Novell CEO: We'll 'fight' Vista

Novell will continue its march against Microsoft and any uptake of Vista despite a recent alliance with the software giant, said Ron Hovsepian, Novell president and CEO, who was in Sydney today. Also: Watch the four-part video.
Written by Chris Duckett, Contributor and  Scott Mckenzie, Contributor

update Novell will continue its march against Microsoft and any uptake of Vista despite a recent alliance with the software giant.

(Please click the Playlist above to access the four-part video.)

"We're excited by the muted reaction to Vista," Ron Hovsepian, Novell president and CEO, told the media at a breakfast meeting in Sydney today.

"We're going to attack [Microsoft] vigorously and go after their footprint as much as we can," Hovsepian said.

Vista was five years in the making, so the code behind it is very complex, according to Hovsepian. Whereas open source is more nimble and flexible. "And we have got to take advantage of that."

Despite its commitment to attack the market on its own terms, Hovsepian admits there are benefits to its alliance with the software giant.

The reality is you can't escape the "Microsoft juggernaut" in the marketplace, so you have to work with them to get your foot in the door, according to Hovsepian. When you talk to customers, he said, most will say "I hate Microsoft". Yet those same customers say 60 percent of their servers run on Windows.

"The closer you get to the customer ... you increase the chance of migrating footprints to Linux." "We want to compete with Microsoft ... and then we'll work together once a customer decides which platform [to run] ... It ensures longevity for Novell in the marketplace," Hovsepian said.

However, he is confident that Novell occupies second place in what he calls a very young market. Linux is a US$500 million market, he said, and growing at the expense of Unix consolidation. "We have not taken enough from Microsoft."

One significant customer that Novell has taken from Microsoft, however, is Peugeot. Novell is replacing Windows with 20,000 Suse Linux desktops and 2,500 servers.

The Peugeot win was considerable, yet marketshare play still played a role in the decision to join hands with its long time bitter enemy despite Novell claims that it was purely customer driven.

"It was not a deal that Novell had to make," Hovsepian said. However, it was definitely made to create more market momentum. And it was a deal that seemed to resonate more with the customers, he added.

"We did not sign a patent cross-licence agreement with Microsoft. That has been one of the confusion points out there. What we agreed to was you will not sue our customers and we will not sue your customers for any of our products," Hovsepian said.

"That is what we agreed to -- a covenant not to sue our customers. That is where some of the confusion and rhetoric has been generated in the marketplace. So are we really clear? Microsoft can sue us and we can sue Microsoft tomorrow."

The threat of legal action, real or otherwise, had hindered take-up of Linux deals in the marketplace, according to Hovsepian.

He said that Novell had lost Linux deals with four Fortune 500 customers to Microsoft over concerns about intellectual property. Looking at the losses beforehand the deal with Microsoft "makes sense".

Done deal
And the pact with Microsoft has certainly made sense in the three months following the signing, according to Hovsepian. The software maker has honoured its contractual commitments by hiring sales staff and dedicating money to marketing. As well the companies are working on an interoperability lab together.

More importantly for Novell "big wins" have been starting to roll in, further justifying Novell's decision to enter into a coopetition agreement with their foe. Novell claims approximately 35,000 Suse Linux support certificates have been sold since the deal was signed.

Yet, Hovsepian remains wary. He marks the progress every day. "I have to because it's a big deal for Novell."

In the second part of this video interview, Hovsepian explains why the popularity of OpenOffice will be key to the financial success of Novell.

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