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Why Novell Might Need 'Plan B' For Linux Distribution

Novell says its alliance with Microsoft is a key part of its Linux sales strategy. It may need to rethink that. On Thursday, the Free Software Foundation took aim at the partnership with a deal-busting final draft of the new open source license.

In the final draft of the General Public License, v3, the FSF makes clear what was implied in previous drafts--Linux distributors can't sue Linux users.

"If you arrange to provide patent protection to some of the people who get the software from you, that protection is automatically extended to everyone who receives the software, no matter how they get it."

That's how the FSF describes the impact of the new rules.

Microsoft claims to own 235 patents that are infringed by open source software, including Linux. In November, it cut a deal with Novell under which it agreed not to sue Novell's Linux customers. In exchange, Microsoft gained the right to resell Novell's SUSE products and services at a markup.

So much for that.

If GPLv3 stands in its current form, it would appear to leave Microsoft with two choices. It can give up its patent claims on Linux and continue its partnership with Novell. Or it can terminate the pact. Given the way Microsoft jealously protects what it says is its intellectual property, I'm betting on the latter.

That's bad news for Novell.

It posted a $20 million loss in its first quarter and needs to boost revenues. The Microsoft partnership had been doing just that for the company. Novell said that it's already booked $7.6 million in sales as a result of the alliance and has recorded $338 million in deferred revenue.

What's deferred revenue?

It's money that Novell has already collected for services not yet provided. If its partnership with Microsoft goes poof and it's unable to provide the services--well, you get the picture.

Novell isn't saying what it intends to do if Microsoft bolts in order to protect its patent claims. But I'm thinking some kind of Plan B might be in order.

Here's a thought: To increase Linux sales, maybe Novell next time around should choose a partner that isn't making veiled legal threats against Linux users.

Call me crazy.

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