Microsoft: Novell deal a milestone despite squabbles

Landmark deal could still bring together open-source and commercial software business models, Microsoft lawyer Brad Smith says.

SAN FRANCISCO--Microsoft's deal late last year with Novell may have set a record for shortest honeymoon, with the two companies publicly bickering within days.

Nonetheless, Microsoft top lawyer Brad Smith hails the deal as a landmark that still holds the potential of bringing together the open-source and commercial software business models.

"I actually think that when the decade is through, we'll look back, and we'll say the agreement between Microsoft and Novell was one of the most important milestones in the decade from an (intellectual property) perspective," Smith said Thursday at a dinner with a handful of journalists.

Brad Smith Brad Smith

That may be, but the two principals in the deal have hardly been sending love letters to one another. Microsoft and Novell on November 2 announced the pact, under which Microsoft agreed not to sue Novell Linux customers for patent infringement, while Novell agreed to pay Microsoft royalties, among other provisions.

That same month, Microsoft CEO Steve Ballmer claimed that the deal amounted to an admission that Linux infringes on Microsoft patents. Novell CEO Ron Hovsepian took issue with that in an open letter.

"Our agreement with Microsoft is in no way an acknowledgment that Linux infringes upon any Microsoft intellectual property," Hovsepian said in the letter.

Public agreement isn't necessary, so long as the deal is in place, Smith said.

"People can debate how much (the patent protection) is needed, but the reality is it's provided," Smith said.

And while Microsoft and Novell exchanged verbal jabs, customers have really taken to the notion, Smith said. Under the deal, Microsoft resells certificates for Novell Linux software and support. In the three months since the deal was inked, Smith said, Microsoft has seen far more sales of the certificates than it had anticipated. The company initially laid plans for up to 70,000 certificates to be sold in the first year. In the first three months, it has already sold more than 35,000, according to a company representative.

Smith is also looking for pacts with other companies that distribute Linux or use it in their products.

"We are having discussions with other companies that I think share an interest in exploring this kind of model," Smith said. "That includes companies that distribute open-source software, and it includes companies in the embedded space."

He declined to offer any specific names, however.

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