| Microsoft deal will hurt Novell |
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| Written by Sam Varghese | |
| Sunday, 19 November 2006 | |
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When Novell cut a deal with the Redmond-based maker of Windows earlier this month, it obviously did so out of a sense of desperation. Novell's bid to try and shore up its falling revenues by selling Linux haven't exactly seen its bottomline rise a great deal. Its income from Netware, the technology which made it the king of networking in the 1980s, is more or less flat. When the deal came about, it must have seemed like a lifeline. Going by what has been made public, Microsoft will pay Novell about $US348 million over five years. Around $US240 million of this is for SUSE Linux Enterprise Server "certificates" that Microsoft can resell, distribute or use. The two companies have signed a deal on patents under which Novell will get $US108 million from Microsoft for use of Novell's patents. Novell will fork out something in the region of $US40 million annually for five years to Microsoftwhich has agreed not to raise patent claims against Novell's end-user Linux customers. There's a few more dollars in the mix. Microsoft will dole out $US60 million on joint Linux/Windows marketing, mostly for pushing virtualisation. Redmond is paying $US34 million to push the joint Linux/Windows offering. An interoperability lab is also part of the deal - a group that works to improve the way Linux and Windows work together. Is Microsoft afraid that Novell holds patents which it has infringed and which could turn out to be the subject of future lawsuits? Remember, Novell has already won two anti-trust lawsuits against Microsoft and a third, with WordPerfect being the subject, is ongoing.
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