Can the FSF derail the Microsoft-Novell Suse pact?

Can the FSF derail the Microsoft-Novell Suse pact?

Summary: The crosscurrents are still swirling around Microsoft's deal with Novell to resell Suse Linux. And the Free Software Foundation may have found an avenue to hit Novell in the pocket.

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The crosscurrents are still swirling around Microsoft's deal with Novell to resell Suse Linux. And the Free Software Foundation may have found an avenue to hit Novell in the pocket.

Late Friday, Reuters reported that the Free Software Foundation has begun reviewing Novell's right to sell new versions of Linux operating system. The FSF controls key parts of Linux. The review and a decision should be made within the next two weeks or so.

According to Reuters:

If the foundation decides to take action, the ban would apply to new versions of Linux covered under a licensing agreement due to take effect in March.

While it's not clear what will happen from the FSF review--or whether it even matters financially to Novell--there certainly is enough FUD to make a mixed source customer think twice about Microsoft's Suse certificates, which basically mean that the software giant resells Novell's flavor of Linux.

Factoring out the emotion of the Microsoft-Novell deal--there are plenty of critics who hate the deal--the hubbub over the partnership may have financial implications.

Meanwhile, Wall Street is already trying to handicap what the FSF move means.

SunTrust Robinson Humphrey analyst Terry Tillman notes that the FSF flap could cause enough uncertainty to derail customer interest in the Novell-Microsoft pact. Tillman writes:

"Our sense is that the FSF might say that Novell's agreement basically gives its Linux customers an advantage in the area of patent protection that is not afforded to the broader Linux community.  After its analysis, which is expected to take 10-15 days, the FSF could use legal action to try and prevent Novell from continuing to re-distribute Linux software."

However, there are no clear answers to this one as Tillman notes that "Novell likely drew up an ambiguous enough contract with Microsoft that makes a smoking gun difficult to uncover."

The worst case scenario for Novell? The FSF prohibits Novell's usage of its intellectual property. If that happened, Novell would have make the costly move to rework its enterprise Linux products.

JP Morgan analyst Aaron Schwartz concludes that the FSF positioning isn't likely to derail Novell's distribution rights. Says Schwartz:

"The specifics of the agreement, specifically the patent covenant, will continue to be scrutinized and there will likely always be a population of the open source community that disagrees with the deal. The open source community has pressured the FSF to use GPL 3 to prevent similar deals from occurring-and this pressure has been consistent since the announcement of the agreement in November. However, to conclude from the Reuters article that the FSF will take action against Novell we believe is incorrect."

While the Microsoft-Novell pact could spark FSF-inspired court drama, the bottom line is that this unpopular partnership is gaining some momentum. And if you believe that mixed source environments are the future in enterprise software the fact the early success of the Microsoft-Novell arrangement shouldn't be that surprising.

Says Schwartz:

"We continue to believe the reception of the transaction is much more optimistic in the eyes of the customer. Novell saw 35K license activations through MSFT through the end of January, ahead of the company's 20K target. While the financial impact of the deal will be immaterial in FY07, we believe a derivative impact has been a more open minded view from the customer towards both Suse and heritage Novell products."

And Schwartz isn't alone. Citigroup analyst Brent Thill raised his projections for Novell based on the early returns from the Microsoft pact. Novell projected Microsoft-subsidized Suse Linux subscriptions would result in revenue of $4 million to $7 million. But based on the 35,000 Suse subscriptions already activated Thill projects revenue in the $30 million ballpark. For fiscal 2008, Novell should garner $56 million in revenue from the Microsoft-funded Suse subscriptions. That's up from Thill's initial projection of $25 million.

Bottom line: Pretty soon the Microsoft-Novell pact will be institutionalized. The FSF flap may be the last chance to throw a monkey wrench into the partnership.

Topic: Enterprise Software

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68 comments
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  • So much for "free"

    Apparently "free" is defined by the FSF as "things we like".
    ye
    • It's "free" as in freedom....

      ... not "free" as in beer. If the MSFT-Novell pact allows one vendor to be excepted from IP licencing whilst suing everyone else then the FSF has decided that such a move is against the IP that they hold.

      They are exercising their right to licence their own IP just as Microsoft is doing.
      bportlock
      • Exactly...thus the reason for my post.

        Apparently freedom is defined as "only those things we like".
        ye
        • Exactlly right...

          Freedom is dictated by Stallman in this case and as he hates Microsoft...
          No_Ax_to_Grind
        • Well...

          The GPL was designed as a community thing where very contributor was equal (or at least potentially so). That's part of the freedom it provides. People who do the GPL thing agree to abide by the GPL.

          It's kind of like Microsoft expects people to actually abide by their license when they get Microsoft software. Just a guess, but I think that you would probably be upset at people who break (or try to weasel around) Microsoft's licensing agreements.

          Why therefore are you complaining about this issue?
          zkiwi
    • the licence is a tool for the freedom of the community

      I'm agnostic on this, but as far as I see it, Novell seem to be subverting the freedom of the community in it's agreement with Microsoft.
      What do you expect them to do, buy some vaseline?
      stevey_d
  • They just don't get it...

    The MS fans are always going on about respecting licenses but when it comes to the GPL they suddenly seem to flip-flop.

    The fact of the matter is that Novell uses software NOT created by them and they are welcome to as long as they abide by the license chosen by the creators of the software.

    If Novell does not wish to abide by the license they are free to create their own code and license it any way they want.

    In my mind if legal obfuscation results in unequal protection it clearly violates Section 7 of the GPL. GPL v3 will be designed to protect the integrity of the license and prevent legalese end-runs around the letter of the GPL.
    Tim Patterson
    • It is my understanding that the agreement is...

      ...completely legal under GPL v2. The problem is that they're considering moving to GPL v3 for future releases in an effort to close these "loopholes" and enforce their ideals. Again: So much for freedom.
      ye
      • Any legal opinions out there?

        Is this something that could be drawn out in court over IP, GPL and other facets of Linux? While the Microsoft-Novell deal may be well crafted that's never stopped a long lawsuit from dragging on. That would be terrible for Novell.
        Larry Dignan
        • It would be terrible for Linux as a whole.

          This crusade against freedom by some open source idealists is only going to hurt Linux. Not help it.
          ye
          • I can see that

            if I'm a corporate customer I don't want the potential headaches of FSF heckling with my mixed source plans. overall, the msft-novl pact is probably good for a corporate customer. At the least they are more likely to give SUSE a look
            Larry Dignan
          • Not!

            Microsoft did their best years ago to remove the word Novell from corporate IT shops. MS killed them and now Novell is demeaning their own coffin.
            nomorems
        • Marbux

          Keep in mind that:

          * the actual text of the contract is being kept under wraps
          * If you want legal advice, pay for it
          * However, lawyers like the sound of their own voices at least as much as anyone else.

          That said, Marbux (over on Groklaw) has opined that Microsoft may well have waived any right to go after non-Novell parties on the grounds of

          a) conspiracy, and
          b) prior knowledge of the GPL
          c) basic principles of contract construction

          The "conspiracy" part derives from the legal principle that two can't agree to do something in cooperation that neither could legally do separately. Application obvious.

          The "prior knowledge" part derives from Microsoft knowing that the GPL means that Novell (and its customers) can't legally distribute GPL software without passing along all the rights that they have themselves -- which means that if those customers receive rights from Microsoft, either they can pass them along or they don't get the software.

          Contract construction requires that if reading a clause leads to the clause being pointless, that reading is rejected. In the above case, Microsoft knew that offering rights to Novell's customers that would end up denying them the use of the very software that they supposed [u]gained[/u] from Microsoft would be pointless -- therefore, Microsoft must have intended that those customers received something useful. In this case, they would receive the transitive rights that the GPL requires.

          Now, IANAL. Even those who are lawyers will tell you, first off, that nothing counts until it lands in court. However, the above analysis sorta looks plausible enough that a lot of Linux-using corporations are treating the whole MicroVell deal as a non-event.
          Yagotta B. Kidding
          • Opine all you like, the GPL was not

            violated in anyway. Every lawyer the FSF can find has tried to find a violation and came up empty. Go ahead and go to court, all teh court cares about is what is actually in writing...
            No_Ax_to_Grind
        • Better Than Legal Opinions

          Public opinion is what determines the
          winning party, after all. No matter what a
          court decision is, people will not purchase
          a product they perceive to be illegal,
          immoral, or unethical, after they learn the
          facts. Although Microsoft has exclusive news
          coverage, education by word of mouth and
          internet forums and blogs are growing like
          wildfire.
          Anyone with a 3rd grade education can read
          and understand the GPL license, while a
          Philadelphia lawyer would have a hard time
          trying to figure out all the legalese
          gobbledegook and angles thrown into
          Microsoft's EULA. That, plus enough money to
          buy ALL the lawyers, ALL the judges, and ALL
          the press is ALL the advantage that
          Microsoft has.
          That is MORE THAN LIKELY Microsoft's
          sinister plan for the whole farce. To
          attempt to draw the FSF into a legal battle
          that would seriously cripple them, even if
          they won after all. Microsoft would "clean
          up" in the meantime.
          A legal battle would be a travesty, and
          completely unnecessary if anyone with a 3rd
          grade education would check it. See if you
          can understand simple English here:

          http://64.233.167.104/search?q=cache:l-289LwmxrMJ:www.cyber.com.au/about/comparing_the_gpl_to_eula.pdf+Open+Source+and+Microsoft+license+comparison&hl=en&gl=us&ct=clnk&cd=27
          Ole Man
        • Two courts sided with the Copywrite owner over GPL.

          All that GPL does is grant usage of materials covered under Copywrite protection. That is all any such license does is grant usage of Copywrited code as per some restrictions (can't remove Copywrite notice, must pay Copywrite owner a commission, etc.).

          In the US, there was a case: [url=http://www.aftermarket.org/Government/Grassroots_Activities/hr2735.asp]
          DrewTech v. SAE[/url]

          In Germany, there was another case: [url=http://linuxdevices.com/news/NS8564956607.html]GPL upheld against D-Link in German court[/url]

          Basically 2 counties courts ruled in favor of the Copywrite holders (who chose to release under the GPL).
          B.O.F.H.
      • There is no freedom to steal code and sell it .

        The whole point is to prevent corporatations, like Microsoft, from stealing code and using it in their proprietary products. EOS. Don't like it? WRITE YOUR OWN CODE!
        nomorems
  • the M$-$use pact should die

    because it creates a protection fee and a tax on innovation.
    Linux Geek
    • How so?

      Novell is not in a position of granting any Linux IP rights to MS, Unix IP perhaps but not Linux IP. Novell on the other hand is granted access to MS IP that the other Linux distro vendors do not have. That may give Suse a leg up over Redhat and the others but I don't think that it is illegal.

      Just because a company does business with the evil empire doesn't mean that they are breaking the law, even in Stallman's socialist world.
      balsover
  • Since the kernel will remain GPLv2, this suit is moot.

    Linus Torvalds made it clear that the kernel will not be moving to GPLv3. He said he was an Oppenheimer or a pragmatist rather than an idealist. Without an OS kernel, the OSS fanatics will need to come up with a new one to keep it "pure". I also believe that a lot of applications will not move to GPLv3 so they can operate in most environments.

    I have a thought going on here. Who is going to commit suicide first, Balkanized DRM or GPLv3? This is basically imperialism versus communism. It isn't pretty to see greed masquerading as something else while the customer is forgotten. The ultimate in freedom is the ability to live with tyranny and steal away their followers rendering the tyrants impotent. As far as I am concerned, both these camps are good at restrictions.
    osreinstall