The Pact

I've been reading up on the news on Novell and Microsoft's agreement that happened during the week.

Novell has the second largest Linux market share after Redhat (in terms of $s) -- it produces the Suse distro.

Novell and Microsoft struck a deal, which entails both cooperating with each other in terms of interoperability and ensures that neither will sue the other over patent violations.

Obviously the deal will benefit both Novell and Microsoft, because,

1) Novell bases much of it's next gen software (much of it v innovative) on their own version of the Microsoft .Net platform called Mono (C# is a v nice programming language by all accounts). There has always been the possibility of Microsoft blowing Novell away over it's use of .Net - the possibility of being sued over .Net patent violations has been nixed.

2) Both firms will help the other's software cooperate better together. It looks like Novell will gain more from this than Microsoft. As one of Microsoft's key competitive advantages is that competitor's software cannot communicate well with Windows, whereas Novell's software is generally open for all to communicate with (a key principal of Open Source).

Interestingly this agreement also includes Microsoft helping Novell's office software use OfficeXML, Microsoft's next generation Word/Excel/etc. document format.


Enough of the technical, what are the strategic implications?


1) Novell has made Mono a no go area for it's competitors. Even though Mono is open source software it has admitted that there is a possibility that it infringes Microsoft's patents. Novell is safe, but whereas before it would have used it's own patent arsenal in defence of any patent attack against Mono (assured mutual destruction is how the patent system works in the software industry) it now can't.

Novell's competitors are now wide open to attack if they use Mono. Mono is now a large competitive advantage over Redhat and other Linux vendors for Novell.

2) Novell will be given preferential treatment by Microsoft, so that its software will communicate /better/ with Windows etc. than its Open Source competitors. This is a potentially huge advantage over Redhat, Sun's Solaris etc.

On the desktop level -- imagine being able to edit and view Microsoft Office documents with pretty much no bugs or imperfections -- lack of this is still the number 1 reason why Desktop Linux hasn't taken off in business.


No wonder NOVL stock increased by 20% on the news of the agreement.


Obviously there are losers. Linux itself. This is a divide and conquer move by Microsoft.

1) The strength of Open Source is that development is a cooperative effort among all Open Source developers. Mono will split the community. Novell and Redhat (and the rest) two of Open Source's largest contributers, won't be investing in one pool of Open Source software, but two, Mono and non-Mono projects.

2) By giving Novell a peak at Microsoft's secret communication systems and document formats, Novell will have a significant inroads into Desktop Linux and into businesses where Microsoft dominates the server side of things.

3) The push for an open document format was gaining steam - the state of Massachusetts are shifting away from MS Office documents, because it doesn't want its data being dependent on one corporation. Other governments are following. Novell's support of OfficeXML now detracts from that effort.


This picture reminds me of how the Dutch took over Indonesia, or the collections of Sultanates which made up Indonesia at the time. Generally they didn't directly fight against any Sultanates, rather they lent their troops and resources to fight /for/ particular Sultanates fighting against others. Of course the pay back was a monopoly on trade and other things which gradually weakened native Indonesian's control.

Novell looks like it could benefit greatly from Microsoft's help, but in the end Microsoft will still hold on to the keys of the kingdom, they can lock Novell out whenever they wish. So in the short term Novell will out-compete many of its open source competitor's, but in the long run they'll always be subject to a risk of hold-up.

I am not an open source zealot, it's a means to an end -- the destruction of software monopolies (specifically Microsoft's). Choice is good for all (imagine a world with no Firefox! no Apple!). Novell was a pillar of the fight for a competitive software industry, now it is not. That's a step backwards.