Sonia Arrison

Novell and MS–the market brings a new beginning

I almost choked on my morning coffee when I saw the headline last week that Novell and Microsoft announced a deal to make their software work together. As someone who once employed VMware to use Word on a machine running Linux OS, I have to say that I was both surprised and thrilled. And, as someone who closely followed the Microsoft antitrust cases in both the US and Europe, I was astounded. I wish I could call Judge Jackson right now and ask him why he thinks these two competitors who once looked to be arch enemies are now joining forces (Novell accused MS of antitrust violations and sued over WordPerfect). But of course Jackson didn’t think Microsoft had any competitors, so perhaps he wouldn’t really understand the question.

The fact that Microsoft and Novell are now teaming up to provide consumers with something they have been clamoring for (interoperability) is proof that the marketplace can deliver benefits to consumers without government help even if the two competitors have a bad history.

November 9, 2006 | Comments |

Viewing 6 Comments

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    It isn't competition if you have to grovel at the other guy's feet to have permission to participate in their market. Most of the time we call that having a lapdog, not a competitor.
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    Receiving a $308 million payment isn't what most people consider groveling.
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    I am totally amazed at how many people were surprised at this. I had fully expected MS would try to pay off some of the big open source companies, and hence my stock picks for this year included Novell:


    Predictions for the Year 2007, Part I


    Stock Picks

    18. Stock picks: Steris (40%), Johnson & Johnson (40%), Novell (20%)

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    Microsoft's payment to Novell represents about one day's worth of profits for MS; Novell's payment to MS was more than Novell has made in profit in the past year. This isn't competition.
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    Luis, are you implying that big and small firms can never collaborate, or that its somehow MSFT's fault the financial limitations of FOSS business models.

    Sonia's reference to Judge Jackson is interesting. Jackson (when he was awake) didn't think MSFT had viable competitors. In fact, Novell probably isn't a viable competitor to MSFT; but the general FOSS OS market is. To say that MSFT needs to partner with a competitor rather than a "lapdog" as Luis states it, would have MSFT partnering with the entire FOSS industrial segment or not work with FOSS at all. Obviously, MSFT is more practical, and sought to work with Novell.
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    In fact, Novell probably isn't a viable competitor to MSFT; but the general FOSS OS market is.

    Well, Noel you have passed anbother milestone!

    I think of this deal much in the same way I think of Microsoft's competing for influence in donating to both Republicans and Democrats: they want a voice in that community.

    They are somewhat surprised (As I was) at the volume and consistency of the criticism of Microsoft. I did not expect the FOSS community to hold together as well as it has.

    Looking more closely at the deal, and the recent annoucement by Sun to release Java under the GPL, I can see that the competetion to have a voice in the developer community is warming up.

    Remeber what Schumpeter said about the complexity of competition, and not to be too focused on cost competition alone.

    I think the for-profit enterprise is competeing for the respect of a community.

    Yes, it's a good thing.

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