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Microsoft and Novell announced a five-year patent and technology agreement around Microsoft software and Novell's SUSE Linux software. Is it love or a declaration of war?
January 10, 2007
URL:http://www.drdobbs.com/open-source/microsoft-loves-linux-whats-with-that/196802779
In November, Microsoft and Novell announced a five-year patent and technology agreement around Microsoft software and Novell's SUSE Linux software. The parties to the deal called it a "patent covenant." Others called it a sellout, a FUD attack, or a declaration of war on Linux specifically and open-source software generally. So what is this Microsoft-Novell deal really about?
In trying to understand any legal agreement, it's usually helpful to look at the money flow. In this case, it's a little complicated—with some of the money flowing now and some later, and with Microsoft buying Linux support coupons from Novell, committing money to market Novell products to Microsoft customers, and granting patent indemnification to Novell customers while receiving patent indemnification for Microsoft customers from Novell.
It nets out, though, to hundreds of millions of dollars flowing from Microsoft to Novell. So you'd think that the question would be, "What did Novell give Microsoft for the money it got from Microsoft?" But instead, the reaction to the announcement was all about something that Microsoft was giving to Novell, or rather to Novell customers, under the agreement: A promise not to sue them for intellectual property infringement.
Which is something that Novell's SUSE Linux users didn't realize they needed until Microsoft pointed it out to them. Something that, some would say, they still don't need. It's not good journalism to attribute opinions to unspecified parties as I just did with the word "some," so I'll change it: Something that, Novell would say, they still don't need. If it sounds odd to you that one of the partners to the deal is denying that one of the key elements of the deal has any value, you're right. It is odd.
Technologically, the deal is less puzzling. According to Microsoft and Novell, the agreement is about three things:
It gets simpler, though. According to Microsoft General Counsel Brad Smith (I don't know why a lawyer is weighing in on this, but I think he's right), the truly important element is virtualization. The kind of virtualization at issue is the kind used by IT departments to consolidate development, production, and app-serving tasks onto a single machine with some kind of virtualizing platform running multiple virtualized operating systems. Such virtualization is a growing market in which the exact roles of the potential players—including that of the operating-system vendor—are not yet defined. That's a situation fraught with opportunity and risk. Microsoft wants more than just to play in this market—it wants to control it, and that requires astute technological and legal strategy.
Because any action by a large company has public-relations implications, you have to think that the PR aspects of the deal were analyzed carefully. Whether they were analyzed successfully is another matter. I'd say clearly not in Novell's case. One unanalyzable and unpredictable element of public relations for Microsoft is the company's, um, enthusiastic CEO.
In presenting a deal like this to the public, most technology CEOs would probably concentrate on the technological aspects and throw around a lot of eight-syllable words like "interoperability" and try to generate a warm fuzzy feeling that they'd done something generally good for their customers and for the industry at large. Microsoft doesn't have that kind of CEO. Steve Ballmer can throw around eight-syllable words with the best of them, and he did some of that, but mostly he was intent on emphasizing the IP aspect of the deal. This is about IP compliance, he emphasized. Microsoft's customers and Novell's are worried about Sarbanes-Oxley, they want a legal guarantee that they won't be sued. The deal, he said, gave such assurances. But his assurances sounded more like threats. "[T]here's nothing in this covenant not to sue," Ballmer said, "that is exclusively offered to Novell." Implying that if other Linux providers don't want their customers sued, they should maybe talk to Microsoft. And nobody'll get hoit.
Microsoft and Novell came under immediate attack. Lawyers involved with open-source licensing said that the agreement definitely violated the spirit and almost certainly the letter of section 7 of the GPL, and if it somehow slipped through some unintended loophole in GPLv2, that loophole would be plugged in GPLv3. Novell and Microsoft, feeling the pressure, admitted that the details of the agreement might need a little work. "Nat Friedman and Miguel de Icaza from Novell have been extremely clear with us that the existing covenant is not good enough," Microsoft Director of Shared Source Jason Matusow blogged, asking for input. Novell responded to the barrage of criticism with several FAQs and open letters. They made the text of the agreement available to Eben Moglun of the Software Freedom Law Center (www.softwarefreedom.org) so that he could evaluate it against the GPL. Novell's position was that there was no acknowledgement of any infringement and no indemnification of Novell, but only of its users, thus there was no violation of the GPL.
To say that this didn't square with Microsoft's interpretation of the deal would be an understatement. Ballmer was flatly asserting that Linux infringed Microsoft intellectual property and that the deal addressed this. "They've appropriately compensated Microsoft for our intellectual property," he said. Novell CEO Ron Hovsepian lashed back, "Since our announcement, some parties [guess who] have spoken about this patent agreement in a damaging way, and with a perspective that we do not share. We strongly challenge those statements."
Ballmer's claim clearly caught Novell off-guard and made them look foolish. It also suggests a couple of obvious questions: (1) What Linux code infringes Microsoft IP, and since infringement indemnification was symmetrical in the deal but most of the money flowed in Novell's direction, one assumes that most of the infringing is on Microsoft's part, so (2) what Microsoft code infringes Novell's IP?
Microsoft is silent on both questions.
Two questions that might be put to Novell are: (1) If there is no infringement, what are your customers being indemnified against, and (2) before this deal, you offered your customers "comprehensive protection" against "copyright infringement claims by third parties against registered Novell customers with SUSE Linux Enterprise Server," so what are you offering them now that you weren't offering them then?
(I think I know the answer to that last one, thanks to Novell CMO John Dragoon: It's protection against "imagined" threats.)
Events like this deal occur in a context. It's instructive to review the context of the Microsoft-Novell deal.
Just days earlier, Oracle had announced that it would be rebranding Red Hat Linux and providing its own support at half the price of Red Hat's, posing a threat to Red Hat and possibly threatening to fork the Linux code base.
Microsoft was trying to prove compliance with the ruling against it in the 2004 antitrust suit, a suit in which it had used its claimed interoperability efforts as part of defense.
Microsoft had been behaving very differently toward Linux and open-source software compared to the days when Steve Ballmer was calling it communistic. Now, Microsoft had a Linux Lab and was focusing a lot of effort on Windows-Linux interoperability. The company set up its Linux Lab in Redmond in September of 2005, and although this may have initially been mostly about sussing out the enemy, it had become more about genuine efforts to promote interoperability. What Microsoft meant by interoperability might not be exactly what anyone else meant by the term, though.
Part of what it meant was virtualization: Xen, a hot virtualization platform (or hypervisor), was added to SUSE Linux in early November, and Microsoft has said it will provide support for Xen and SUSE Linux for users of its Windows Server hypervisor.
Anyone thinking that Microsoft had decided to play nice with Linux, though, need look no further than the SCO-IBM suit. SCO had litigated itself nearly into oblivion trying to assert a questionable IP claim in Linux, and many believe that SCO was, or became, a proxy for Microsoft in Microsoft's efforts to undermine Linux by any means possible.
Linux had become a force that Microsoft had to reckon with. Linux was winning contracts that Microsoft wanted and winning the hearts and minds of developers.
At the same time, there were contentious issues in the Linux community. When Novell bought SUSE in 2003, IBM (fervently committed to Linux but concerned about one vendor becoming too dominant) joined in as a minority investor specifically to promote SUSE as a counterbalance to Red Hat.
The upcoming version 3 of the GNU Public License was not popular with the Linux community and probably was going to be in serious trouble if its drafters didn't back off on some of its more contentious new provisions. Then, almost simultaneously with the Microsoft-Novell deal, Sun open-sourced Java under the GPL.
The context of the deal would also include somewhat similar deals that Microsoft made with Sun and Apple in the past, and how those worked out for the parties involved. And, I think, Microsoft's deals with IBM from the early days of the personal computer revolution are relevant, in a cautionary way. OS/2 developers know what I mean.
So what's in it for the players?
What's Novell's motivation to enter into this agreement? Looking at the money flow, that's not hard to answer: It just got an immediate infusion of cash, its stock went up 15 percent, it got Microsoft legitimizing and promoting its software to Microsoft's own customers, and maybe it reduced the amount of time and money it will be spending on distracting lawsuits—whether pursuing or defending against them. The downside? Taking some heat (clearly more than they expected) from the open-source community, plus (tin-foil-hat on) the eventual shiv between the shoulderblades when it finds out what the deal was really about.
To Bruce Perens, Wine's Tom Wickline, and others, Novell is the new SCO. But even granting that it is, does it know it? As for Microsoft, various theories have been advanced. Steve Ballmer says Microsoft is just promoting its corporate self-interest, and I think he'd get few arguments. As for how it's promoting its self-interest, John Dvorak has a theory involving shims and Microsoft wanting to "crack" the GPL. I didn't understand it. Nick Petreley points out that it's a five-year deal and wonders what happens at the end of five years. Bruce Perens thinks Novell will help Microsoft turn back Open Document Format in favor of something Microsoft controls. And so on.
Then there's the PR angle. In Microsoft's case, PR includes trying to look virtuous to the EU courts. Look, Microsoft can say, at how we play nice with competing platforms like Novell's SUSE. Here's a tin-foil-hat theory: Microsoft can't compete against a movement, Ballmer has acknowledged. It can definitely compete against a company. So isn't it likely that this question has come up at Microsoft: Can't we somehow turn this Linux movement into a company that we can compete with?
If that question has arisen, a clear understanding of open source would suggest that the answer should be "no"; but suppose the question was asked and the answer came back "maybe." What steps would Microsoft take to effectively turn the Linux movement into a company? Would it promote one Linux supplier by giving it money and credibility, and threatening to sue the users of other Linux suppliers' software in the hope of whittling the movement down to that one company? And if the pool of sources for Linux actually did dwindle down to just Novell, does anyone doubt that Microsoft could put it out of business in a year? Tin-foil-hat off.
Who are the likely winners and losers in the fallout from this deal?
Xen? Probably a winner.
Novell? Doubtless if Microsoft gave you a few hundred million dollars and promised to help you sell your Linux distro, you'd manage to take advantage of the windfall. Whether Novell management is smart enough to do the same, I don't know.
Red Hat? Red Hat was definitely in the crosshairs in both the Oracle thing and the Microsoft-Novell deal. Analysts were already wondering about Red Hat's future after the Oracle move, pointing out the obvious fact that Red Hat doesn't own any IP, but just sells support. Um, yeah, that's a pretty standard open-source business model. And Red Hat has a better reputation for support than Oracle. As for the Microsoft-Novell deal, it may have, by contrast, helped Red Hat's image. Red Hat's stock went down after these developments, but it may come out a winner in the long run. As for Red Hat General Counsel Mark Webbink's assertion that, in a year's time, Red Hat will be the only Linux distro standing, that seems a little rash.
The GPL? The fact that Java has been released under the GPL gives a lot of cred to GPLv2. But GPLv3, eh, not so much. Even before the deal, GPLv3 was getting resistance from both Linux developers and Linus Torvalds, who fear that it could lead to the Balkanization of Open Source. The Microsoft-Novell deal potentially increases this risk. A long deep breath may be called for.
Mono? Opinions about Mono's future are all over the map. I've read arguments that being legitimized on only one platform is the kiss of death and that other distros will rip it out. I've also seen it argued that the deal eliminates any lingering concerns about Mono drawing legal fire. And InfoWorld throws this curve: Mono just got killed, but it was by the open sourcing of Java. Mono only got launched, the argument goes, because of licensing difficulties with Java.
UNIX? Eric Bangeman of Ars Technica says if there is a big loser here, it's UNIX.
Linux? It seems fair to say that both the Oracle move and the Microsoft-Novell deal increase the legitimacy of Linux. If it can avoid code forking and GPL forking and any nefarious plot Microsoft may hatch, it should continue to gain adherents.
Microsoft? Microsoft always wins.
One last tin-foil-hat thought: If Microsoft is out to destroy Linux, who would and could stand up to Microsoft? Perhaps only IBM. Could this all be leading up to an epic struggle between IBM and Microsoft?
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