Novell Reassures Linux Users On Microsoft Patents

Description

_______________________________________________________________________________________

Linux vendor Novell saysLinuxdoesn't violate Microsoft patents, even though Novell recently signed an agreement with Microsoft protecting Novell SuSE users against patent lawsuits from Microsoft.

Novell disagrees with an open letter from Microsoft implying Linux infringes on Microsoft intellectual property, said Novell Chief Executive Ron Hovsepian in anopen letter to the open source community.

But Microsoft shot backthat the two companies "agreed to disagree" on whether someopen sourceprojects infringe on Microsoft patents. Both Microsoft and Novell are committed to their agreement to advance the interoperability of Windows and Linux, Microsoft said.

The two companiesmade a dealthis month that included patent protections, support cooperation and co-development of technology for Windows-Linux interoperability. As part of the agreement, Microsoft promised not to sue Novell for patent infringement stemming from code currently in Novell's SusE Linux, or future technology co-developed by the companies. At the same time, Microsoft got the same patent protections from Novell.

The implication that Microsoft code could be in Linux set off a frenzy within the open-source community, with developers demanding that Microsoft show the infringing code. Chief Executive Steve Ballmer fanned the flames furtherlast week, when he said, "Anybody who's got Linux in theirdata centertoday sort of has an undisclosed balance sheet liability." The remarks were made to the Professional Association forSQLServer, in a discussion posted on theSeattle Post-Intelligencer's site.

Hovsepian distanced Novell from Microsoft and Ballmer, saying, "We disagree with the recent statements made by Microsoft on the topic of Linux and patents," he said in his letter.

"Importantly, our agreement with Microsoft is in no way an acknowledgment that Linux infringes upon any Microsoft intellectual property," he said. "When we entered the patent cooperation agreement with Microsoft, Novell did not agree or admit that Linux or any other Novell offering violate Microsoft patents."

Indeed, the Microsoft-Novell deal indicated Microsoft had more to gain than Novell. Microsoft made an upfront payment of $108 million for patent protections, while Novell agreed to pay at least $40 million over five years. Microsoft said in its statement, "Microsoft and Novell have agreed to disagree on whether certain open source offerings infringe Microsoft patents and whether certain Microsoft offerings infringe Novell patents."

"The agreement between our two companies puts in place a workable solution for customers for these issues, without requiring an agreement between our two companies on infringement," the software maker said.

The company went on to say that Novell did not admit or acknowledge any patent problems in entering the agreement, but that Microsoft determined on its own that patent protection should be extended to customers of the products covered in the agreement.

"At Microsoft we undertook our own analysis of our patent portfolio and concluded that it was necessary and important to create a patent covenant for customers of these products," the company said.

Hovsepian said a key motivation for the Microsoft deal was to satisfy customers calling for interoperability between Linux and Windows, an argument made during the initial announcement on Nov. 2.

"Our interest in signing this agreement was to secure interoperability and joint sales agreements, but Microsoft asked that we cooperate on patents as well, and so a patent cooperation agreement was included as a part of the deal," Hovsepian said.

In closing, the chief executive said Novell remained committed to "protecting, preserving and promoting freedom for free and open source software," and welcomed the development community'sinputin how to meet those goals.

Bowing Out and Letting Go

Description

_______________________________________________________________________________________

Scott G. McNealy, who last week gave up his title as chief executive of Sun Microsystems Inc., says he feels as if a buzz saw has suddenly been removed from his forehead.

"I've been having this CEO grindstone grinder gnawing at my forehead for 22 straight years now," he said, mimicking the sounds of a chain saw as he placed his hand between his eyes, as if it were a blade slicing into his brain.

"It's strangely quiet," he said with a laugh.

In renouncing his role as chief executive but keeping the title of chairman, McNealy, 51, is trying to do something many executives -- let alone company founders -- find hard even as they approach retirement age: giving up day-to-day control of a major corporation.

He said he isn't worried about the leadership of Sun Microsystems, the company he co-founded in 1982. His successor is Jonathan Schwartz, 40, a 1983 graduate of Bethesda-Chevy Chase High School and founder of Lighthouse Design, a software company founded in Chevy Chase and later acquired by Sun Microsystems.

He said Schwartz, who has been president and chief operating officer of Sun since 2004, is the right man for the job. But that doesn't mean McNealy hasn't had second thoughts about his own new role.

"I am going through the porpoise thing of every four hours I go from absolute euphoria to total depression and 'What the heck have I done?' back to euphoria again," he said.

One of the things Schwartz will have to do -- at least in Wall Street's eyes -- is find a way to restore Sun Microsystems to profitability. The company has not reported an annual profit since 2002, and its stock has languished in the single digits for most of that period.

McNealy appeared to bristle at Wall Street's view that the company must cut costs more aggressively, twitting analysts for having been so bullish on Sun Microsystems before the Internet bubble burst and saying it had slashed its workforce since then.

"In our business, you innovate or you die," McNealy said. "And you don't innovate via analyst reports."

As much as Wall Street wonders about Sun Microsystems' business strategy, it also questions whether McNealy can give way to Schwartz.

"Can he let go? We won't know until we see Scott in his new role for a while," said Toni Sacconaghi, a securities analyst at Sanford C. Bernstein & Co. "Clearly, it's going to be hard to let go because he really is the patriarch of the family."

With characteristic trenchancy, McNealy arrived in Washington to chime in on the issues that are affecting Sun, the technology industry and Silicon Valley innovation.

He called the requirement that companies treat stock options as an expense "a brain-dead policy," suggesting that it raised companies' costs and limited their ability to motivate workers. He made a pitch for governments to embrace the OpenDocument format -- an open file-saving format that seeks to ensure that documents remain accessible and are not locked into any particular proprietary technology. And he repeated his appeal for the U.S. government to grant more visas to highly skilled workers.

"These folks come from all over the world to come here and to create some of the greatest companies," he said. "I mean, what are we thinking?"

McNealy suggested that U.S. immigration policy makes it harder for the next Sergey Brin, who co-founded Google Inc., to come to America.

"Do we really want Sergey from Russia coming here and starting Google? Wouldn't it be better if that were started in Russia," he said with heavy sarcasm.

He also voiced sympathy for both sides of the Washington debate on "net neutrality" protections but appeared to lean toward the views of the cable and telephone companies who oppose them.

Advocates of network neutrality say they want to make sure the cable and telephone companies that provide Internet connectivity to consumers and businesses do not discriminate against content providers by blocking, slowing or degrading their Internet traffic.

Phone and cable companies say they will not block traffic but insist they should be free to charge content providers more for fast, high-quality delivery.

McNealy said he thought a reasonable compromise could be worked out, and he likened the issue to the role of patents in the pharmaceuticals industry, saying, "If there were no patents on drugs, then nobody would spend the $5 billion it takes to bring a drug to market.

"The same is probably true on network investments," he said. "We probably want those who are making the big multibillion-dollar network investments to have a way to monetize their investments. If they don't, who is going to build the networks?"

As for the transition of the chief executive title to Schwartz, McNealy said he was confident he would be able to cede control and would be happy to stop chairing staff meetings after two decades.

"The tough litmus test will be when Jonathan makes one of those big decisions that is a strategy-altering or a destiny-altering decision," he said. "It might be emotionally a little difficult, but I don't think it will be that hard for me to let him make that decision."

Asked if he saw any danger that he would be tempted back into the chief executives seat, McNealy said he would rather go down in history like Reginald H. Jones, the former General Electric Co. chief executive who is remembered, if at all, for having picked Jack Welch as his successor.