Microsoft Closes Third Linux Deal: Is Red Hat Next?

Microsoft (MSFT) inked its third Linux interoperability deal as the third version of General Public License nears the finish line. Will Red Hat (RHT) fall in line soon?

Microsoft Wednesday announced an interoperability deal with Linspire and the pact reads roughly like the one it has with Xandros. As we all know Microsoft is tied up with Novell (NOVL) in a pact that has been advantageous to both companies.

In fact, Microsoft’s Novell deal (not to mention GPLv3) is spurring many of these deals. Windows and Linux will play nice in the enterprise and open source providers are wary of being locked out as Novell and Red Hat run off with the market.

Under its Microsoft pact, Linspire will be involved with document sharing formats. Linspire will also license technology to make its digital media and instant messaging apps compatible with Microsoft’s. Linspire also makes Live Search its default search engine.

And the big deal for Linspire is patent protection. In a statement Microsoft said:

Through the agreement, Microsoft and Linspire have developed a framework to provide patent covenants for Linspire customers. The patent covenants provide customers with confidence that the Linspire technologies they use come with rights to relevant Microsoft patents.

Now there are two ways to read these Microsoft-Linux pacts. Duncan Riley at TechCrunch writes that Microsoft is creating an anybody-but-Red-Hat club to outflank the Linux bellwether.

If that’s Microsoft’s strategy against Red Hat it doesn’t seem to be working. The consensus seems to be that Microsoft isn’t denting Red Hat at all by inking pacts with lesser Linux providers. In a research note dated June 7, Jeffries analyst Katherine Egbert reports that Red Hat likely landed JP Morgan in the May quarter. Meanwhile, Novell customer wins at Wal-Mart (WMT), Home Depot (HD) and Bear Stearns (BSC) were largely because Red Hat held the line on pricing, says Egbert.

An alternate theory–and one detailed in Egbert’s note–is that Red Hat could do a deal with Microsoft. Egbert writes:

Several industry sources have indicated that Red Hat has opened talks with Microsoft re: patents. These talks are especially relevant in light of the recent, final release of GPLv3, which extends any two-party patent protection to all users of v3 licensed software (there is a grandfather clause that excludes the Novell-Microsoft agreement). Microsoft recently signed patent cross-license agreements with OSS provider Zimbra and with LG Electronics. While there has been only minor progress to date with Red Hat, we find the talks encouraging.

A Red Hat pact would be quite a coup for Microsoft and in theory could shelve future interoperability concerns for customers looking to mix and match Linux and Windows. The one major hang-up in talks will be virtualization technology. Don’t hold your breath for a Microsoft-Red Hat partnership, but if it’s going to happen it’ll happen real soon.

Comments

[hotta fire]

Red Hat is a service company. All the pacts are between software companies. RHT is a different beast and is not easily comparable to any other software company.

Next observation: By entering into a pact that gives Linspire permission to use MSFT patents, isn't that coming close to an admission of infringement? I know it isn't exactly admitting anything but if patents are disputed once this pact ends I can't see how Linspire's case has been helped.

After all, Linspire has essentially admitted that the use of Microsoft's patents has a value.

[Tom B]

It's like a Tony Soprano "protection racket".

The thing is, after 25 plus years, you'd think people would understand how dangerous bargaining with MSFT is.

In this case? Maybe not so much. MSFT, after all, has little IP to speak of, really.