Novell expands Microsoft alliance with China deal
Foreign firms to buy licenses for Linux
Linux software vendor Novell Inc. of Waltham is expanding its alliance with Microsoft Corp. into China, in a bid to encourage Chinese companies to start paying for the software they use to run their businesses.
Three Chinese firms - People's Insurance Company of China, The Dairy Farm Co., and Dawning Information Industry Co. - will purchase from Microsoft three-year licenses for Novell's SUSE Linux Enterprise Server software. "Both Novell and Microsoft are committed to furthering this partnership, and we couldn't be happier with the results to date," said Novell chief executive Ron Hovsepian.
It's the latest development in the partnership between Novell and Microsoft, which had frequently attacked the Linux operating system, created by thousands of volunteer programmers worldwide. Microsoft has claimed that Linux contains features that violate Microsoft patents, and hinted that Linux users could face financial penalties for patent infringement.
But in 2006, Microsoft and Novell agreed to a deal. Microsoft would sell millions of dollars in licenses for Novell's SUSE Linux software to customers who want to use both Linux and Microsoft's Windows operating system. In addition, Microsoft granted Novell immunity from any patent claims it might seek to enforce against other versions of Linux.
Because Linux software is available free of charge, many Chinese businesses use it without paying. These companies miss out on the service, support, and upgrades that companies like Novell can provide. By encouraging Chinese firms to pay for Linux, Microsoft is helping Novell tap a valuable revenue stream.
Microsoft and Novell will encourage companies to consider solutions that use software from both companies. For instance, Microsoft will tout its Hyper-V server virtualization software. Hyper-V makes it easy to run Linux and Windows software on the same computers simultaneously, so companies can pick whichever software best suits a given task. As part of the 2006 alliance, Novell and Microsoft engineers work together to ensure that Novell's version of Linux works smoothly with Windows. So Chinese companies may find Novell's Linux more appealing than rival versions from companies like Red Hat Inc., which has no such relationship with Microsoft.
Al Gillen, software analyst at IDC Corp. in Framingham, said that Microsoft wants businesses to pay for software, even if it's Linux instead of Windows. "From Microsoft's point of view, nonpaid Linux is a bad thing," he said, "because it implies that there's no value to the operating system, regardless of what operating system it is." Persuading companies to pay for Linux turns it into a commercial product, like Windows. That makes it easier for Microsoft to compete against Novell. "Over time, of course, Microsoft is going to try to move those customers off of Linux and onto Windows," Gillen said.
Hiawatha Bray can be reached at bray@globe.com.
