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Novell Gets $348 Million From Microsoft

Posted by kdawson on Wed Nov 08, 2006 12:21 AM
from the money-is-the-root-of-all dept.
An anonymous reader writes, "Novell has published additional details about its agreements with Microsoft concerning Windows and Linux interoperability and patents. It seems the company is receiving an up-front payment of $348 million from Microsoft, for SLES subscription certificates and for patent cross-licensing. Microsoft will make an upfront payment to Novell of $240 million for SLES subscription 'certificates' that Microsoft can use, resell, or distribute over the term of the agreement. Regarding the patent cooperation agreement, Microsoft will make an up-front net payment to Novell of $108 million, and Novell will make ongoing payments totaling at least $40 million over five years to Microsoft."
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[+] Ballmer Says Linux "Infringes Our Intellectual Property" 820 comments
Stony Stevenson writes "In comments confirming the open-source community's suspicions, Microsoft CEO Steve Ballmer Thursday declared his belief that the Linux operating system infringes on Microsoft's intellectual property." From the ComputerWorld article: "In a question-and-answer session after his keynote speech at the Professional Association for SQL Server (PASS) conference in Seattle, Ballmer said Microsoft was motivated to sign a deal with SUSE Linux distributor Novell earlier this month because Linux 'uses our intellectual property' and Microsoft wanted to 'get the appropriate economic return for our shareholders from our innovation.'" His exact wording is available at the Seattle Intelligencer, which has a transcript of the interview. Groklaw had an article up Wednesday giving some perspective on the Novell/Microsoft deal. Guess we'll have something to talk about in 2007, huh?
[+] Mark Shuttleworth Tries To Lure OpenSUSE Devs 258 comments
polar_bear` writes "A lot of developers are angry at Novell for its deal with Microsoft, but is it fair game for other vendors to try to capitalize on dissatisfaction with Novell? Apparently, Mark Shuttleworth thinks so. Shuttleworth sent an invitation to the openSUSE developers list inviting developers 'concerned about the long term consequences' of Novell's deal to participate in Ubuntu Open Week and consider jumping ship to Ubuntu. OpenSUSE and Ubuntu developers are not amused."
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  • by Anonymous Coward on Wednesday November 08 2006, @12:24AM (#16763179)
    Go for it, guys.
      • by MobileTatsu-NJG (946591) on Wednesday November 08 2006, @03:29AM (#16764351)
        "What's up with all the itsatrap tags today, anyway? Does someone think it's funny?"

        Slashdot finds humor in repetition. For example: I, for one, welcome our $SUBJECT overlords. All your base are belong to us. Imagine a beowulf cluster of $SUBJECT. In Soviet Russia, $SUBJECT $VERB you! No carrier. BSOD. Etc.

        I wouldn't mind, but the same group that always shouts "Hollywood keeps rehashing crap!" just can't let these jokes die.
          • by DragonHawk (21256) on Wednesday November 08 2006, @08:27AM (#16765769) Homepage Journal
            "I really enjoy when morons talk about Slasdhot as though it were a single entity, rather than a group of distinct people..."

            Actually, Slashdot is really just one big giant AI system. All the so-called "users", including this one, are really just dummy accounts for the AI. You're the only human here.

            Sincerely,

            The Slashdot Overmind
  • by tomhudson (43916) <hudson.videotron@ca> on Wednesday November 08 2006, @12:24AM (#16763181) Journal

    Microsoft Vader: How much is your soul?
    Novell Spaceballs Skywalker: $380 million and change, and we'll throw in SuSE.
    Microsoft Vader: You fool! We would have paid you 10x as much.

      • exchange of money (Score:4, Insightful)

        by SgtChaireBourne (457691) on Wednesday November 08 2006, @02:53AM (#16764163) Homepage

        Interesting that it involves the exchange of money. This lays the ground work for MS to keep collecting after they sever the agreement with Novell. The agreement runs out in 5 years, but there is a clause in the contract which allows MS to terminate it earlier.

        Either way, it tries to fool people into accepting software patents. For the short term, many projects can be moved to European servers, just like when encryption export was illegal in the US. However, in the long term, the US needs to adopt a more common sense approach to patents and revoke any involving intangibles like software, mathematical formulas, and literature. Expression of those is already protected by copyright. What we have now is a broken system which allows restricting ideas.

  • by Salvance (1014001) * on Wednesday November 08 2006, @12:25AM (#16763193) Homepage Journal
    As scary as this initially sounds (Microsoft Linux anyone?), the partnership makes sense. Microsoft gains the capability to run Linux better in a virtualized environment (or vice versa), and Novell gets a ton of much needed cash. For years, it's been obvious that at some point Microsoft would have to start recognizing the fast growth of Linux as an enterprise platform, and it appears that this move is Microsoft's first step.

    The only concern I have is that Microsot continues further down the path and begins to create closed source applications or kernel modules specifically to run Microsoft apps. If they can swing this, the potential for degradation of the upward Linux momentum is high. John Dvorak of PC Magazine figures that Microsoft will develop GPL work-arounds [pcmag.com], and eventually begin releasing Linux apps.

    What then? Mac servers for everyone?
      • by greenbird (859670) on Wednesday November 08 2006, @01:39AM (#16763741)
        I need interoperability, and simplicity, neither of which are strong points of Linux right now.

        Every time I see a statement like this it pisses me off. Linux is very inter operable with every mainstream OS except Windows. And you know what, Windows isn't inter operable with any other OS that exists. Not only that but the Linux community goes to outrageous efforts to make it inter operable with other OS's (reverse engineering) while Microsoft goes to extreme efforts to ensure no OS can inter operate with Windows.

        Also why is it I find Linux far simpler than Windows. You set it up and it works forever. On rare occasions that there are problems you can find a definitive solution unlike Windows where you just reboot and pray because no one including Microsoft knows what's happening with most problems.

        • by nmb3000 (741169) <nmb3000@that-google-mail-site.com> on Wednesday November 08 2006, @02:48AM (#16764131) Homepage Journal
          Every time I see a statement like this it pisses me off. Linux is very inter operable with every mainstream OS except Windows.

          I don't think he meant interoperability between operating systems, but rather applications and services. Active Directory integrates seamlessly with Exchange, Group Policy, DNS, all forms of ACLs, and allows easy authentication of Windows users and computers. Exchange connects and works great with Outlook and offers a feature set not yet matched by any open source solution. MS Office applications can simply and quickly communicate and transfer information back and forth. -- The significant thing is that it all just works together.

          Also why is it I find Linux far simpler than Windows. You set it up and it works forever.

          I know this is Slashdot, and the same discussions are re-hashed in every article about Linux, but this kind of broad sweeping statement needs to DIE.

          Linux is not simpler than Windows. You don't simply push a button and suddenly everything works. I just installed Ubuntu on my laptop and had to fight a small war to get accelerated graphics working. I had to change the wireless network stuff so it used ndiswrapper instead of whatever it was the installer wanted to use to prevent it from constantly dropping connections.

          I'm tired of giving examples just to have them shot down by people who think everybody is a hardware expert, has the contents of /etc/ memorized, and oh who cares because nobody needs accelerated graphics on Linux because there's no games to play anyway. If the average user (and my install was very average) needs to manually edit config files, then Linux is still failing at being simple to install and use. To your average user these are not small configuration issues, they are glaring *problems* with the software.

          you just reboot and pray

          Funny, but I find myself doing this very thing with Linux (what's broken? Is it GDM, Gnome, Nautilus? Did one of the services break? Which one? Ah, screw it, just reboot.)
          • by strider44 (650833) on Wednesday November 08 2006, @03:39AM (#16764395)
            I don't think he meant interoperability between operating systems, but rather applications and services. Active Directory integrates seamlessly with Exchange, Group Policy, DNS, all forms of ACLs, and allows easy authentication of Windows users and computers. Exchange connects and works great with Outlook and offers a feature set not yet matched by any open source solution. MS Office applications can simply and quickly communicate and transfer information back and forth. -- The significant thing is that it all just works together.

            That's because they're all owned and marketed by Microsoft. I suppose that would be more intraoperability as opposed to interoperability.
                • by jchenx (267053) on Wednesday November 08 2006, @06:00AM (#16765063) Journal
                  And why aren't these instructions on the wiki? because giving someone instructions to put into a console is much more concise, simple, and much more difficult to screw up than guiding them through a GUI.
                  Again, you still don't get it. That type of attitude is precisely why a lot folks still shy away from Linux. They don't want to be told to do X, and not understand why it is that they're doing it. Most people would prefer to figure out the answer themselves. For most regular users, that means playing around with the GUI and hoping that the right button clicks solve their problem.

                  My wife hates it when I debug her computer problems just by telling her to do X, and don't explain why. The sense of being looked down-upon is what most people hate to feel. That's why she will rarely ever come to me for computer help, until she absolutely needs it. Or worse yet, she'll just give up on it entirely. You'd be surprised how common an attitude that is with many users.

                  As someone who specialized in Usability for my Master's, I can honestly say that it would help tremendously if all software engineers were forced to watch usability studies involving normal computer users interacting with software. Or better yet, participating in such studies and/or tutoring such folks. You will quickly realize how attitudes like yours need to change, lest you continue to alienate people even more and send them running to easier-to-use (but less secure/powerful/etc.) alternatives.

  • by ezh (707373) on Wednesday November 08 2006, @12:27AM (#16763205)
    is $348 million. How do you call it? Inflation!
  • Fishy.. (Score:5, Funny)

    by Renraku (518261) on Wednesday November 08 2006, @12:27AM (#16763209) Homepage
    Something seems fishy here.

    And its not the corporate sushi bar, or koi pond.

    Or that nasty intern on the fourth floor.
  • by arthurpaliden (939626) on Wednesday November 08 2006, @12:36AM (#16763275)

    Read the press release, it is not a patent deal, that would put them in violation of the GPL. Instead it is a conenant not to sue.

    So if I understand correctly. Microsoft is admitting that their software violates some of Novell's patents.

    However, instead of protecting themselves and their customers by doing a cross licensing deal with Novell, Microsoft is keeping themselves and their customers at risk by entering into a non binding revocable 'covenant ' instead.

    I wonder how well this will sit Microsoft's shareholders knowing that this risk exists and it is not being addressed permanently when such an option exists.

    • by Bruce Perens (3872) * <bruce@@@perens...com> on Wednesday November 08 2006, @01:06AM (#16763525) Homepage Journal
      I read the form 8K on Edgar. Don't count on press releases.

      The companies are paying each other for covenants not to sue. It's there in black and white. I don't see that this is any different from a license, and I don't see that a judge would be swayed that a covenant in this context is any different from a license.

      It still sounds like a GPL violation to me. Now, we have to watch what FSF does. They own the C library that literally every program on Novell Linux uses. They have a reasonably strong case to enjoin Novell from distributing it, which would kill SuSE entirely. They have Red Hat to pay for the lawsuit.

      Bruce

        • by Bruce Perens (3872) * <bruce@@@perens...com> on Wednesday November 08 2006, @02:19AM (#16763955) Homepage Journal
          Um, a covenant not to sue is a two party contract.

          Yes, but that's not the only contract in this picture. The most important one is a contract between Novell and Microsoft in which they agree to make these covenants to each other's customers. The full details of that contract are not public knowledge but are certainly discoverable.

          Certainly there is clear documented intent to structure the deal as covenants rather than a license with the sole intent of circumventing the GPL. Now, you can show that to a judge and make a pretty good case that the companies are licensing each other and going through circumlocutions with covenants with the sole intent of welshing out of a license's obligations. Then, you ask the judge to consider the result for what it really is.

          Bruce

  • by breem42 (664497) <`breem42' `at' `yahoo.ca'> on Wednesday November 08 2006, @12:37AM (#16763281)
    From the same site (different page - http://www.linux-watch.com/news/NS4685037869.html [linux-watch.com]) :

    "Under the patent cooperation agreement, Novell's customers receive directly from Microsoft a covenant not to sue. Novell does not receive a patent license or covenant not to sue from Microsoft, and we have not agreed with Microsoft to any condition that would contradict the conditions of the GPL. Our agreement does not affect the freedom that Novell or anyone else in the open source community, including developers, has under the GPL and does not impose any condition that would contradict the conditions of the GPL. Therefore, the agreement is fully compliant with the GPL,"

  • by Harmonious Botch (921977) * on Wednesday November 08 2006, @12:38AM (#16763295) Homepage Journal
    Bill: "I'm worried, Steve. We're losing more ground to Linux. It's on the verge of becoming a non-nerd OS."

    Steve: "I've got an idea. Let's buy another version of Linux."

    Bill: "Are you crazy? The SCO gambit didn't fool anybody."

    Steve: "No, not like that. Instead of trying to fool a judge, we'll try to fool our customers."

    Bill: "So? That's already company policy."

    Steve: "Yes, but we'll release our own version. We tell the public that we're joining the Linux bandwagon, and with our marketing clout, it will soon become the dominant version on the market. Then when the public is convinced that MS-Linux IS Linux, we make gradual changes to turn it into an unusable bloated wreck. Linux will be finished!"

    Bill: "No way! Remember, Steve, I used to write software. No self-respecting programmer would deliberately wreck an OS. Where are we going to get a bunch of programmers to do that?"

    Steve: "We have all the guys who wrote Vista. I think they could do it."

    ( Steve exits )

    ( 10 minutes later, Steve returns, slamming the door quickly behind him. He looks like he has seen a ghost )

    Bill: "So, how did it go?

    Steve: ( shaking his head ) "Bad, bad, bad, bad, b-"

    Bill: Get a grip! What happened?

    Steve: "They won't do it...I mean they'll do it, but they want to do it well! They won't wreck it."

    Bill: "You explained the plan to them?"

    Steve: "Yes, very clearly. Twice. But they just started chanting. One word, over and over and over and over and over and ov-

    ( Bill picks up a chair, bashes Steve over the head with it. )

    Steve: "Wh..? Uh..thanks...I needed that."

    ( Bill puts down the chair, walks to the door )

    Steve: "Nooo! Please don't op-"

    ( Bill opens the door. From down the hall a chorus of voices can be heard. )

    Voices: "-ux! Linux! Linux! Linux! Linux! Linux! Lin-"

    ( Bill slams the door )

    Bill: "That's bad."

    Steve: "It's worse. They now refuse to work on Vista any more!"

    Bill: "That's ok. We aren't going to support it for very long anyway."

    Steve: "So what are we going to do?"

    Bill: "I think I can still make the plan work. Listen: we'll let them produce a good version of Linux. We'll make it very good for servers."

    Steve: "Suse? You mean we'll take over Novell?"

    Bill: "Yes. That gives us a big step up to dominate the Linux market like you suggested. But instead of trying to convice the world that Linux is junk, we'll tell them that Linux is only for servers."

    Steve: "But it will migrate to the desktop! We have to kill it!"

    Bill: "No, we'll let the guys downstairs make it the way they want it. Keep it for nerds. Each update will be more and more technical. Let them gradually turn it into something that only a Linux pro can use."

    Steve: "We're gonna pay them to write Gentoo?"

  • My bet (Score:5, Interesting)

    by WindBourne (631190) on Wednesday November 08 2006, @12:39AM (#16763305) Journal
    that this includes a deal to not persue much further the SCO case. While the feds may go after MS for their involvement with the shady deal with SCO, this is probably an early payoff to Novell to drop it. I just wonder if this allows Novell to go after Sun or did MS protect them as well?
  • Remember when Microsoft gave Apple $3XXM, and the Mac Vs. Windows lawsuits were settled? Chances are that Microsoft is now doing the same with Novell, and Novell still owns some patents for Unix that it did not sell to SCO, and Novell was a major player in the IBM vs. SCO lawsuit. Microsoft is just trying to CYA itself, because obviously Vista infringes on some Unix/Linux patents. This is just a way of Microsoft saying to Novell, we'll give you some money to save your company, like we did to Apple, if you promise not to sue us.

    I wonder if there will be a SuSE version of MS-Office, like the OSX version of MS-Office created out of the Microsoft-Apple deal?
  • Well... (Score:5, Funny)

    by tooyoung (853621) on Wednesday November 08 2006, @12:45AM (#16763351)
    ... I guess now we don't like SLES. Shoddy security, I've heard.
  • by Anonymous Coward on Wednesday November 08 2006, @12:46AM (#16763363)
    Novell is in huge financial trouble. If you read the article, they are trying to negotiate with their major debtors to come to an agreement and continue payments. Wells Fargo and Citibank are calling two of their major loans out against Novell. Also note the rumors of layoffs, investigating other financial mishaps, and the late filings of their earnings. This is what causes many companies to start heading down the tubes. The whole Microsoft agreement is essentially Microsoft cashing in on Novell after they made some financial mistakes and need someone to bail them out of it. Just watch as Microsoft ends up having major influence in the direction of Novell. This isn't a bad thing though. It means there will still be two main players in the Linux Business market. It's Microsoft's way of also creating some feirce competition against Redhat. Not to mention Oracle has their sites on Redhat and are taking shots at them. The whole support agreement with Oracle deal is meant to take out Redhat's major market. With that and a soon to be beefed up financial stability of Novell and push for SLES, Redhat will had some hard roads to go through. It's no surprise that MS sided with Novell when they saw Oracle make their move against Redhat. Interesting times in major Linux vendors are ahead. It should be interesting to see how it all turns out.
  • Embrace and Extend (Score:5, Interesting)

    by Mr Bubble (14652) <chris.cambron@us> on Wednesday November 08 2006, @12:48AM (#16763379) Homepage
    Maybe Microsoft thinks that they can gain a significant share of enterprise Linux installations with a distribution they control. Then, they will do their classic embrace and extend to use the leverage to their advantage.

    Microsoft knows that no one ever got fired for buying IBM of Microsoft. IBM is pushing Linux and that doesn't help Microsoft. By providing a Microsoft-approved Linux, they can get a slice of the pie and out themselves into a position to do to Linux what they have tried to do with every other standard technology - embrace and extend it.
  • by pair-a-noyd (594371) on Wednesday November 08 2006, @12:55AM (#16763439)
    I've advised all the Suse users I know and support to do the same thing, right now.
    I will no longer be doing any updates to any of the Suse installations I support via Novell.

    I'm actively seeking a replacement distro.

    The poisoning of the well is under way, get out now while you still can.

  • by Laven (102436) on Wednesday November 08 2006, @02:13AM (#16763925)
    Excerps from my blog post [livejournal.com] of November 3rd, the day that Novell sold their soul and betrayed the community for a little short-term safety.

    As long as I work on the Fedora Project, Fedora will never compromise on the essential liberties of FOSS nor will it betray the community. But the price of liberty is not free, nor is it comfortable. And unfortunately, some "leaders" of our community [lwn.net] are willing to compromise liberty for short-term convenience. I am disgusted by people like this [lwn.net], and by Novell's betrayal of the community today.

    Novell has effectively traded Long-Term Liberty for Short-Term Safety.

    Red Hat supports causes that matter like providing the original seed money for Creative Commons [redhat.com]. Or being a key partner in the anti-software patent movement [lwn.net] during the miraculous last-minute turnaround at the European Parliament last year. I am proud to be part of an organization that demonstrates such moral and ethical commitment.

    But ultimately, Red Hat cannot change the world alone. That is why the Fedora Project exists. We want to enable the community to work together to improve FOSS at a rapid pace, in partnership with the large and consistent contributions from our engineers. We strongly believe that this is the most effective way for the entire FOSS movement to advance. Yes, we made some big mistakes in our community relationship earlier, but we are learning, and continue to improve at an ever accelerating pace.

    For these reasons that I urge the FOSS community to support the Fedora Project through volunteer contributions of time and effort. Or if you lack time to contribute, please consider monetary donations toward any of the shared causes that we are fighting for.

    http://wtogami.livejournal.com/11305.html [livejournal.com]
    Please read more in the original version in this blog entry.

    Warren Togami
    Founder, Fedora Project
    Software Engineer, Red Hat, Inc.

    • by killjoe (766577) on Wednesday November 08 2006, @05:12AM (#16764803)
      Yes. Novell is the new SCO.

      If you really want to understand what's going on go read groklaw. The headline here is wrong. There is no patent cross licensing, that would violate the GPL. There is a promise which is not a license not to sue. It's a weird thing. There are also some unsaid, unprinted, nobody knows about exception.

      So MS promises not to sue novell customers for MS patents with some exceptions. Most likely those exceptions involve some companies (for example google) or some technologies like XML.

      MS has promised to sue other companies. Ballmer said that anybody who uses linux from anybody except novell is under a threat of a patent lawsuit from MS.