Strange bedfellows: Microsoft and Novell in Linux deal

It continues to amaze me how technology vendors can be competitors and partners at the same time. The latest example is Microsoft and Novell, which have announced a deal to promote interoperation of Microsoft Windows and Linux and -- the strange part -- promote each other's products.

According to CNET, the deal has many components--let me try to itemize them:

1. The parties will work to make Windows and Linux interoperate more effectively.
2. Microsoft will promote Novell's SuSE Linux and Novell will promote Windows.
   
3. Microsoft and Novell will provide each other's customers with patent coverage for each other's products, and Microsoft will not take patent enforcement action against individual non-commercial Linux developers.
4. Microsoft and Novell will create a joint research facility to develop new products for virtualization, web services for server management, and MS Office/OpenOffice compatibility.
5. Microsoft will optimize its virtualization technology for Novell's SuSE Linux, and Novell will do the same with its virtualization technology for Windows.
   
6. Microsoft will recommend SuSE Linux in cases where Microsoft customers want to run Linux and will promote Novell's maintenance and support offerings.
   
7. Microsoft and Novell will share help desk resources for each other's products.

It's not hard to imagine why Novell might want this deal, but why would Microsoft want to do anything to make it easier for data centers to run Linux? Based on our most recent technology trends survey at Computer Economics, we estimate that Linux averages just 5-7% of the processing workload in North American data centers. Microsoft, on the other hand, averages over 50% of the workload.

Once again, Slashdot has interesting insights (if you can get past the one-liners such as "Hell called, they want their ice back"). Here are some of the more plausible theories by Slashdot contributors on why Microsoft did this deal:

• Open source applications, such as SugarCRM, are gaining ground, and they tend to run better on Linux than Windows. Microsoft wants to have an opportunity to get those apps running on Windows.
  
  
• Microsoft is concerned about anti-trust actions and wants to appear more open to competing operating systems. The recent trouble with the EU over Vista is a case in point.
  
  
• Microsoft needs a low-cost OS offering for overseas markets (where it can't charge its usual price for Windows), so that it can gain ground in those markets and sell its applications.
  
  
• Microsoft wants access to and influence over Mono, Novell's project to develop an open-source .NET-compliant set of tools. (.NET is Microsoft's framework for web services.) Promotion of Mono is promotion of Microsoft's .NET framework, which is a platform for Microsoft's applications.
  
  
• Microsoft is trying to force consolidation of the Linux distribution market so that it has one larger competitor to deal with instead of a fragmented, decentralized enemy.
  

But the most interesting insight is this one, where the writer ties the deal to Microsoft's need to be able to control digital rights management (DRM) as it plans to do in the next generation of Windows:

Remember the recent MSoft/Xen collaboration? MS is making a version of Windows that can serve as the hypervisor that other OS's run on top of. Microsoft's interest here is to make sure Windows is at the bottom layer so they can enforce DRM, "trusted computing" and ultimate control of the box, and collect fees when everyone is using virtual Linux etc. What they want to prevent is a future where free software is at the bottom of the stack and virtual Windows instances are brought up when needed.

All these theories are plausible, and Microsoft is no doubt pursuing multiple objectives in this deal. But ultimately, I think it's all about control. For example, both Microsoft and Linux have virtualization technologies--but which will be the host and which will be the guest? Microsoft realizes that although Linux's share in the data center is small, it is growing. If Linux is not going away, then it's better for Microsoft to be the host than the guest. And where it must be the guest, Microsoft wants to ensure that it's a business partner (Novell) that is the host, not someone else.

Furthermore, Microsoft recognizes that Linux is threatening to make the bottom layer of the software stack a commodity, just as Intel has made the hardware layer a commodity. Although much of Microsoft's profitability in the past has come from Windows, Microsoft is positioning itself to derive even more value from its Office products and other applications, especially in overseas markets where Linux adoption is taking place even faster than in the U.S.

As I mentioned earlier, Microsoft already averages over half of the workload processing in data centers. Microsoft really doesn't need to increase that share, but it does need to maintain it. By interoperating with Linux it ensures that it maintains its position in the data center.

Update: The ink is barely dry on the Novell deal and now Microsoft CEO Steve Ballmer is suggesting that other Linux distributors form similar patent deals with Microsoft. Strange. Why all the talk suddenly about patent infringement? Is this a threat or an attempt to spread fear, uncertainty, and doubt? eWeek has the story.

Steven J. Vaughan-Nichols, writing for Linux Watch has good insights:

I used to think that Microsoft wouldn't dare use its patents against the Linux companies. My logic was that if Microsoft started really throwing its patent weight around, IBM or Novell could retaliate in kind. Thus, if any one company tried to smash Linux with an overly aggressive patent enforcement, they would be blasted by the pro-Linux companies with large patent portfolios. It was the old geopolitical idea of MAD (Mutually Assured Destruction) . brought into the PC age.

Well, now Novell and Microsoft have a non-aggression treaty. Yes, the Novell/Microsoft deal also frees individual, non-profit open-source developers, and programmers who work on openSUSE, from any Microsoft patent danger. But what about programmers who work on, say, Red Hat Linux?

I hope I'm wrong. I hope that in the next few weeks, I'm not writing about Microsoft suing Red Hat. That Linux company has had more than enough trouble recently with Oracle. Or, maybe it won't be Red Hat. Maybe Ubuntu would be the target.

Why do I fear Microsoft might try this? I fear it because Microsoft's proxy war on Linux via SCO is finally coming to its endgame. And no one, probably not even in SCO's own offices, believes that SCO will win.

So, what can Microsoft do? It can bend, ever so slowly, to the simple fact that Linux is here to stay -- but at the same time, it can free itself to attack individual Linux companies in the court room.

Cynical? Yes. But after covering Microsoft for almost two-decades, I trust Microsoft the least when it looks like they're co-operating with others the most.

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