Unexpected fruits emerge from Novell/Microsoft pact

10 Oct 2007

Almost a year ago the unbelievable happened when long-term sparring partners Novell and Microsoft called a truce and worked out an agreement to make Windows and Linux work together on corporate networks. Now the two companies are working on a range of joint ventures, Novell’s chief executive told siliconrepublic.com.

Speaking exclusively to siliconrepublic.com, Ron Hovsepian (pictured) revealed that the interoperability alliance made strategic sense for both companies and that now they are working on at least 17 new areas of business.

“It was very simple from a customer’s point of view. If you are a CIO and you have a .Net Windows application environment and your stack environment is a J2EE open-source stack you want greater interoperability. No question.

“We felt that we were already doing a good job differentiating ourselves with SUSE Linux but with greater interoperability in heterogeneous IT environment it accelerates value for customers in the marketplace. The fact that we can deliver virtualisation of Linux on top of Windows and vice versa can reduce work and add value for customers. That was the heart of the decision.”

Hovsepian said the origination of the pact began with a conversation with Microsoft chief operating officer Kevin Turner, who Hovesepian knew from Turner’s time as CIO at Wal-Mart.

“As a CIO you want things to run smoothly. There is integration work but you want choice and to be able to make things work well together. We decided that a customer should be free to choose between an open-source J2EE platform or to put in a .Net Windows platform. After the CIO makes his or her choice we make it easier for the CIO.”

Hovsepian said that as part of the pact both Microsoft and Novell would meet on a quarterly basis to review the current status of the project and that this has resulted in up to 17 new potential project areas emerging.

“These really came from the customers who are driving this. We’ll be meeting later this month to discuss these new projects and some of these we’ll make public in the not-to-distant future.”

Since the pact, Hovesepian said that the two companies have managed to put the dispute of the last 20 years behind them, although Novell and Sun were key witnesses in the EU Court of First Instance which recently dismissed Microsoft’s appeal against a US$613m (€441m) fine for allegedly abusing its dominant position in the global software business.

“There is the obvious long-term competitive nature to our relationship but in terms of interoperability between Windows and Linux we have been able to see past that and focus on the customer. That’s an important differentiator for both companies.”

Looking at the strategic importance of SUSE Linux to Utah-headquartered Novell, Hovsepian said that SUSE Linux product invoicing is up 243pc year over year and that overall revenue in this area is up 70pc on last year.

He said that Novell’s role in the fast-growing server virtualisation market through SUSE Linux has placed the company in the top quadrant of virtualisation players, competing with companies like VMWare, and pointed out that the company has won major deals in this area with BMW and Sumitomo Electric.

“Our hypothesis is that multiple virtualisation engines and hypervisor will become commoditised and the real value for the customer is one console to manage multiple virtual machines and servers whether they are Linux, Unix or even Apple.”

Since assuming the role of chief executive over a year ago, Hovsepian says his strategy has remained unchanged. “We made a bet 15 months ago that Linux was going to mature to become a desktop-to-data centre product set. The interoperability agreement with Microsoft has also opened new opportunities in the sense that SAP for example has selected us as their exclusive Linux partner.

“The desktop element is particularly critical”, he added. “PSA Peugeot has selected us to replace over 20,000 desktops with SUSE Linux. In India, Tamil Nadu Electronics have chosen us to replace over 30,000 desktops with SUSE Linux. Dell in China and Lenovo have both committed to pre-load SUSE Linux so our desktop strategy is getting stronger and stronger.

“Last week IBM announced an open client collaboration unit, the reality is the Lotus open client product is actually running on a SUSE Linux enterprise desktop. These are exciting times in the marketplace for Linux which is still quite young.

“The innovation curve, that’s the beauty of open source, this allows us to innovative at a higher rate than ever before. Therefore we can bring fresh problem-solving capabilities to the customers versus trying to push proprietary software.

“The simple truth is that we are going to live in a mixed-source world for the next three to five years. For that reason you need both proprietary and open-source living together. If you’re a CIO deciding whether to develop on a .Net environment or a J2EE open source stack, this is what you’d want to hear,” Hovsepian said.

By John Kennedy