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29 November 2010, 11:24

What's new about the Novell deal?

by Glyn Moody

The announcement that Attachmate would acquire Novell for $2.2 billion has naturally provoked a flurry of comments and analyses in the free software world. But it's important to pick apart the news to find out what is truly new – and to distinguish between what this changes, and what remains the same.

For example, the fact that Novell has been sold should not be such a shock. Rumours that it was seeking a buyer have been floating around for a while. It was no wonder that it sought an escape from its current business model: its lack of focus is clear even in the self-penned description found in the press release announcing its sale:

Novell, Inc., a leader in Intelligent Workload Management, helps organisations securely deliver and manage computing services across physical, virtual and cloud computing environments. Novell helps customers reduce the cost, complexity, and risk associated with their IT systems through our solutions for identity and security, systems management, collaboration and Linux based operating platforms. With its infrastructure software and ecosystem of partnerships, Novell integrates mixed IT environments, allowing people and technology to work as one.

What a mess.

If the sale itself is no surprise, the buyer is: many had expected VMware to pick up the company. But as Steven J. Vaughan-Nichols rightly notes:

The last thing Microsoft wanted was for VMware, its major cloud and virtualisation rival, to have a major operating system to offer to its customers. Microsoft is having a hard enough time getting its Hyper-V virtualisation and Azure cloud marketing story straight without having to compete with the one-two punch of VMware and SUSE Linux.

(Ed. - Vaughan-Nichols speculates on where Attachmate got the financing for the deal and points the finger firmly at Microsoft).

This brings us to another element that has surprised many people: Microsoft's deep involvement in this sale. As the press release explains:

Novell also announced it has entered into a definitive agreement for the concurrent sale of certain intellectual property assets to CPTN Holdings LLC, a consortium of technology companies organised by Microsoft Corporation, for $450 million in cash, which cash payment is reflected in the merger consideration to be paid by Attachmate Corporation.

But perhaps this should have been expected: Novell has been an important partner for Microsoft – not least in terms of attacking other open source companies by proxy, and generally muddying the waters around free software. And it was precisely this opaque issue of “intellectual property assets” that has yoked Novell and Microsoft together for half a decade, ever since the famous / infamous agreement in November 2006, which specified:

The patent cooperation agreement enables Microsoft and Novell to give customers assurance of protection against patent infringement claims. It gives customers confidence that the technologies they use and deploy in their environments are compliant with the two companies’ patents.

As part of this agreement, Microsoft will provide a covenant not to assert its patent rights against customers who have purchased SUSE Linux Enterprise Server or other covered products from Novell, and Novell will provide an identical covenant to customers who have a licensed version of Windows or other covered products from Microsoft.

Next: IP assets

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