Novell-Microsoft: Keep Your Friends Close, Your Enemies Closer

Novell's latest 10k filing is quite the read. At least if you do it selectively.

For one thing, as pal Ed Moltzen noticed New Year's Eve. Novell logged a pretty spiffy $355.6 million from Microsoft for the year ending October 31, 2007.
That cash emanates from agreements the two companies forged to 1: foster fruitful coexistence between Windows and Linux in mixed environments; 2: develop management tools to achieve #1; 3: development of translators to bridge the Microsoft Office, Open Office chasm; improve directory and identity management interop between Active Directory and eDirectory. And, don"t forget that Novell is doing "Moonlight", a clone of Microsoft Silverlight multi-media development toolset for Linux.

For more, see Novell CTO Jeff Jaffe's blog.

Here are some other Microsoft-related snippets from Novell's 236-page 10K filing. (Ctrl-F is a wonderful thing, no?)

"On November 2, 2006, we entered into a Business Collaboration Agreement, a Technical Collaboration Agreement, and a Patent Cooperation Agreement with Microsoft Corporation that collectively are designed to build, market and support a series of new solutions to make Novell and Microsoft products work better together for customers. Each of the agreements is scheduled to expire on January1, 2012."


"We will continue to be competitors of Microsoft, but it is our goal that through this set of agreements, Microsoft will serve as an important indirect source of channel sales for Novell Linux sales."

"On November12, 2004, we filed suit against Microsoft in the U.S.District Court, District of Utah. We are seeking treble and other damages under the Clayton Act, based on claims that Microsoft eliminated competition in the office productivity software market during the time that we owned the WordPerfect word-processing application and the Quattro Pro spreadsheet application. "


There was some back and forth in court but the suit lives on: "On October15, 2007, the U.S.Fourth Circuit Court of Appeals affirmed the District Court ruling, thereby allowing Novell to proceed with the remaining claims against Microsoft. While there can be no assurance as to the ultimate disposition of the litigation, we do not believe that its resolution will have a material adverse effect on our financial position, results of operations or cash flows. "


"Revenue from our Linux platform products increased 69% year-over-year in fiscal 2007. The strength of our revenue growth was due in part to our agreement with Microsoft which was signed in November 2006."


"Our Workgroup business declined 9% in fiscal 2007, excluding the impact of the Microsoft agreement, as compared to the same period a year ago."


So Novell and Microsoft are pretty much chained together in several respects--via legalities or desire for good customer care. The question is: How are these two scorpions in a bottle really getting along?

Barbara Darrow, industry editor of Redmond Magazine, Redmond Developer News and Redmond Channel Partner, can be reached at [email protected]

Posted by Barbara Darrow on January 02, 2008


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