Ballmer: Novell deal proves open source needs to ‘respect IP rights’

by Mary Jo Foley

The same week that Microsoft issued a press release providing further details about some of the technological advances that will result from the November 2006 technology agreement between Novell and Microsoft, Microsoft CEO Steve Ballmer told Wall Street what he really thinks the deal means to Microsoft.

During a forecast update meeting for financial analysts and shareholders on February 15, Ballmer reiterated that, to him, the deal is more about Microsoft exerting intellectual property (IP) pressure on Novell than anything else.

Ballmer didn't talk up technological cross-collaboration. He didn't mention helping customers with interoperability challenges. He didn't mention new sales opportunities. Instead, he said:

"The deal that we announced at the end of last year with Novell I consider to be very important. It demonstrated clearly the value of intellectual property even in the Open Source world. I would not anticipate that we make a huge additional revenue stream from our Novell deal, but I do think it clearly establishes that Open Source is not free and Open Source will have to respect intellectual property rights of others just as any other competitor will."

Ballmer has riled the Novell management team more than once by hinting that Microsoft believes that Novell and other open-source vendors are violating Microsoft patents.

(This past weekend, in an interview with LinuxWorld, former Novell employee and lead Samba developer Jeremy Allison, when asked about supposed Microsoft threats over alleged open-source patent violations, said the rumors were true.

"I have had people come up to me and essentially off the record admit that they had been threatened by Microsoft and had got patent cross license and had essentially taken out a license for Microsoft patents on the free software that they were using, which they then cannot redistribute. I think that would be the restriction. I would have to look quite carefully. So, essentially that’s not allowed. But they’re not telling anyone about it. They’re completely doing it off the record," Allison said.)

Until customers come forward and admit these Microsoft threats, it's gong to be tough to prove Allison's contention.

But it isn't difficult to see that Microsoft's brass sees the Microsoft-Novell deal as being, above all else, about setting a precedent by getting an open-source vendor to pay royalties for IP.