Tuesday, 21 September 2010 11:49

If VMware buys Novell, what happens to the Microsoft deal?


Over the past few days, there has been speculation that Novell's GNU/Linux business will soon be bought by VMware, the company that is partially owned by EMC Corporation and makes virtualisation products.

These reports also claim that the rest of Novell will bought by a private equity-backed software company, Attachmate Corporation.

The sales may or may not eventuate. Novell is apparently looking for a hike in price above that which was offered in March by Elliott Associates - $US5.75 a share.

Some reports say that Novell is still deciding on how to partition its staff and IP for the possible sales.

How would the sale to VMware, which is a big rival of Microsoft, go down in Redmond, especially given that Novell and Microsoft still have a deal on the table which runs till the end of 2011?

It was only last month that VMware previewed a new cloud-based service called Project Horizon which it said would allow the delivery of applications to any device and lessen the importance of the Microsoft's Windows operating system.

According to  details which were made public in the original deal which they signed in November 2006, Microsoft was to pay Novell about $US348 million over five years, with $US240 million being for SUSE Linux Enterprise Server "certificates" that Microsoft could resell, distribute or use.

Microsoft increased this by $US100 million in 2008, when it was announced that SUSE Linux Enterprise Server had been customised to perform on Microsoft's Hyper-V virtualisation offering.

Under a patent deal, Novell was to get $US108 million from Microsoft for use of Novell's patents. Novell was to pay out about $US40 million annually for five years to Microsoft. In return, Microsoft agreed not to raise patent claims against Novell's end-user Linux customers.

Microsoft was to pay $US60 million towards joint Linux/Windows marketing, mostly for pushing virtualisation. Another $US34 million was in the mix to push the joint Linux/Windows offering. An interoperability lab, a group that works to improve the way Linux and Windows work together, was also part of the deal.

What parts of this deal will VMware be able to retain without hurting its own business? Very tricky ground, very tricky indeed.

VMware will also have problems dealing with the OpenSUSE project which was set up by Novell as a community development project in the hope of attracting outside developers to make code contributions which could then feed into its enterprise distribution. A backdoor method of getting unpaid labour.

Novell sponsors this project with people, hardware and services. But OpenSUSE has its own board and along with community contributors has put together what it calls a list of strengths, weaknesses, opportunities and threats. It makes for extremely interesting reading.

How will VMware, which was once suspected of using code from Linux in its ESX Server and not releasing the source, handle the crowd of developers at OpenSUSE who are quite clearly not a docile lot?

There are other interesting questions that present themselves. What happens to Mono and Moonlight, both projects run by Miguel de Icaza, a vice-president at Novell, which aim to make it easier for Microsoft products to play with Linux, in particular SUSE?

Novell has long used these projects as a means of claiming better interoperability with Microsoft. Once VMware has its own operating system - as it would if it bought Novell's Linux business, why would it care for projects like Mono and Moonlight?

Both projects, it must be added, have not increased Novell's popularity among the free software and open source software communities. VMware can do without negative karma in these communities - it already has plenty.


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Sam Varghese

Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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