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Friday, November 17, 2006
Microsoft says it's willing, but Red Hat rejects alliance
Offer follows deal to make Linux, Windows compatible
Microsoft Corp., which has agreed with Novell Inc. to make Linux and Windows compatible, opened the door Thursday to a similar alliance with Red Hat Inc.
"We are willing to do the same deal with Red Hat Linux and other Linux distributors," Microsoft Chief Executive Steve Ballmer said at an SQL database software conference in Seattle.
Microsoft and Novell agreed two weeks ago to enable their software to co-exist on a single server computer in response to demands from customers who are increasingly using both. The agreement, which dulled a longstanding rivalry between Microsoft and Linux, also came as Oracle Corp. boosted its Linux efforts, threatening both Microsoft and Novell.
Ballmer, responding to an audience member's suggestion that the deal might reflect Microsoft "selling out," said it was necessary to keep customers happy. To illustrate his point, he polled the audience of several hundred customers of SQL Server, Microsoft's database software.
"How many people have Windows Server in their data center?" Ballmer asked. Windows is required to run SQL, so the entire audience raised their hands.
"How many have Linux?" he asked. Almost all raised their hands again. "Oops, not what I would have hoped, but OK.
"How many of you have wondered about the interoperability of the two?" he asked. Again, almost everyone in the room raised their hands.
As part of the accord, Microsoft will pay Novell $442 million. Novell will pay at least $40 million to Microsoft over the next five years as part of a patent-cooperation agreement.
Red Hat shot down the possibility of an alliance because the company "does not believe there is a need for or basis for the type of relationship defined in the Microsoft-Novell announcement," deputy general counsel Mark Webbink said in an e-mailed. He said Red Hat would work with Microsoft on "true interoperability and open standards."
Rick Sherlund, a Goldman, Sachs & Co. analyst, called the chances of an accord between Red Hat and Microsoft "unlikely." Sherlund, writing in a note to investors, said Microsoft's relationship with Novell differs from its dealings with Red Hat because it has a history of litigation with Novell, which also has an extensive patent portfolio available for licensing.
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