Novell goes public with terms of Microsoft Linux deal

Novell goes public with terms of Microsoft Linux deal

Novell has published details of its November partnership agreement with Microsoft

Novell has published details of its landmark November 2006 partnership agreements with Microsoft.

Novell on Friday published redacted versions of the three agreements it signed with Microsoft in its annual 10K filings to the U.S. Securities and Exchange Commission, providing the public with its first detailed look into a deal that some see as critical to the future of Linux. The 10K filing had been delayed by an internal stock options review at Novell, which was concluded Wednesday.

Under the terms of the agreements, Microsoft will spend hundreds of millions of dollars on licensing fees and sales and marketing costs over five years, including $US240 million for SUSE Linux Enterprise Server subscription certificates. For its part, Novell has agreed to pay Microsoft a percentage of revenue from open-source products.

Linux advocates are expected to scour the documents for signs of how the agreement may affect Linux and whether anything in it will put Microsoft or Novell in potential violation of the upcoming version 3 of the GNU General Public license (GPL). The GPL is used in licensing many components of the Linux operating system.

Open-source advocate Bruce Perens said he would be looking to see exactly what Novell was given through the deal and whether there is any requirement for the Linux vendor to defend Microsoft's patent claims. "What I'm actually looking for is, to what extent was there a violation of faith?" he said.

Microsoft has claimed that Linux violates more than 235 of its patents, and because the deal offers patent protection to Novell users, it is seen as potentially driving a wedge in the Linux community. "Novell had a choice here, and Novell's choice was to be in the same boat with the rest of the free software community, or not," Perens said.

Based on an initial reading of the documents, Perens said the deal does not appear to provide full patent protection to Linux users. "Novell did not get complete rights regarding Microsoft patents," he said. "For example, office productivity applications are specifically excluded. ... is excluded by name, WINE and Open-Xchange are excluded by name,"

Novell executives declined to be interviewed about the filings. "We've already provided the high-level comments when we announced the deal in November -- around making Linux and Windows work better together, the areas of tech cooperation, the covenants not to sue. All the customer-focus stuff that drove the deal," said Novell spokesman Bruce Lowry, via instant message. "The agreements provide more meat on the bones in support of those objectives."

The patent agreement between the two companies seems to make it clear that Novell does not accept any of Microsoft's patent claims. Section 3.4 says, "Nothing in this Agreement shall imply, or be construed as an admission or acknowledgement by a Party, that any Patents of the other Party are infringed, valid or enforceable."

Microsoft and Novell say the deal has helped push Linux adoption in the enterprise by promoting interoperability between the two platforms.

Contrary to its image as a threat to open source and Linux, Microsoft is the chief source of Linux business for Novell, and the deal between the two companies has been a boon for SUSE Linux, said Justin Steinman, director of marketing for Novell's Linux and Open Platform Solutions, speaking earlier this week.

"Microsoft was Novell's number one channel partner in the first quarter of 2007," he said. "We've seen 60 percent (first-quarter) growth in SUSE, year over year."

Paul Roberts of InfoWorld contributed to this story.

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