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Re: Novell's Push for Linux Partnerships and Sales

  • Subject: Re: Novell's Push for Linux Partnerships and Sales
  • From: "Rex Ballard" <rex.ballard@xxxxxxxxx>
  • Date: 17 Oct 2006 18:56:45 -0700
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Roy Schestowitz wrote:
> Novell Promotes Tom Francese to Executive Vice President for Worldwide
> Sales
> ,----[ Quote ]
> | Tom's deep background in the partnering world will help us
> | further grow the partner ecosystem around Novell's Linux
> | and IT management offerings, a critical factor for our future
> | success."
> `----

It's beginning to look like Novell is about to get even with Microsoft
for their little double-cross back in 1994.  For those who don't
remember, Novell, under CEO Ray Noorda, purchased the rights to UNIX
from AT&T.  Noorda was planning to not only offer UnixWare as a server,
but also as a workstation.  They were going to offer licenses at retail
for around $200 ($50 more than MSRP for Windows), and had initiated
conversations with some OEMs for quantity prices that were also
competitive with Microsoft.

While Noorda was in Asia, talking to one of the major OEMs, some very
high ranking members of Microsoft met with the Novell board of
directors.  They issued an ultimatum.  Unless Novell immediately
terminated it's workstation effort, Microsoft would market NT as a file
and print server.  They were given about 3 hours to make the decision
(before Noorda could be contacted for advice).

Appearantly the board of directors hadn't heard of any of the projects
Microsoft had already initiated to make NT function as a server.
Appearantly they didn't talk to Noorda before making their decision.
Novell accepted the deal.  They immediately terminated all of the
people working on the workstation projects.  When Noorda returned, he
went berzerk.  He didn't quit immediately.  Prior to leaving, he
released nearly all of the AT&T code under BSD licenses.  He then left
Novell, formed the canopy group, and formed Caldera and Trolltech, as
well as a number of other companies - dedicated to supporting a
Linux/Unix based competitor to Microsoft.

Caldera became a very successful competitor, so successful in fact,
that they couldn't support all of their customers.  They won contracts
for franchises, including McDonalds, Burger King, Pizza Hut, and many
others.  They grew so fast that Ransom Love decided to purchase the
support organization from SCO.  But to do it, he had to arrange stock
swaps and debentures.  Unfortunately, this made both SCO and Caldera,
post-merger, very vulnerable to proxy fights and a hostile take-over by
a determined group of investors.

Noorda still has TrollTech, and KDE is very competitive with the
Microsoft user interface.

Meanwhile, back at the ranch, a few people have good memories of their

When Microsoft took control of SCO/Caldera, it seems that SUSE looked
like a pretty good deal.  It was cheap, but SUSE had a strong
reputation in Europe and even did pretty well in USA.  Many considered
SUSE the "Luxury car" version of Linux.  Novell figured that if they
didn't do something, Netware wasn't going to be giving them much more
revenue.  On the other hand, if SUSE could provide revenue as a full
function server, there was also the possibility that Novell could
leverage their service and support organization into a workstation
environment that could compete head-to-head with Microsoft in the OEM

> http://biz.yahoo.com/prnews/061017/sftu042.html?.v=77
> Novell's CEO has said that Microsoft uses scare tactics
> to prevent OEM's from accepting GNU/Linux.

Keep in mind that HP, Dell, and Lennovo have made public announcements
of deals where they were going to ship OEM installed SUSE Linux with
their high-end workstations.  Within less than 72 hours, these offer
were withdrawn, very suddenly.  At minimum, this would be a violation
of some securities laws if they fraudulently announced just to
pump-and-dump novell stock.  On the other hand, if Novell had
agreements with these OEMs, and the OEMs had to cancel their
agreements, it's quite likely that the OEMs were very clear about what
the threat was, and what might be an acceptable counter-offer.

Given that Microsoft seems determined to do a Baskin Robbins* on the
OEMs, it's quite likely that the OEMs are getting very interested in a
severe defection to Linux.  Clearly, unilateral submission to current
EULA will be a certain recipe for bankruptcy.

I don't see Michael Dell, HP, Toshiba, Sony, or Lennovo looking at
Vista EULA agreements, while Microsoft hands Apple "carte-blanche"
permission to run Windows on UNIX.  They could very easily opt to take
retaliatory actions.  Clearly the courts, especially the US courts are
powerless, and the EU seems to be inneffective as well.  The
marketplace may ultimately come down to 2 out of the top 6 OEMs
flipping and going with Linux instead of Windows.  If these companies
make it clear that they are only willing to buy, say 40% of the
machines with Windows, unless Microsoft gives them not only OEM terms
they like, but also EULA terms they like, then these companies may opt
for another alternative.

For the first time in almost 25 years, Microsoft could find that it's
system will not be preinstalled on the majority of the machines sold by
the major OEMs.

* (Baskin Robbins= crushed nuts, whipped cream, and popped cherry).

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