OBSC and Microsoft selling Linux

Yesterday, I participated in a panel at the Open Source Business Conference in San Franciso about “Is the Novell-Microsoft agreement good for open source?” In that panel, I said that Microsoft was Novell’s #1 sales channel for Linux in Q1 2007.

Matt Asay called me out on this statement in his blog. As usual, I disagree with Matt.

Here’s why I am not ashamed to say that Microsoft was Novell’s #1 sales channel in Q1 07. First, it’s old news… we announced this as part of our Q1 earnings call on March 1. Second, what I didn’t make explicitly clear — and this is my fault — was that every single one of these sales involved Novell reps and Microsoft reps working together to sell Linux. Imagine that… Novell and Microsoft going into customers together to talk with customers about how Linux and Windows can work together. The value prop obviously resonated with our customers.

I think we all have to admit that Microsoft has a pretty good salesforce. You don’t get to $44 billion in revenue without one. And that means that Microsoft has a lot of high-level contacts in the customer accounts. Our relationship with Microsoft enables Novell to call at the highest levels of an organization… that’s pretty much Sales 101. And by having Microsoft lead the deals, our cost of sales goes down, and our sales reps get more leverage because they can cover more accounts. That’s pretty much Sales Management 101 — get the most leverage you can out of your salesforce.

While Matt and I don’t always agree on everything, I am pleased he did invite me to OSBC, and for that, I thank him. I appreciated the opportunity to talk directly with some members of the open source communuty face-to-face and answer as many questions as possible. For me, the best thing about the conference was that at the end of the panel, the moderator (Doug Levin from Black Duck), said “Was this panel useful to you?” and more than 80% of the room raised their hands to say “yes.” I’m sure that not all of them agreed with me, and that’s fine. It’s the dialogue that is important.

On Dell & Ubuntu

Dell announced today that they will be shipping Ubuntu “Feisty Fawn” as a preloaded operating system on three Dell PCs targeted at the consumer market. As you might expect, I’ve got a few thoughts on this one.

As proponents of open source and Linux, we’re happy to see Linux being preloaded onto consumer desktops. This is just one more proof point in the continued growth of Linux. However, I wouldn’t necessarily refer to the Dell-Ubuntu deal as “major.” Dell is only going to load Ubuntu on three machines targeted at the technical consumer market, and the only support option available will be through online technical self-help forums, which will be monitored by the community. We really view Dell’s announcement today as a loading Linux onto desktops aimed at the technical enthusiast community — the same community of people who voted on Dell’s Ideastorm website.

Novell’s target customers for the Linux desktop are not the same folks who have been voting on Dell Ideastorm. Our target customer is the enterprise business user, and so we’ve focused SUSE Linux Enterprise Desktop squarely at the business market. Look at our win at Peugeot, where we sold 20,000 copies of SUSE Linux Enterprise Desktop for general purpose business use. We wouldn’t have won that deal without delivering the reliability and support that business customers demand.

Novell believes that the Linux desktop is ready for mainstream deployment in the enterprise, and that means you need to have enterprise quality support — something that Ubuntu does not offer. Novell is in serious conversations with several leading hardware OEMs about preloading a Linux desktop that will be targeted at broad enterprise use. When we release SUSE Linux Enterprise Desktop on a preloaded machine, it will come with the enterprise support that our customers require to run their businesses. Stay tuned for more details.