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.

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