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Microsoft markets Linux and makes Novell rich
To the tune of $356 million in 2007.
By John E. Dunn, Techworld | Techworld
Published: 12:02 GMT, 03 January 08
Having successfully reinvented itself as a Linux company, Novell is now making a substantial portion of its turnover from a single and surprising source - Microsoft.
The company's public 10-k filing for 2007, which covers the period until 31 October, showed that Novell was paid a whopping $355.6 million by Microsoft in return for software licensing during the year.
According to the filing, the sums, paid in November 2006, will be recognised over future accounting periods to avoid distorting the company's turnover, which totalled $932 million for the same period.
The sums explain why Novell was so keen to seal what was seen in some quarters as a highly controversial deal when it was announced in November 2006. The alliance saw Novell support SuSE Linux with the Windows environment, with Microsoft purchasing 70,000 licences for Novell's SuSE Linux enterprise server, which accounts for much of what Microsoft was paying for. Microsoft, in turn, then sells these on to its customers.
"This is to bridge the divide between open source and proprietary source software," said Microsoft CEO Steve Ballmer at the time, in what amounted to an abrupt about-face on his part given his previous criticism of Linux. "It gives customers greater flexibility in ways they have certainly been demanding."
In an end-of-year blog posting on the subject, Novell's CTO, Jeff Jaffe, described the partnership as a key one for the company.
"The partnership with Microsoft became the lever to build a broader Linux ecosystem. We used this credibility and our great technology to land desktop agreements with Lenovo, Dell, and Lotus," he said.
Of course, it is not clear how much of this impressive money pile is coming out of Redmond's bank account because it is merely passing on sales revenues from Novell licences, having sold them on as part of its interoperability agreement. Novell is, therefore, gaining benefit from Microsoft's success at cornering a segment of the Linux-Microsoft interoperability market for itself.
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Add your commentComments
Wilton McGhee | Published: 14:30 GMT, 07 January 2008
Normally I just follow the Linux news in silence with enthusiasm, but, I believe I must speak here. Microsoft might be doing what so many big companies do with a good product, purchase or buying into the product to violate it by introducing changes/restrictions with the we will protect you tag. In a few years the same product might suddenly be changed to shareware then free to try then ... you know the drill. The product can be considered b\violated because the spirit which says let us use the best minds to develop the product would be effectively dead and replaced by a small committee of average minds. The positive with all of this is that the popularity of MS might actually drive the popularity of the Linux OS. The powers that be might need to ride on the back of the MS popularity after all, they to gobble up small and popular software
Rafman | Published: 00:59 GMT, 05 January 2008
Microsoft will die soon. the way that Microsoft uses in the past to to grow is used now, by OpenSource. I remember Commodore, Xerox but i dont remember Microsoft and Apple. I also remember. (Palo.Alto.Research.Center) OR PARC
FeWolf | Published: 20:42 GMT, 04 January 2008
Actually I hate to be the bad guy, but Novell can use the cash for it's projects in the future, you have to stop looking one-sided, Novell can make M$ dependent on them. I am sure they know M$ tricks. I think M$ knows its'imits are coming to an end, no matter how much glitter they put in their OS.
Mike | Published: 19:53 GMT, 04 January 2008
Novell's actions speak for themselves. MS gets some "good" PR, Novell gets desperately needed $$, and just as others said, MS will pull the plug as it sees fit. Thank God for the other distros. They work better anyway!
chris | Published: 18:44 GMT, 04 January 2008
Micro$oft is dead and stinkin. And they know it too. I can't believe people are still writing programs for such a crap operating system.
LinuxUser | Published: 14:23 GMT, 04 January 2008
How exactly is this surprising? It was the intent of MS all along to have Novell depend on them. Follow the recipe: 1) Make a dodgy agreement with a desperate company that just happen to sell a Linux distribution. 2) Get uninformed customers to use Suse Linux because it works better with Windows. 3) Throw Novell a few bucks here and there and then cut off the air supply when it suits. Hopefully, that will kill the linux threat. Classic MS tactics. Unfortunately for MS there will always be other Linux distros that they can't kill. Indeed, Novell is much more likely to die than Linux.
Atlanta Gal | Published: 13:56 GMT, 04 January 2008
This is an interesting deal long-term. Customers say they want to have all their stuff work together and they want Microsoft to step up to the plate and help them make that happen.
Zen | Published: 05:30 GMT, 04 January 2008
except of course the whole deal was used as a means to push FUD from M$ by saying "see linux breaks patents cos Novell has to enter this deal with us to cover it all"... which of course theres been no evidence presented as to which patents so yes FUD FUD FUD. I only hope M$ stop twisting and distorting the facts when it comes to what the deal actually entails. It was supposed to be about supporting the respective operating systems in a virtualised environment was it not? ubuntu ftw anyway
nix | Published: 03:19 GMT, 04 January 2008
novell is microsofts bitch as far as im concerned, i use pclos, www.pclinuxos.com