November 2006
Q: What are you announcing?
A: Novell Inc. and Microsoft Corp. are announcing a historic bridging of the divide between open source and proprietary software. They have signed three related agreements that, taken together, will greatly enhance interoperability between Linux and Windows® and give customers greater flexibility in their IT environments. Under a technical cooperation agreement, Novell and Microsoft will work together in three primary areas to deliver new solutions to customers: virtualization, Web services management and document format compatibility. Under a patent cooperation agreement, Microsoft and Novell provide patent coverage for each other’s customers, giving customers peace of mind regarding patent issues. Finally, under a business cooperation agreement, Novell and Microsoft are committing to dedicate marketing and sales resources to promote joint solutions.
Q: What does this mean for Linux?
A: Novell and Microsoft recognize that many customers have, and will continue to have, multiple platforms, including Linux and Windows, in their environments. Customers are asking for highly reliable, security-enhanced and interoperable solutions. Enabling easy and powerful virtualization of Linux on Windows and Windows on Linux is a great step forward toward this goal. Novell will continue to promote Linux as the premier platform for core infrastructure and application services. This deal strengthens Novell’s commitment to the community through leading-edge development projects as well as the continued promotion of Linux in the marketplace. Novell recognizes the significant contribution open source developers have made to Linux and their reliance on the General Public License. The patent agreement signed by Novell and Microsoft was designed with the principles and obligations of the GPL in mind. Under this agreement, customers of SUSE Linux Enterprise know they have patent protection from Microsoft in connection with their use of SUSE Linux Enterprise, further encouraging the adoption of Linux in the marketplace.
Q: Will Novell and Microsoft stop competing?
A: This agreement is focused on building a bridge between business and development models, not removing competition in the marketplace. The companies will continue to compete in a number of arenas, including the desktop, identity and security management, and systems and resource management. At the product level, Windows and SUSE Linux Enterprise will continue to compete; however, the agreement is focused on making it easier for customers who want to run both Windows and Linux to do so. This is a very common relationship for large businesses that simultaneously partner and compete in different areas.
Q: Is this in response to recent events, such as Oracle’s announcement about Red Hat?
A: No. Negotiations on this agreement have been going on for many months. This agreement reflects a joint assessment by Novell and Microsoft that customers will be best served by ensuring that Linux and Windows can interoperate effectively. In terms of a possible Oracle move to offer support for SUSE Linux Enterprise, Novell believes customers with heterogeneous networks are best served by an independent operating systems vendor such as Novell with broad hardware and software support.
Q: What are the financial benefits to Novell? To Microsoft?
A: Novell anticipates that the agreement will increase demand for SUSE Linux Enterprise, although it are not putting out any formal estimates. Through the improved interoperability and patent protection offered as part of this agreement, both Novell and Microsoft anticipate increased business opportunity through both best-of-breed product solutions and market differentiation.
Q: What are the specifics of the agreement?
A: As with many commercial transactions, the financial terms of the agreement are not being disclosed at this time.
Under the technical collaboration agreement, the companies will create a joint research facility and pursue new software solutions for virtualization, management and document format compatibility. These are potentially huge markets — IDC projects the overall market for virtual machine software to be more than $1.8 billion by 2009, and the overall market for distributed system management software to be $10.2 billion by 2010 — and the companies believe their investment in interoperability will make their respective products more attractive to customers.
Under the business collaboration agreement, the companies will pursue a variety of joint marketing activities. In addition, Microsoft will distribute as part of a resale arrangement approximately 70,000 coupons for SUSE Linux Enterprise Server maintenance and support per year so that customers can benefit from the use of the new software solutions developed through the collaborative research effort, as well as a version of Linux that is covered with respect to Microsoft’s intellectual property rights.
Under the patent agreement, both companies will make upfront payments in exchange for a release from any potential liability for use of each other’s patented intellectual property, with a net balancing payment from Microsoft to Novell reflecting the larger applicable volume of Microsoft’s product shipments. Novell will also make running royalty payments based on a percentage of its revenues from open source products.
Q: Does this mean that Microsoft will now sell Linux?
A: No. However, as part of this agreement, Microsoft and Novell want to ensure that their joint customers have the opportunity to take advantage of the improved interoperability and patent protection enabled by this agreement. To help promote these new solutions, Microsoft has purchased a quantity of coupons from Novell that entitle the recipient to a one-year subscription for maintenance and updates to SUSE Linux Enterprise Server. Microsoft will make these coupons available to joint customers who are interested in deploying virtualized Windows on SUSE Linux Enterprise Server, or virtualized SUSE Linux Enterprise Server on Windows.
For customers who have a significant Windows investment and want to add Linux to their IT infrastructure, Microsoft will recommend SUSE Linux Enterprise for Windows-Linux solutions.
Q: What does this mean for customers?
A: Customers have repeatedly told both Novell and Microsoft that flexibility is an increasingly important part of their data center. At a time when CIOs are being asked to do more with less, and improve utilization, virtualization is a key to solving that problem. Both Novell and Microsoft realize that the data center of the future will have both Linux and Windows as significant platforms. This agreement is all about making those two platforms work together, and providing the enterprise support for that interoperability that customers demand. By working together, Novell and Microsoft enable customers to choose the operating system that best fits their applications and business needs.
Q: Why is the patent agreement important?
A: The patent agreement demonstrates that Microsoft is willing to enter into agreements that extend its patent protection to open source customers. This is an important foundation in building the bridge between proprietary and open source software.
One of the biggest perceived differences between open and closed source software revolves around intellectual property. Because open source software is developed in a cooperative environment, some have expressed concerns that intellectual property protections could be compromised more easily in open source. Today’s agreement between Novell and Microsoft provides confidence on intellectual property for Novell and Microsoft customers. By mutually agreeing not to assert their patent rights against one another’s customers, the two companies give customers greater peace of mind regarding the patents in the solutions they’re deploying. Novell and Microsoft believe that this arrangement makes it possible to offer customers the highest level of interoperability with the assurance that both companies stand behind these solutions.
Q: The press release indicates Microsoft is also pledging not to assert its patents against individual, non-commercial open source developers. How is this connected to Novell?
A: Microsoft and Novell felt it was important to establish a precedent for the individual, non-commercial open source developer community that potential patent litigation need not be a concern. Microsoft is excited to more actively participate in the open source community, and Novell is and will continue to be an important enabler for this bridge. For these reasons, both Novell and Microsoft felt it was appropriate to make this pledge for Microsoft not to assert its patents against the non-commercial community.
Q: How will the technical cooperation work?
A: The two companies will create a joint research facility at which Microsoft and Novell technical experts will architect and test new software solutions and work with customers and the community to build and support these technologies. The agreement between Microsoft and Novell focuses on three technical areas that provide important value and choice to customers:
-
Virtualization. Virtualization is one of the most important trends in the industry. Customers tell both companies that virtualization is one way they can consolidate and more easily manage rapidly growing server workloads and their large set of server applications. Microsoft and Novell will jointly develop a compelling virtualization offering for Linux and Windows.
-
Web services for managing physical and virtual servers. Web services and service-oriented architectures continue to be among the defining ways software companies can deliver greater value to customers. Microsoft and Novell will undertake work to make it easier for customers to manage mixed Windows and SUSE Linux Enterprise environments and to make it easier for customers to federate Microsoft Active Directory® with Novell eDirectory.
-
Document format compatibility. Microsoft and Novell have been focusing on ways to improve interoperability between office productivity applications. The two companies will now work together on ways for OpenOffice and Microsoft® Office system users to best share documents and both will take steps to make translators available to improve interoperability between Open XML and OpenDocument Formats.
Q: What are the main components of the business cooperation agreement?
A: The business cooperation agreement addresses a series of issues designed to maximize the value of the patent cooperation and technical collaboration agreements, including marketing, training, support and sales resources.
Q: By making it easy to run Windows virtualized on Linux, isn’t Novell undercutting its own Mono project, which shares a similar goal?
A: Mono provides developers with a way to run applications designed using Microsoft .NET technologies to run on Linux and other platforms. Its main focus is the Linux desktop, where Mono has been leveraged to build a series of new services, including search, music playback and more. Virtualization focuses on maximizing the value of server hardware by running multiple operating systems. It is used for server consolidation, workload balancing and other corporate needs. So while both approaches are designed to give customers flexibility in their IT systems, their focuses are quite different.
Q: What does the patent agreement cover with regard to Mono and OpenOffice?
A: Yes, under the patent agreement, customers will receive coverage for Mono, Samba and OpenOffice as well as .NET and Windows Server®. All of these technologies will be improved upon during the five years of the agreement, and there are some limits on the coverage that would be provided for future technologies added to these offerings. The collaboration framework we have put in place allows us to work on complex subjects such as this where intellectual property and innovation are important parts of the conversation.
