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Why the Novell / MS Deal Is Very Bad 367

jamienk writes "PJ from Groklaw has taken the time to really explain the big picture of the Novell/MS deal and how it all fits into the SCO case and the strategy some have employed to attack Free Software. If you thought PJ was becoming too shrill before, or if you haven't understood what the big deal is with Novell's agreement, it's really worth a read." From the article: "This is Groklaw's 2,838th article. We now have 10,545 members, who have worked very hard to disprove SCO's scurrilous claims, and we did. We succeeded, beyond my hopes when we started. But here's the sad part. As victory is in sight, Novell signs a patent agreement with Microsoft..."
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Why the Novell / MS Deal Is Very Bad

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  • by ( 463190 ) * on Wednesday December 06, 2006 @12:36AM (#17124604) Homepage
    I just popped over to google finance and saw that this had come in today, not mentioned in TFA: 9274C-A4EF-4A3F-8E14-ABFBA2178EF8 [] Can somebody who has been following this a bit closer explain this? It's getting quite hard to tell who is friend or foe any more... And in any case, why bother... their stock is toast, so couldn't IBM just buy a controlling interest for $11.2M and wind it down?
  • by Frogbert ( 589961 ) <> on Wednesday December 06, 2006 @12:44AM (#17124656)
    Could someone explain to me, in simple terms, how this effects anything I have anything to do with?

    I use Ubuntu, why should this matter to me? If the Ubuntu folks don't like what Novell is doing can't they just ignore whatever Novell is doing?

    Everyone is acting like this is the end of Linux as we know it. Honestly could someone explain why this is?
  • FUD for who? (Score:5, Interesting)

    by shirai ( 42309 ) on Wednesday December 06, 2006 @12:58AM (#17124754) Homepage
    I don't know about anybody else but this hasn't induced any fear, uncertainty or doubt in me about Linux.

    However, it has induced REAL fear, REAL uncertainty and REAL doubt in Novell SUSE. Up until this incident started, I had pretty much decided that SUSE would be the distribution we would base all our new web/db/mail servers on owing to its combination of corporate support and ease of use.

    Now I'm back on the fence considering Red Hat or another distro.

    Unfortunately, I think SUSE inadvertently screwed themselves. In this regard, I have to say that Red Hat is doing an awesome job. They have deliberately tried to meet the Linux "community standards" while still being commercial. If only they were more open with their non-Fedora distributions, we would have probably standardized on Red Hat from the start.
  • by debest ( 471937 ) on Wednesday December 06, 2006 @01:05AM (#17124800)
    Has Linus been heard from lately on this whole schomzle? He has resisted changing the kernel from GPL2 to GPL3. RMS and others (like PJ) are saying that GPL3 solves the problem going forward. Does Linus concur? Has he made any statement anywhere (like about how he sees the Novell/MS deal possibly changing his mind?

    Just wondering
  • by burnin1965 ( 535071 ) on Wednesday December 06, 2006 @01:07AM (#17124814) Homepage

    And in any case, why bother... their stock is toast, so couldn't IBM just buy a controlling interest for $11.2M and wind it down?

    The short answer, no.

    The SCO Group has dug themselves into a rather large litigation hole that surpasses what it would cost to purchase the entire company. They owe something like $20 million to Novell in royalties, Red Hat has a lawsuit which TSCOG will likely lose now that its become obvious to the court that they had been lying all along, and there is the potential of investor lawsuits due to the run up in the stock price to over $20 dollars a share and the eventual collapse as everyone realized they were lying about their evidence.

    So you see it would be foolish for IBM to purchase TSCOG at this point because of the huge financial risk now hanging over them.
  • by QuantumG ( 50515 ) * <> on Wednesday December 06, 2006 @01:12AM (#17124866) Homepage Journal
    No, they havn't promised not to sue Novell, they have promised not to sue Novell's customers. That said, yes, before the deal they could have sued anyone, and after the deal they can't sue certain people but can sue everyone else.. so what? Nothing has changed? Well yeah, except that no-one actually believed Microsoft could sue anyone but now a couple of million dollars on the table says Novell's lawyers think they can (otherwise it's just a bit circlejerk, and hey, that's likely too).
  • by camperdave ( 969942 ) on Wednesday December 06, 2006 @01:13AM (#17124872) Journal
    Hmm... MSOffice 2007 running natively only on Suse. DRM locked content made available... only on Suse.

    "Linux sucks, but Suse rocks" - Joe Sixpack.
  • by JPriest ( 547211 ) on Wednesday December 06, 2006 @01:49AM (#17125114) Homepage
    Quite simply, the debt and liabilities are worth more then the company. The only asset they have left is their ownership of the UNIX license, and with Novell's clause it looks like they might not really even own that.
  • by Arker ( 91948 ) on Wednesday December 06, 2006 @01:55AM (#17125150) Homepage
    The kernel coders already replace a large portion of the kernel every year. If Linus wanted to go to GPLv3, he could relicense his own code (a quite small amount, at this point in time, as he's been more of a manager for years) and more importantly encourage everyone else to do the same, and announce that new contributions must be under a compatible license as well of course. After, say, 6 months, he could then identify the code that remains under GPL v2 only (likely a small amount, by this time - remember that much of the code is GPL v2 or later already, and much of what is not is from authors still working and very likely to go along with Linus' wishes) and schedule those parts to be rewritten. At the outside, it might take 2 years to complete the transition.

    It would be somewhat of a pain to change, but if he wanted to do it he could definitely do it.
  • Poor Novell (Score:3, Interesting)

    by bogaboga ( 793279 ) on Wednesday December 06, 2006 @01:56AM (#17125152)
    Novell does not cease to amaze me. I wonder whether they will ever do anything right.

    First, they did not do much to improve Yast2 on speed, bugs and the way it handles dependencies. This alone, made me avoid its Linux products.

    Now comes this Microsoft deal. With this deal, I will not even touch its Linux products even with a 10 foot long pole!

    Sadly, those who predicted that Novell will do nothing good for SuSE after buying it, (just like Word Perfect), are being proven right.

  • by l2718 ( 514756 ) on Wednesday December 06, 2006 @02:01AM (#17125180)
    What they did promise is not to sue their own customers:
    Microsoft reserves the right to update (including discontinue) the foregoing covenant pursuant to the terms of the Patent Cooperation Agreement between Novell and Microsoft that was publicly announced on November 2, 2006; however, the covenant will continue as to specific copies of Covered Products distributed by Microsoft for Revenue before the end of the Term.
    As you can plainly see, at any time it wishes Microsoft is free to "discontinue" the convenant and then sue Novell's customsers, as well Novell and anyone else who contributed code to SuSE and might have thought the convenant protected them. The only exception is for Microsoft's paying customers, and event their covenant is only guaranteed to last for the 5-year term of the convenant, at the end of which they can be sued too.
  • Re:FUD for who? (Score:1, Interesting)

    by Anonymous Coward on Wednesday December 06, 2006 @02:13AM (#17125224)
    I used to run SuSe on my back end systems and Beowulf.

    I 'voted with my feet'. New systems are being built on top of CentOS.

    I hope the Samba team stays productive in this environment too.

  • by Anonymous Coward on Wednesday December 06, 2006 @02:29AM (#17125292)
    Nothing is impossible for the man that does not have to do it himself.

    Reading TFA, this came to mind.

    So Novell has four large sales opportunities lost because the Microsoft IP FUD is working.

    Re-read that, and put yourself in the seat of the guys who have a bunch of employees (with families and mortgages and kids going through college) and answer the question: continue to watch the company waste away? Or do something?

    Hey - here is an idea: get Microsoft to admit that Linux matters, that interoperability matters, that customers who run Linux matter.

    It's not like Microsoft is going to be able to keep pretending forever. Someone is going broker a deal first.

    Should it be Red Hat? or Novell?

    And while you are brokering a deal, get it in writing: Microsoft does hereby promise that their FUD argument does not apply to SuSE Linux.

    It seems to me, that the authors of TFA want to have kept the status quo: Microsoft FUD to remain in place; Novell to continue to lose sales in the Fortune 500 because of that FUD, Novell's investment in Linux (and support of Linux and programmers) to fritter away because.... (I don't know. My guess is it comes from some deep-seated anti-establishment attitude.)

    Point is: Novell had to take a bull by the horns - because so far, it was 0-4 in favor of the bull.

    And all I hear is all this whining: but Novell didn't slay the bull! Novell should have forfeited the future! Novell took action, and didn't ask us first!

    Like I said: nothing is impossible for the man that does not have to do it himself.

  • by Sargeant Slaughter ( 678631 ) on Wednesday December 06, 2006 @02:46AM (#17125354) Homepage
    I don't think that non-specialists (ie., geeks who don't think much about law) are in a good position to know what's best.

    I was a CS major. Now I'm finally graduating with a BA in history and applying to law school. I want to focus on IP law to help in the fight against the proprietary giants.

    I began studying CS in '99 because I like computers and wanted to make a lotta $$. After working in the "industry" full time for a couple of years, and going to college for 6+ years, I've finally decided to do something that makes me feel good. Just thinking about using my talents to further a good cause gives me the chills, in a good way. Hopefully I will be reporting to guys like Moglen in a few years, J.D. in hand. Fuck the money.
  • by Aim Here ( 765712 ) on Wednesday December 06, 2006 @02:54AM (#17125396)
    Here's the facts:

    1) At the outset of the lawsuit, Microsoft paid SCO $10 million in "license fees", that were, apparently, illegally kept by SCO rather than passed on to Novell. A few years back Santa Cruz actually had to pay Microsoft for the rights to distribute Unix, now Microsoft has somehow decided it needs to pay SCO for something Unixy.

    2)Microsoft then convinced Baystar, an investment management firm, to invest another $50 million or so, by saying 'if you start to lose money, we'll cover your loss' (but when Baystar started to lose money, Microsoft stopped returning Baystar's calls, literally, so Baystar started dumping every piece of SCO stock they could, as fast as their contracts would let them).

    3) Meanwhile, IBM has uncovered a huge pile of emails between Darl McBride, the SCO CEO, and Microsoft, which SCO was trying to hide from IBM.

    All of this is on the record in court filings. Nothing controversial about any of it. read all about it on Groklaw.

    So why did Microsoft feel the need to pump huge amounts of money into a dying pissant software company at exactly the same time as it's attacking Linux with bogus copyright claims? What did Darl Mcbride and Microsoft feel the need to send each other dozens of emails that IBM wasn't supposed to know about? What's the simplest, Occams-razorish answer?

    To avoid the scary threat of being called a conspiracy theorist must i do a stretch and say shit like 'uuuuuh, Microsoft maybe wants to put out it's own version of Unix and surprise us all for Christmas 2008 and uhhhhh Microsoft was just doing a good deed by putting some random Investment Firm in touch with some random Tech company and uhhhh, Darl Mcbride and Bill Gates were maybe planning on going on a fishing trip in Oregon sometime, yeh that's it, a fishing trip'.

    Come on, what's YOUR simpler and more compelling theory that explains the observed facts?

  • by ClosedSource ( 238333 ) on Wednesday December 06, 2006 @03:13AM (#17125492)
    "what the agreement does is allow Novell programmers to KNOWINGLY put patented stuff for Microsoft compatibility into their products, even the OSS ones and know M$ won't DMCA them. "

    It does nothing of the sort. Novell programmers can't legally do this, have no reason to do this, and have absolutely no obligation to do this under the agreement. As I've said before, compatibility can either be achieved without violating patents or it can't. This agreement doesn't change the patent facts (whatever they are). It merely states that the two companies won't sue each other's customers for patent violation, that's all.
  • by dch24 ( 904899 ) on Wednesday December 06, 2006 @03:46AM (#17125670) Journal
    But I feel like something's going on -- like I'm playing 3 card monte on the street or something.
    Nice analogy.

    Scenario: Three card monte. (Microsoft / Novell agreement)

    Setting: Dark alley. Famous in Mexico city. (Legal conversations held behind closed doors)

    Players: The dealer. Random passers-by who are "just normal people". Someone acting as a lookout for the police. (Microsoft - has a history of extinguishing "partners." Novell - a contributing member of the open source community. Lookout? I'm sure there are some, but I can't clearly label them.)

    Sucker: You. Buy into the game, try to follow the cards when the dealer lays them out, and you might win big. Chances of a fair deal, or catching the sleight of hand: vanishingly small. (Open source community might suffer from FUD, lawsuits, and any other sleight of hand Microsoft plays. Maybe. It's a gamble. What are the chances Microsoft would attempt to extinguish Open Source?)

    The Throw: The dealer can throw the cards onto the table so convincingly that even those aware of the method cannot tell which of two cards is the one you are looking for. Chance of getting swindled: 50%. (Purchase Suse linux. Benefit from patent deal. I give Novell a 50-50 chance of being cast out from the open source community.)

    The "Mexican turnover": (That's what it's called. Sorry, I think that's a pretty racist name.) If you by chance get the right card, the dealer uses the card next to it to "flip it over," but deftly switches cards. He won't let you win, and you'll have to confront him on the swindle. Chances of actually getting the money promised: very, very slim. (Microsoft won't let you win. They are not interested in benefitting the customer, and in regard to Open Source, their long-standing opinions are well documented. See: Halloween Documents, or more recently, Ballmer's statements of "undisclosed balance sheet liability.")

    It's a classic case of Three Card Monte [].
  • Re:FUD for who? (Score:3, Interesting)

    by quantaman ( 517394 ) on Wednesday December 06, 2006 @03:47AM (#17125678)
    I had pretty much decided that SUSE would be the distribution we would base all our new web/db/mail servers on owing to its combination of corporate support and ease of use.....

    Now I'm back on the fence considering Red Hat or another distro.

    So how did the corporate support and ease of use change? If you don't feel any FUD, then SUSE should be just as viable as before. Or is this just FUD of a different color?

    Actually I don't believe him turning away from SUSE would be FUD. Even if you ignore the fact that the current form of this deal means Novell won't be able to use GPLv3 when it comes out (this fact alone could mean the end of SUSE), Novell has alienated a LOT of the Linux community. Even more important much of the strongest critisism has come from the leaders of the community such as RMS and in this case Groklaw. Add this to the fact that a lot of people still don't think of Novell as an open source company, but rather a company that has some open source products. This deal only adds to the perception that Novell just doesn't get it.

    Novell's reputation with the community has taken a huge hit with this deal, and an open source companies biggest asset isn't their customers, it's their community. And the fact that a lot of Linux distros are pretty generic from an average users point of view means the reputation is critical to building a community. This will show up immediatly with a few people switching to other distros (probably not many). But I think the real impact will become felt a couple years down the road. The number of new Linux users choosing SUSE will be significantly smaller, and the number of experience Linux/*nix users (an extremely valuable part of the community) switching to SUSE will be a small fraction of what it is now.

    As to the corporate support and ease of use? With a weaker community there is less testing, fewer fixes from the community, less support from projects (both open source and proprietary). I'm not saying that this deal will be a death blow to SUSE but it will have serious repercussions to the community. Even if Novell does find a way to back out of the deal there is going to be a lot of mistrust until Novell does some serious PR and finds a way to convince the community that they understand and are willing to fight for open source.
  • by Anonymous Coward on Wednesday December 06, 2006 @04:23AM (#17125912)
    "I think Linus is mistaken to stick with GPL2"

    I'm getting tired of hearing this on /. How is Linus supposed to re-license other people's code?!?

    Here []'s a statement a couple of posts above yours that quickly states the bind he's in.

    Could the /. groupthink please assimilate that licensing or re-licensing copyright can only be done by the copyright holder (and original author, depending on situation)?
  • Re:GPLv3 (Score:3, Interesting)

    by dido ( 9125 ) <`dido' `at' `'> on Wednesday December 06, 2006 @05:07AM (#17126126)

    The entire GNU toolchain will move to GPLv3, as well as all of the other software owned by the Free Software Foundation. That, you can definitely count on. Other software that depends on this vast base of software, much of which is fundamental to the operation of any GNU/Linux system, will probably be encouraged to switch with time. Uninformed projects probably are also uninformed enough to use the FSF's original statement of the GPLv2, which contains the 'later version' clause that the Linux kernel lacks, and thus GPLv3 terms may also apply to them if that is desired.

  • GPL v3 (Score:2, Interesting)

    by Tom ( 822 ) on Wednesday December 06, 2006 @05:22AM (#17126202) Homepage Journal
    Until today, I wasn't sure about GPL v2 vs. v3 - now I am. v3 is definitely the way to go. Sorry, Linus, but you're wrong. You are a software engineer, not a lawyer.

    IANAL, but I play with enough of them in my day job to spot it when they've smelled blood. And right now, GPL v2 lies bleeding in the water with the sharks circling it.
  • by Scarblac ( 122480 ) <> on Wednesday December 06, 2006 @06:14AM (#17126448) Homepage

    Microsoft can now spread more FUD about their IP being in Linux, and they can point to this agreement with a major Linux vendor as proof. After all, if these claims were untrue, why would company as knowledgeable as Novell about Linux pay money for indemnification against them?

    That may well turn off some large companies from using Linux. And Novell allows Microsoft to do this, they even agreed to help spreading this FUD themselves too, and all of it without Microsoft having to provide any specifics at all about what exactly Linux is supposed to infringe on.

    No, Red Hat isn't going to stop supporting, but some big customers may shy away.

  • by gtall ( 79522 ) on Wednesday December 06, 2006 @07:11AM (#17126768)
    Not Bill, Uncle Fester. They didn't do the Novell deal because they cared nothing about Linux and its supporters.

  • by darkonc ( 47285 ) <stephen_samuel @ b c g> on Wednesday December 06, 2006 @07:22AM (#17126818) Homepage Journal
    1. It's way more fun to stomp SCO into the ground. and dance around the smoking crater.
    2. Denying the FLOSS community the satisfaction of (1) would alienate people
    3. SCO's stock is likely going down from where it is.
    4. Buying SCO would invite other nuisance suits against IBM
    5. SCO has poison-pill provisions.
    6. Most of the heavy lifting is already done. The rest of the suit could quite possibly cost IBM much less than 10M.
    7. IBM could recover money from their counter-suits (From SCO itself, and possibly also executives, directors and even the lawyers).
    8. SCO is now very unlikely to get any money from IBM.
    So, yes IBM could buy SCO with their petty cash reserve, but it would be a silly thing to do.
    their stock is toast, so couldn't IBM just buy a controlling interest for $11.2M and wind it down?
  • Dude, have you actually heard what Steve Ballmer has to say? He cares less about making money and more about destroying the competition.

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