Microsoft and Novell chiefs agree to disagree

Stan Beer
Tuesday, 21 November 2006 20:10

IT Industry - Strategy

It does not portend the makings of a great relationship when the two CEOs of the companies who have just formed a partnership start a public argument with each other. Yet such is the nature of the newly formed and unlikely alliance of Novell and Microsoft and the disagreement is over alleged software patents infringements.

In true Steve Ballmer style, the Microsoft CEO, who has described open source software a cancer, started the ball rolling when he publicly stated that all Linux customers have an undisclosed balance sheet liability, meaning Linux constains patented Microsoft technology.

The problem for Novell is that it tacitly appeared to support Mirosoft's contention by agreeing to pay Microsoft US$40 million to protect its customers from patent claims. It's true that Microsoft agreed to pay Novell even more, including US$108 million up front for similar indemnification against patent claims, However, the Novell payment to Microsoft has strategic benefit to Mirosoft. It lends credence to the idea that Microsoft has claims on Linux.

Other Linux players, most notably Red Hat, have distanced themselves from the agreement, saying that such an agreement was unnecessary. Now Novell's boss Ron Hovsepian, obviously under a geat deal of pressure as the man who forged the deal, has been forced to make a public statement distancing himself and Novell from Mr Ballmer's remarks.

"We disagree with the recent statements made by Microsoft on the topic of Linux and patents. Importantly, our agreement with Microsoft is in no way an acknowledgment that Linux infringes upon any Microsoft intellectual property. When we entered the patent cooperation agreement with Microsoft, Novell did not agree or admit that Linux or any other Novell offering violates Microsoft patents," Hovsepian said in a public statement.

The gentleman's solution to agree to disagree appears to have smoothed things over for the present. However, others are not so sure. On the Groklaw.net site, posters believe that Novell should never have signed a patent cooperation agreement with Microsoft and needs to extricate itself from the deal.

Whatever happens from on, however, Novell's reputation in the open source community appears to have been sullied and may never recover.