Microsoft-Novell union poetry in motion 2 September, 2008 By Liam Lahey

The deal is part of a partnership between the two vendors that was established in November 2006 that involves joint sales opportunities for each. With the $100 million in Novell's Linux certificates it bought, Microsoft's total investment in Novell's SUSE Linux Enterprise has reached $340 million. The Redmond, Wash.-based software giant said customers could redeem the certificates for expanded support from Novell that includes SUSE Linux Enterprise Server support and support for moving toward an enterprise-class Linux platform. The investments would take effect Nov. 1, 2008, and between now and then Microsoft and Novell would solicit customer input and identify aspects of the support programs that will be most useful to organizations running mixed-source environments.

The Microsoft-Novell union is also designed to build a bridge between open source and proprietary software to deliver interoperability and intellectual property (IP) peace of mind for organizations operating mixed-source IT environments, officials said.

Otherwise, the investment focuses on enhanced programs from Novell to provide tools, support, training and resources for customers seeking an enterprise-class Linux platform and specifically, the optimal interoperability solution between Microsoft Windows Server and SUSE Linux Enterprise Server from Novell.

Rob Enderle, principal analyst for The Enderle Group, said Microsoft never came out with a product that met the needs of the UNIX community, thus Novell's Linux is the closest thing it has to UNIX and it is filling a gap in their own product line.

"I think they have determined it is better to do this through Novell, who is more acceptable to this community than bringing it in house," he said, noting Microsoft's server and tools division is showing record growth in both revenue and profitability.

"Microsoft made a major strategic blunder by not building a product that was more UNIX-like to address the needs of the UNIX community," he remarked. "Linux resulted and now they are falling back on a strategy that has worked well for them in the past 'embrace and extend' and this is part of what has resulted. The other part is their efforts to be more transparent and interoperable."

Microsoft officials stated customer response to the Microsoft-Novell model has been significant since its inception. Within 18 months of announcing the partnership, Novell invoiced more than $157 million in certificate revenues, or 65 percent of the original allotment.

Linux is in the market, and for certain users and tasks/usages it's the best choice for them, said Warren Shiau, associate partner, senior IT analyst, The Strategic Council. Thus Microsoft had two options: ignore Linux or position the company so that Linux works within its environment.

"I don't know what calculations Microsoft's competitive analysts went through before it made the decision the later route is best. Their market position was/is such that they could have gone the 'ignore' route for quite a while longer and had a serious impact on Linux," he said. "Aside from some philosophical 'pure laine' open source nitpicking there's absolutely no doubt that the route Microsoft has taken is beneficial to users.

"There are still interoperability challenges but I'm sure almost everybody recognizes that a gigantic amount of progress is being made relative to what would have been under alternative circumstances."

"The collaboration between Microsoft and Novell has been built on our desire to meet our customers' real-life IT requirements as well as give our partners greater breadth in their solution offerings," said Kevin Turner, chief operating officer at Microsoft. "Some customers have told us they want to be able to run Windows Server and Linux together seamlessly, but in many cases, they need help with the transition to SUSE Linux Enterprise Server from other Linux environments. Our increased investment in the relationship with Novell is intended to give these customers and partners the best possible Windows-Linux interoperability solution, while also extending their existing Windows Server investments and helping to give them IP peace of mind."

That IP peace of mind being customers need not fret over being sued by Microsoft as the deal also includes a patent protection. The protection extends to Novell's Linux users and covers any potential infringement of IP that allegedly exists in Linux. Despite this, interoperability is one of the items that IT administrators grapple with and it reportedly remains a challenge for both Microsoft and Novell. But Enderle didn't see it that way.

"Microsoft and Novell, going back to the Netware days, have a long history of working together," he said. "Their services units have been connected for over a decade. Both companies are motivated to address interoperability with each other particularly under the current arraignment which makes both firms' platforms more valuable as a result in mixed shops."

"The strategic partnership between our companies continues to attract customers by building a bridge between proprietary and open source software," said Ron Hovsepian, president and CEO of Novell, in a statement. "The interoperability delivered by Microsoft and Novell has resulted in very high demand for SUSE Linux Enterprise from customers and channel partners, further validating Novell's Linux strategy."

Enderle added the relationship between Microsoft and Novell has gone swimmingly.

"With the exception of a few unfortunate remarks early on in the relationship from Microsoft's CEO (Steve Ballmer), it has gone incredibly well and both firms seem very pleased with it," he said. "Novell was on the ropes when this started and now is vastly healthier and Microsoft image has improved somewhat as a result along with their market success. Both companies need each other and that typically is a good foundation for a partnership."

For the channel the Microsoft-Novell partnership is also positive, Shiau added, because it opens-up the market.

"Say for example you're a Linux specialist, it's probably better for you to have Linux opportunities within Windows environments/shops than it is to be shut-out of them with the evil eye," he said. "These might not be huge opportunities right now, but the thing is agreements and interoperability work such as this is laying the groundwork for Linux opportunities to be much larger in the future."

Through a joint interoperability lab in Cambridge, Mass., and other initiatives, the two vendors would continue a close technical collaboration on a wide variety of solutions including virtualization, systems management, directory and identity federation, document format compatibility, accessibility technology, and the Moonlight multimedia framework, officials added.