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Weekly Column

Divide and Conquer: The Microsoft/Novell deal is more about disruption than cooperation.

Status: [CLOSED] comments (73)
By Robert X. Cringely

In the U.S. elections this week, a change of power took place in the Congress that had an almost instantaneous effect at the White House. Just a few days before, President Bush said of a potential Democratic takeover of Congress: "The terrorists win and America loses." This week his line has changed to "reconciliation" and "bipartisan effort." That's the way it is with dogma, which is heartfelt right up to the moment when it is no longer felt at all. That might be the best way, too, to understand Microsoft's recent deal with Novell and apparent embracing of Linux.

There was a time -- right up to a week ago -- when Microsoft appeared to feel, from the statements of Bill Gates and Steve Ballmer, that they could ridicule Linux out of corporate America or use a campaign of fear uncertainty and doubt (FUD) to undermine the open source operating system. There was nothing good about Linux, they said, and a lot that was bad. They even argued that paying Microsoft for Windows was less expensive than getting Linux for free. Yeah, right.

But Linux happens. And Linux isn't going away. As a server operating system, Linux is far more important than Windows and that trend isn't changing, something that Microsoft has finally acknowledged, not just through this agreement with Novell, but also through the PHP license Redmond also announced this week. But Microsoft is still Microsoft and has its own peculiar way of changing with the times as we see in this very interesting agreement.

What is actually going on here? For one thing, Microsoft seems to be paying Novell a lot of money, some of it for software licenses and some for patent licenses. Microsoft agrees not to sue Suse Linux customers for violating its patents (a sort of non-license license that is purported to gracefully cover the legal gaps between open- and close-source licensing) and the two companies will build an interoperability lab.

Nothing wrong so far. Novell gets money, exclusive access and co-promotion by Microsoft and Suse Linux gets a boost against Red Hat and the other distributions.

Then Ballmer, speaking a few days later with an Indian IT publication, offered to do the same sort of deal with ANY Linux distributor, even Red Hat, much to the surprise of Novell, which thought the term "exclusive" meant, well, exclusive. The ink was barely dry and Microsoft was apparently re-interpreting the terms of the agreement.

This was, of course, by design. The agreement with Novell IS exclusive and Microsoft has no intention of signing similar deals, but to suggest that it might has a dual effect of undermining ALL commercial Linux vendors. Novell customers and investors have to wonder if there is some fine print they don't know about, so Novell is undermined. Red Hat is certainly undermined, either by being suckered into negotiations that will go nowhere or, more likely, by not even approaching Microsoft since they know (but the market doesn't) that Ballmer's offer isn't for real. More Microsoft FUD.

Microsoft chose to do a deal with Novell, rather than with Red Hat or any other Linux distributor, for several important reasons. Suse Linux is most popular in Europe, where Microsoft has had tough going lately with European Union regulators. Appeasement of the EU by cutting a cross-licensing deal with its largest seller of open source operating system software couldn't hurt, and might even save a fine. Choosing Novell hurts Red Hat in the U.S., where Suse hasn't really been a major factor. Novell is perceived as weak where Red Hat is strong. And finally, Novell has some legal leverage over Microsoft in the form of an antitrust lawsuit inherited from WordPerfect. Maybe this deal will get Novell to back off on the legal front.

Microsoft is a marketing machine, though, and they really want to start selling software into the Linux market and believe that -- with Novell's help -- they can. On top of the Suse and PHP agreements, then, expect Microsoft to try for a similar relationship with MySQL and to augment the limited cooperation already going on with Apache.

The plan is to ultimately offer a Chinese menu of server components, where you can run cheap open source bits on Windows, perhaps using Suse as middleware, but with the knowledge that Microsoft is going to incessantly try to get customers to "upgrade" to SQL Server, for example.

The grandest manifestation of this strategy would be to decouple Windows from its kernel and somehow pop the API and other bits right over onto Linux, assuming that would somehow make the product more competitive. At the end of the day all Microsoft cares about is money, really, so if they could give up a lot of support headaches and support a far smaller code base yet get the same money, of course they would do it. I'm not saying this is where the strategy WILL go, just that it is where the strategy COULD go.

Yeah, but who is going to make this thing actually work? That brings us to the Novell/Microsoft interoperability lab, which was also part of last week's agreement. The moment I read about that, the question that popped into my mind was, "Which company will be doing all the work?" If historical patterns kick in, it will be Novell. As the smaller and leaner company Novell has always been able to beat Microsoft on technology. This agreement will tie Novell to interoperability promises Microsoft doesn't care about nearly as much as Novell does, with the result that Novell will do most of the work.

We saw this happen before when 3Com tied its fortunes to Microsoft in the late 1980s with the lamented 3Com-Microsoft LAN Manager network operating system, which was ironically Microsoft's answer to Novell at that time. Then 3Com CEO Bill Krause felt the only way to compete with Novell was through an alliance with Microsoft. So 3Com bought its way into the relationship, ended up doing all the work (MORE THAN all the work if you count recoding Microsoft blunders), then had to BUY ITS WAY BACK OUT when the product failed.

After that deal was over and the blood had dried, 3Com founder Bob Metcalfe claims that a Microsoft exec told him, "You made a fatal error, you trusted us."

This new agreement shows exactly how weak Novell has become and how eager Microsoft is to grow its server business at almost any cost. It isn't bad for open source, but neither is it good for open source. It is probably good for Windows developers who can now hope to deploy .NET apps freely on Linux using Novell's Mono code, which just shipped its final release version (no coincidence there). In the end, Microsoft WILL turn on Novell simply because they can't keep themselves from doing so. Those who think Microsoft has changed its ways weren't listening this week to what Ballmer was dishing out in India. This is not a guy who talks off the top of his head.

If there is a saving grace here it is that WordPerfect lawsuit against Microsoft that Novell has not yet dropped and can continue to use as a weapon against Redmond. This is Novell's third antitrust case against Microsoft and it won the first two. Novell knows how to win such a lawsuit and has a huge evidence database available to it from those other cases. If Microsoft tries to screw Novell, then Novell can turn up the heat on that WordPerfect case, possibly releasing new evidence that can further hurt Gates and Ballmer. Remember, all Microsoft stories are true.

The real irony, of course, would be for the Microsoft/Novell relationship to go swimmingly yet have Novell STILL pursue that WordPerfect case at full speed, winning it of course. I can see it now: "You made a fatal error," the Novell exec will say, "you trusted us."

Comments from the Tribe

Status: [CLOSED] read all comments (73)

Every time I hear comments like "Open Source needs to evolve in order to become common in the business market", I realize that someone needs an education in why Open Source exists - again.

The history and roots of Open Source didn't start in the corporate world. It's early evolution was totally outside the realm of the corporate world. In essence the corporate world was, and still is, irrelevant to Open Source and the reason it exists.

The movement grew, and more importantly the code base got better and better, until it reached the point were the corporate world recognized it as a viable code platform to run business applications.

Let try a very simplistic definition in the hopes that it will serve as a starting point to understanding:

"Open Source is a mutual admiration society of software developers. The currency of this society is useful, robust, solid software. Software that*anyone* can USE. They protect their currency with the GPL."

Start with that thought. Think through the ramifications.

At a fundamental level, the members of the Open Source community are not interested in "money" or business deals. Their "currency" is the code itself. Just as in the more prosaic world, the economics of trade come into play, and the economics of this society operates on the trade of it's currency. But here's the twist, in the economics of the community, running off multiple copies of their currency doesn't devalue it. You increase the value of their currency by adding to it. The only way to devalue it is to remove it from the community, which is why the GPL exists.. Another difference is that this currency is directly usable, instead of just an abstract notion.

It's a completely different world of economics. The economics are 100% "Intellectual Capital" (for want of a better description). This isn't an exclusive membership, anybody is welcome to join in. Even a business. But any business that wishes to take advantage of the currency of the community had better learn about the internal economics of it first.

Businesses can and do form around this software that can be used by anyone. Properly done, such businesses serve as currency brokers between the community and the corporate world. In reality, most corporates don't deal with the community directly, but with one of these businesses operating as brokers.

It may be hard to understand, or even believe, but the Open Source community doesn't need the corporate world. It isn't even interested in the corporate world per se, outside of the fact that it has gained additional users of it's code.
Certainly the community appreciates the resources and status the corporate world can bring to the community. Who wouldn't? They will even make adjustments to accommodate some requirements of the corporate world. But they will not give up the fundamental economics of their community. If it comes down to a clash between the corporate world and the community, the corporate world can leave the community. It was open to join, it's easy to leave.

But here's the rub. There's all this juicy, useful, GOOD code that the community has. There will always be businesses that see an opportunity to stand as a bridge.

It may be a hard pill to swallow, especially for people steeped in the corporate world, but the reality is that it is the corporates that need to evolve to participate in the Open Source community. Go back and reread my simplistic summary to understand why.

I know it isn't easy to make the mental leap. I spent years steeped in the corporate world myself. When I finally made the mental leap, it shook me to my core.

denis | Nov 19, 2006 | 1:49AM

I'm no expert on open source, but I'm not sure I buy this altruistic analysis of the movement.

The open sourcers I know (I do know some!)are rather heavily ideological in their bent, and often work because it is something they can do and make clear and obvious progress to undermine the corporate world.

I don't buy the idea they exist independent of the corporate world; as a big example I'm not so sure the visual desktop effort would be made at all if MS wasn't there to provoke it. The hackers, after all, are comfortable with the Linux command line interface; and if they just wanted something easier, I doubt a de novo visual interface would happen to look like Windows.

I do believe there is a component of altruism and people working on projects because the projects are useful or can help society or are just fun and interesting (Linux and tsunami warning, gaming systems). I agree that they don't have to adapt to corporate America. But I don't agree that they exist independent of corporate America.

How many, upon hearing of Red Hat, had no reaction? I think the reaction was either, "I wish I'd thought of that," or "How dare those bastards commercialize my work and make billions?"

I don't think the reaction was neutral. The open sourcers push an ideology. And the currency isn't their software; their sense of worth comes more from the USE of their software and the validation of having people choose their software because it is the best code out there.

It is not even a new thing; it is the same thinking behind academic publication. It is difficult to get published, and more difficult to do something other people care about. Your reward is making a contribution to science, and the more it is cited and taken as a basis by others, the more prestige and honor it carries.

Open Source projects are not that much different.

Tony Castaldo | Nov 19, 2006 | 6:58PM

Although there may be altruistic individuals in the Open Source community, There is nothing really altruistic about the community itself. They just have a different value system.
If your interpretation implies the community is altruistic, you still don't get it. You are still trying to map your value system onto their's, which doesn't work.

The community is not homogeneous, there is just as wide a variety of personalities as in any other group.
Your description implies that your contacts within the Open Source community are the "evangelists" of the community. These individuals are in the minority, just as evangelists are a minority of any society or community.

You may not buy the idea that the community can exist independent from the corporate world, but it is a clear fact. The community existed and thrived long before there was any corporate involvement, and it will continue to exist even if all corporate involvement ceases. The growth rate of it's "currency" may slow down, but it will still grow.

Your comment "their sense of worth comes more from the USE of their software" shows how far off base you really are. Everybody "uses" the technology, even the most prolific developers. They are *ALL* users. The USER is not the center focus of the community, although they are a valued part of it. The community is primarily a group of developers, the goal is to create better and better code. Constructive feedback from users is important to that goal (very), but not central to it. Users that don't supply feedback are irrelevant.

The motives of the "current brokers" and the community are not the same. Even the motives of the evangelists and the community are not the same. It sounds like your impressions are formed from these 2 sources only.
I may have errored in thinking I could convey the concepts of the community to someone that has not had at least has some participation in it. In my case, I was actively involved for over a year before I really realized what I was dealing with, and it still managed to shake me up.

It's not purely an idealogical thing, although ideology does play a part. It's not altruistic, yet it is cooperative. Recognition from one's peers plays a part, but recognize exactly who are the peers here (not some vague "corporate" entity).
Psychologically, it's closest to the concept of "satisfaction of a job well done".

Your analogy with the pure academic is probably about as close as you have got. Although I think you also apply too much weight to the "prestige and honor" motivation than really exists in the pure academic. I'd suggest you start there, throw away everything, and rethink from the start again.

Don't confuse the values and currency of the community with the motives of a developer within the community. You wouldn't make that mistake in the corporate or political world, so don't make it here.

Consider the motivations of a rock climber. Why does he do it? The motivation of a developer in the Open Source community tends to be a lot closer to a rock climber than a rock star.

denis | Nov 21, 2006 | 4:32AM