Parsing And Re-Parsing Novell-Microsoft

Dan Lyons' Forbes.com

For what it's worth, Microsoft-Novell is indicative of hell freezing over given that the fruits of their last big "coopetitive" effort was a near-dead Netware and an entrenched Windows NT, the granddaddy of Windows Server 2003. This came years after Netware put Microsoft-backed and OS/2-based LAN Manager in the ground. Netware, for any newbies out there, was Novell's lifeblood way before Linux came into the picture.

One lesson that everyone needs to re-learn: Microsoft almost always loses before it wins. Cases in point, the first two releases of Word, Excel, Windows, well, pick any Microsoft product really.

Now, Microsoft is paying Novell upwards of $300 million for Suse support coupons. Does anyone else have images of Bill Gates and Steve Ballmer handing these things out like fliers and urging recipients to call early and often? Or using them to light cigars.

Goldman Sachs analysis released today reflects some befuddlement over the payment which consists of an upfront check for $308 million, then another $94M for joint work on Windows/Linux virtualization efforts.

According to Goldman Sachs:

This deal also belies a Microsoft weakness beyond intellectual property issues. At the very least, by taking the stage with Novell CEO Ron Hovsepian, Microsoft CEO Steve Ballmer was admitting, publicly, that Linux exists in its accounts. This must be a bitter pill to swallow after likening it to cancer.

In the name of customer demand, the company really does have to put the best face on interoperability and go beyond lip service.

This deal gives Novell a little walking-around money, bolstering it against Red Hat which is by far the Linux Market leader. It has the added benefit of taking wind out of Larry Ellison's sails the week after he did his best to neutralize Red Hat while still dubbing Linux as Oracle's operating system of choice.

One Linux solution provider is nervous about what could come next, citing a few possibilities.

"My thoughts are that Novell and Microsoft and Apple are pulling together closely to protect themselves against what Ellison might be doing with Red Hat. Ellison could do a hostile takeover or worse, force Red Hat out of business," says Gregg Rosenberg, CTO of RICIS, a Tinley, Park, Ill. Linux solution provider. "It may be that Novell licenses technology to Microsoft, it may be that Microsoft attempts to acquire Novell, both of which are realistic [options] at this point and neither of which I like. Microsoft has more than sufficient money to buy Novell but it would be bad for open source. I would hope the government would step in."

Got thoughts on Microsoft-Novell? Send 'em along to me at: [email protected]