Novell sale shows its control by Microsoft

Microsoft still has something to hide from the open source community, and something to hold over its head.
Written by Dana Blankenhorn, Inactive

Glyn Moody's tweet said it best. "Attachmate got the carcass after Microsoft's mates ripped out the juicy stuff.

As our own Mary Jo Foley writes, the sale of Novell to Attachmate for a reported price of $2.2 billion is Microsoft's doing.

A sizable hunk of that, $450 million, is coming from a consortium Microsoft itself organized called CPTN Holdings LLC, which doesn't even have a Web site.

Novell has been trying to engineer a deal to sell itself for some time. I wrote about it in September. While in Germany I heard rumors that VMWare would be the buyer.

Attachmate is built around legacy systems, not tomorrow's anything. But it is backed by experienced investment bankers. It's also based in Seattle. Its press release indicates it will run SUSE and Novell separately, meaning Novell is out of the Linux business.

What appears to have happened is that Novell put itself up for auction, its investment bankers demanded a price in excess of what the market priced it at, and Microsoft had to make something happen in order to protect its own interest in Novell's copyright of Unix and its claimed patent rights, which Novell acknowledged in a five-year deal back in 2006.

It's the specifics of that deal, and the copyrights, that Microsoft had to keep out of rivals' hands. Having that deal, and those copyrights, in the hands of a rival like VMWare could have been disastrous.

Placing them in CPTN accomplishes just part of the goal. Having the rest in friendly hands, a privately-held firm based close to Redmond, and at a price that takes out Novell's investment bankers at a profit, took time to arrange.

What does this mean for Linux? Nothing changes. Microsoft still claims to control it. The details remain hidden from view. Which means Microsoft still has something to hide from the open source community, and something to hold over its head.

UPDATE: Larry Dignan asks more burning questions at Behind the Lines.

UPDATE: CNET's Stephen Shankland has now seen the regulatory filing and says 882 patents are going to CPTN Holdings for the $450 million in this deal.

Speculation: It's very possible Microsoft had an option to arrange the sale of the company under the 2006 agreement, subject to conditions like beating any other offer.

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