Novell had this to report this week, in its most recent quarterly SEC report, on its Linux business:
During the first quarter of fiscal 2009, we did not sign any large deals, many of which have been historically fulfilled by SUSE Linux Enterprise Server ("SLES") certificates delivered through Microsoft.
Repeat: "We did not sign any large deals. . . " (Emphasis added.)
So Novell, one of the biggest Linux distributors in the world, and Microsoft, one of the biggest companies in world history, couldn't find a single large customer on Planet Earth to buy into Novell's Suse Linux Enterprise Server software.
Novell CEO Ron Hovsepian has stepped up and, rather than point fingers at Microsoft for that performance, put the blame on his company and its inability to strengthen its reseller channel. In a conference call with financial analysts last month, he said ". . . we don't have the partner ecosystem to the level of performance that we needed it to be." Novell, not Microsoft, is responsible for goosing its own market, Hovsepian said.
Channel concerns weren't voiced back in August, when Microsoft and Novell agreed to renew their partnership. That original partnership called for the companies to cooperate on improving Windows-Linux interoperability, with Microsoft making Novell's Linux available to customers who want a mixed IT shop.
The August extension, though, did come with some fine print:
In August 2008, Microsoft agreed to purchase up to $100 million of additional SLES certificates. Payment will be made in $25 million increments as the certificates are distributed. We received the first $25 million payment in November 2008. Only this first $25 million payment is nonrefundable.
Microsoft appears to have some wiggle room built into the deal. In a market that appears to be more competitive against Windows than ever, Microsoft may have incentive to start using that wiggle room, too.