In Sydney for the company's leadership forum, CEO Ron Hovsepian and chief marketing officer John Dragoon both stood by Novell's decision to partner with Microsoft and said a lot of the initial reaction was misinformed.
"We did not sign a patent cross licensing agreement, what we agreed to was not to sue any customers over patents," Hovsepian said, adding there has been confusion and rhetoric over the intellectual property aspect of the contract.
The deal protects customers, but either company could still sue each other tomorrow, he said.
Many in the open source industry questioned why Novell would even think about entering into such an agreement, but Hovsepian remains adamant it is all about customers.
"Our strategy is to drive Linux in corporate environments, so the agreement was driven by customer conversations and because most customers were developing on Windows or J2EE and most shops would have both platforms," he said. "It was not a deal we had to make, but we needed to do something to get more market momentum and this seems to resonate more with customers."
"We focused on customer worries like interoperability, which is where we put the bulk of our focus [and] from a deliverables perspective we feel good about it. So far Microsoft has lived up to its half of the bargain."
On the touchy subject of the IP covenant between the two, Hovsepian is confident the "balance of payments on IP" resulted in a net payment to Novell, not the other way around.
"I was involved in four deals we lost to Windows in terms of IP overhang," he said. "These were Fortune 500 companies that didn't move forward with Linux. The big battle for us is to win battles against Microsoft, but at the end of the day there is a poor customer that needs to run a shop."
To that end, Novell believes it has absolved a key stumbling block for the adoption of Linux in the enterprise - customer "uncertainty" over IP violations.
As to why would Microsoft do this, Hovsepian believes the company needed to demonstrate goodwill in front of customers and show it is doing things to help customers.
However, almost immediately after the agreement was inked, Steve Ballmer came out firing suggestions that Linux users have an "undisclosed balance-sheet liability" for Microsoft's IP.
While not openly renouncing Ballmer's statement, Hovsepian said since that "flare-up" Microsoft has been supportive and has agreed to disagree with Novell over existing IP infringements in Linux.
Another immediate ramification of the deal was the resignation of Samba developer Jeremy Allison, who fled to Google in protest; however, Hovsepian remains confident in developer morale and said the company's turnover is low of "key people".
"It is literally single digit numbers and nothing significant. The team is very enthusiastic," he said. "Samba is one hot spot with the agreement [and] people thought we signed a cross licensing agreement which we do not. Hubert Mantel, one of the founders of SUSE, has returned to Novell, and when he came back he said he liked the Microsoft agreement. They are very much aware of it and we are listening to the development teams."
The highs and lows of that past few years aside, Hovsepian is bullish about Novell's potential in a market he describes as still in its "infancy".
"Linux is a $500 million market and not $8 billion as it will be in ten years from now," he said. "We have grown Linux at the expense of Unix consolidation and we have not taken enough from Microsoft."
"Look at a company like Peugeot - we are replacing Windows with 20,000 SUSE Linux desktops and 2500 servers," he said, adding market disillusion over Windows Vista will aid Novell's cause.
"We are going to attack Vista [and] we are excited about the strength of Linux compared to the competition. Look at Vista, it has been a five year development cycle. The beauty of the open source development process is the flexibility."
Hovsepian is also pleased with the ISV support for Novell's fledgling operating systems, and said IBM's Linux port of Lotus Notes helped win the Peugeot contract.
The company is also continuing to contribute code to open source communities, including the $17 million worth it spent on AppArmor. And by leveraging and contributing open source code, Hovsepian is keen to keep Novell's R&D budget to a fraction of what it would cost to engineer software from the bare metal up.
Regarding the financial terms of the agreement, Hovsepian said The US$240 million it received from Microsoft would have been a failure if no customers were won as a result.
"We are getting a lot of redemption of the certificates with new customers," he said. They have dedicated sales and marketing dollars to agreement, and we are building out the lab together."
While Novell's financial statements may not have been the best is recent times, Hovsepian is confident the company's US$1.2 billion net cash position and rise in Linux support contracts paint a rosy future.
The company's chief marketing officer, John Dragoon, backed Hovsepian on the idea of removing uncertainty over the suitability of Linux.
"It is not an admission of IP infringement for either operating system," he said. "When we were competing on deals IP concerns were part of the gaining factor to considering Linux in enterprise and we wanted to remove that barrier whether it was there or not. We were losing deals and Linux at large was losing deals."
Dragoon claims after the first 90 days of the agreement, some 35,000 SUSE Linux support certificates have been sold to enterprises.
"Some sections of open source community looked at this deal very negatively and some think we have violated that trust [but] the tone is becoming more balanced," he said, adding 94 percent of Novell employees now use Linux on their desktop, including himself and Hovsepian.
When asked about Microsoft's five-year release cycle from Windows XP to Vista, Hovsepian was coy as to whether that was too long, instead saying Novell will work towards an 18-month to two-year release cycle.