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.

Comments on ComputerWorld Australia interview

I’m in Australia right now in the middle of a 10-day tour through Asia, where I’m meeting with customers, partners, prospects, Novell staff, and yes, the press. I gave an interview to ComputerWorld Australia on Friday that’s caused a little bit of a dust-up. I posted my comments on Matt Asay’s blog, but I also wanted to get my thoughts out on my blog. (See, I told you that I’d start doing this blog thing more seriously this time.)

Anyway, here’s the full text of my response that I also posted on Matt’s blog:

================

Hi Matt —

 

After reading your blog posting, I wanted to set a few things straight about the article in ComputerWorld.

 

1) On the topic of taking credit for the Microsoft deal, this is an area where I was misquoted. There was an independent PR guy in the room with me who can verify this exchange took place:

 

Question asked: “Justin, what was your role on the Microsoft deal?”

Justin’s answer: “I was a member of the 15-person team that negotiated the deal with Microsoft.”

 

I would never be so arrogant to claim that I was the deal architect — because I wasn’t. The deal originated when Ron Hovsepian (Novell CEO) called Kevin Turner (Microsoft COO) in April 2006 and said “What would happen if we put customer needs in front of our own needs?” Ron & Kevin talked for a couple weeks back & forth, and then they brought Jeff Jaffe (Novell CTO) and Bob Muglia (MSFT SVP of Server Tools) into the conversation. I was invited onto the team in late summer, after the senior level executives had been talking for several months. Unfortunately, the ComputerWorld journalist didn’t get that right. I was a member of the deal team, but I was not the architect.

 

2) On the desktop point, the journalist asked me for my thoughts on the Red Hat Desktop. And I stand by my comments — Red Hat Enterprise Desktop 5 looks a lot like SUSE Linux Enterprise Desktop 10. I’ve even seen some Red Hat customer presentations where they took the Novell screenshots and just reproduced them exactly, except with a red background inside of SLED blue. The reality is that Novell does employ a lot of desktop engineers, we do contribute heavily to the many projects that make up the Linux desktop, and we are investing millions of dollars in desktop engineering. Novell – specifically Nat and team – is driving desktop innovation like Compiz, like Visual Basic Macros in OpenOffice, like Beagle search, like f-spot photo management. Miguel and team are driving Mono innovation. You may have a lot of complaints about Novell, but you’ve got to give credit where it’s due. We are the desktop innovators.

 

And as far as customers, well, Matt — you said it yourself… Novell signed the “biggest desktop deal in the history of the planet” when we sold 20,000 desktop seats at Peugeot. Trust me when I tell you that more big SLED wins are coming. Meanwhile, I keep waiting for Red Hat to announce a desktop deal comparable to Peugeot.

 

3) On the desktop partners, all I said that was we are talking with HP, Dell, and Lenovo. It’s the same thing I said a month ago in Red Herring… and it’s the same thing that both Ubuntu & Red Hat are saying. We’re all talking with the big IHVs. I wish I had more than just conversations to announce on that front.

 

4) Finally, on the Microsoft patent issue, there are a couple of points I need to clarify. The reporter said to me: “So this agreement means that Microsoft can’t sue Novell and you all have special patent protection, right?”

 

My answer to the reporter, which I’ve said thousands of times by now, was as follows: “All the deal with Microsoft provides is a covenant not to sue our customers. It’s a free world. Microsoft can sue anyone for anything and Novell cannot stop them. Microsoft could sue Novell tomorrow. But our agreement with Microsoft is all about creating peace of mind for the customer. If the customer deploys SUSE Linux Enterprise, then Microsoft has agreed not to sue them, just in the same way that Novell has agreed not to sue any Microsoft customer who deploys a Novell product.”

 

The reporter then asked about potential patent violations in Linux, and I replied: “Microsoft thinks there are patent infringements inside of Linux. Novell does not think there are any patent infringements inside of Linux. We’ve agreed to disagree with Microsoft on this fact. Our agreement just means that customers don’t have to worry if they deploy SUSE Linux Enterprise.”

 

So yes, I was misquoted slightly by the reporter who talked about “patent agreements.” I never said “patent agreements;” I said “there are no patent infringements in Linux.”

 

I know you’re not a big fan of the patent deal, Matt. I understand that, and when I attend OSBC in a few weeks, I hope that we can sit down and have a long discussion about it. The final item I’ll leave you with today is an excerpt from Bruce Lowry’s great posting on the Novell PR blogs on April 4:

 

“We don’t see intellectual property, in general, as big impediment to Linux adoption. That’s been our position for a number of years now. Go back and look at statements we made during the SCO debate, or when we launched our indemnification program. We’ve consistently argued that customers should not avoid Linux because of intellectual property concerns. At the same time, we’ve provided a level of comfort (via indemnification, our patent policy and, now, with the Microsoft agreement) to those customers who do have concerns about the issue. We certainly aren’t out in the market telling customers to use our Linux because it has patent protection from Microsoft. We’re out there telling them to use SUSE Linux Enterprise because it’s a strong distribution that will integrate well into their mixed environments. If the patent agreement with Microsoft means a few more customers than before are willing to take the plunge with Linux, that’s a good thing. But we don’t think patent concerns are driving Linux adoption one way or the other. The deal with Microsoft simply removes the issue from the table for customers.” (http://www.novell.com/prblogs/?p=315)

 

Thanks for letting me write a long post, Matt. While we may disagree from time to time, I do appreciate the open discussion forum that you are providing.

 

Justin