling Microsoft's software? That would actually make sense, since most of Novell's software already runs on Windows. Funny how interoperability works just fine if you're driving dollars to Redmond, but not when you're heading the other way. :-)

Anyway, does Novell really believe that Microsoft has its best interests at heart? I quite like Microsoft and have a healthy respect for them as a product competitor, but for that very reason I would have absolutely zero trust in having them pitch my products. (In other words, because I trust them to be a strong competitor, why would I trust them to be a strong sales channel for my stuff?)

Posted by Matt Asay on December 20, 2006 11:24 AM


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Actually Deutsche Bank, and AIG were existing customers of Novell's Identity Products. They both also used Suse in pockets. Credit Suisse is a complete new customer. This agreement will make SLES the Linux standard in these organizations and will displace Redhat at these accounts. Novell and Microsoft will actually support them as they move from Red Hat to SLES.

The motivation for the customer is aggressive pricing from MS, and their support and blessing as they move forward. The benefit for Novell is that they can recognize the revenue for the licenses which MS is providing to these accounts (MS bought 70,000 licenses up front, but Novell can not recognize the revenue until customers activate their licenses). Getting this level of commitment from these accounts may have been much harder (if not impossible) or taken much longer for Novell without this agreement.

Posted by: Novell Patriot at December 20, 2006 02:41 PM

Actually, Patriot, what you say about CS is not true. Not even remotely. CS has been dual-sourcing for some time, and there are quite a few within the company that have long felt SUSE is better technology. Don't undersell your proponents. :-)

I also have on good knowledge that they are not pushing Red Hat out any time soon. You can give them free licenses (for several years), but that doesn't eliminate the value they're receiving from other vendors. I understand the need to discount to get people into the fold, but at some point you'll need to entice them based on real value, not waived fees.

Posted by: Matt Asay at December 20, 2006 02:50 PM

Is red hat free? i heard they are higher than SLES in support fees? If red hat is free, it would probable to give SLES free too.. novell have more cash i think than redhat? and with microsof support its hard to beat.. and from the experts SLES is better that RHEL, ahead in technology... blah blah.
Even all future customers are existing clients, they might surely add up to revenue by buying more.. has advantages that they knew already the best technology..

Hi Matt, why there seems too many novell haters and bashers?

Posted by: hitman at December 20, 2006 03:31 PM

What about the possibility that MS is vunerable because it is using open software in it's kernel?

Posted by: tony makstutis at December 20, 2006 11:15 PM

Let me share something: Microsoft is absolutely using open source code in Windows and other products. This is one of the big reasons they were so keen to do the deal with Novell. It's not even in question. All that chest thumping about Microsoft IP in Linux? Very likely true, but it's equally true that Microsoft shifts Linux IP in its own code. Hence, distract the market from an equally important issue.

Posted by: Matt Asay at December 21, 2006 06:50 AM

That's right, Matt Asay, that's how "big M"
does business, you take php, python and other
free, open source software, put it in your
Operating System, slap a licence on it and call
it your own.

Posted by: a.galley at January 7, 2007 04:12 PM

Dear Matt Asay,
No response.
O.K., take a look at Windows 98 (or 2000), in:
C:\windows\java
C:\Program Files\Common Files\Python
C:\WINNT\JAVA
Can this code, or anything else like it, be taken as "evidence" that Microsoft is using Free Open Source Software in its Operating Systems, or is such code just as likely to be installed by applications?
(Note that Python code has Copyright)
If Microsoft is using FOSS, would that violate the General Public Licence? If yes, how is it that no legal action has been taken against Microsoft, and what good would that do anyway (trivial expense)?
What is the Big Issue for us, the Average Users?

Microsoft:
1) cannot prevent the free trade of second-hand software (on auction sites);
2) cannot "kill" an OS which is free to download and developed by a community (certainly not in Europe);
3) is as free as anyone else to use FOSS, provided it learns to respect the GPL;
4) has known for some time, it needs to develop good applications and not just rely on selling Windows OS, and those apps need to be good to justify the price;
5) is going to NEED FOSS in order to develop the next generation of apps with relative speed and ease, apps that will run well on ANY platform (cross-compiling).

Hang on a minute! An application is only as good as the platform that it runs on, and Linux is a relatively new platform, still at early-stage growth. Eventually, we might all grow up, stop seeing obstacles and see the opportunity.

Average Users just need something which works, quite reliably, without crashing into a heap of useless Silicon every two weeks. No doubt, the National Health Service would like that, too: did it really spend £billions on a system that didn't quite do the job? For us, the solution is dual-boot, Linux is the more obvious (and safer) choice for web browsing and e-mail, Windows is completely removed from the web and becomes a "safe working area" (young students like to brag about how easy it is to break into Windows, something which seems to give them great entertainment) and once "safe", is the obvious choice for running those apps meant to run on it. Linux can copy the entire Windows install onto its own drive for safe keeping (doesn't yet work with NTFS). Any files created with Linux (PDF, DOC, etc) can be tested on Windows for compatibility.

Perhaps the Novell/Microsoft deal really is evidence of a truce or even co-operation, for those who are enlightened enough to embrace it. One camp can't afford to dig its own trench, the other can't afford to miss out on something which could be big. No-one seems to gain anything from another's broken bones.

Forgive me for the history lesson:

"One of the biggest factors which today modify the maldistribution of wealth came into being in 1844 when Charles Howarth and the Rochdale Pioneers in general inaugurated the first successful co-operative movement by setting up one small shop in the Lancashire town which gave its name to the Rochdale Co-Operative Society. Here, dividends were paid to members in strict proportion to the amount of their purchases, and the revolutionary step was taken of giving one member one vote, however small or large his holding of shares. The challenge to capitalist industry with its money-power principle went unrecognised: the Rochdale Pioneers remained small beer in the eyes of the contemptuous magnates of the Victorian era. Within a hundred years, their successors were to find themselves faced with the greatest single enterprise in the country, represented in Parliament by its own M.P.s, owning factories, docks, a bank, insurance company and every kind of retail establishment; while by 1945, hotels, holiday camps, cinemas and a theatre had passed into co-operative society control. Contrast this with the year 1864 when the Co-Operative Wholesale Society was formed with a mere £1000 as capital: with this petty sum the struggle began to make the movement independent of capitalist suppliers, and secure against intimidation by their weapon of the commercial boycott".

You see? Nothing to do with "communism" (Bill Gates), just a great solution to a problem.

For Heaven's sake, keep up the good work and put aside the petty sniping!

Damn! I forgot to give it a title:

The Return of the Co-Operative Society

***

Posted by: a.galley at January 9, 2007 08:41 PM

Not quite the response that I expected, so I'll have another go.
After all, you seem free to express yourself!
*

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***

Posted by: a.galley at January 25, 2007 10:11 AM

Forgive me for my demented impatience.
This is not a such a hidden message:
What is the
BIG ISSUE
that
BIG BILL
needs to face about the
SECURITY OF THE WESTERN WORLD?
(remember the W****** D*** port,
and the way it was ******?)

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The name of the virus was Trojan.Downloader-669
The address it appears to have been sent from is ****@*******

And so on x 100.
*

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***

Posted by: irrelevant at January 28, 2007 07:45 PM

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