Huh?

I know...when you heard word about a 2pm "Industry" announcement by Ballmer, you secretly hoped Steve was stepping down, MSFT was going to finally buy YHOO or SAP, they were splitting into three separate companies with individual tracking stocks, or maybe just going to formally announce Vista ship dates - right? Nope, on all counts.

In case you missed it, MSFT announced a joint relationship with Novell. Honest! Here's some coverage:

• Microsoft, Novell entering into partnership over Linux: WSJ
• Microsoft backs Novell's Linux platform
• Strange bedfellows: Microsoft, Novell ink pact
• Microsoft and Novell: Fox marries chicken, both move into henhouse

Listening to the webcast, I'm not 100% sure that I understand this deal. Apparently, Novell initiated the discussions based on issues they were seeing within their customer base. Meanwhile, MSFT was seeing similar issues, so the timing was fortuitous. Six months later, we get today's announcement. Now, I understand the customer need for better interop between Linux and Windows. And, as a stretch, can understand the need for cross-company patent litigation protection agreements in support of that. But why is MSFT supposedly buying 70,000 coupons from NOVL for a one-year SUSE subscription, which they will then distribute to customers? And was that total, or did I hear the NOVL guy say it was annually? Does that explain why the flow of money is apparently heavily skewed from MSFT to NOVL, or is there something else?

One attendee, clearly also having a hard time following the announcement and sensing a conspiracy instead, asked whether the current WordPerfect litigation issues between NOVL and MSFT just happened <wink> to get resolved as part of this? Answer: no. In the meantime, Infoworld figures they know the reasons:

• Three reasons why Microsoft will put Linux on their desktop

I love those "neutral" perspectives that give three choices, all of them unpleasant. I'm not sure we could call Linux's current miniscule desktop marketshare a "bleeding of Windows to Linux", and therefore write this off as MSFT's effort to staunch it. But of the three, that's the most plausible. Their "Desktop OEMs pushed it" argument, strikes me as strained, and their "Apple fear" one is just laughable.

Still, why this deal, why now, why Ballmer in person to announce it, and why is MSFT distributing SUSE coupons as part of it and paying NOVL cash? Certainly, it seems to have a lot to do with server consolidation and virtualization, and the impact that's expected to have on the technology landscape (hence MSFT's major efforts over the past year or more to try and catch up to EMC's leading VMware). But whether this is a sign of weakness on MSFT's part vis a vis Linux, strength (that on a level playing field customers will choose to host SUSE under Windows vs the reverse), some Machiavellian response to ORCL's recent decision to offer a relabeled Rhat Linux, or simply the customer-focused necessity that NOVL/MSFT suggest it is, is TBD.

Between the recent ORCL/Rhat news, and now this MSFT/NOVL SUSE news, the technology landscape just got a lot more confused. Meanwhile, Linux supporters are currently having a field day in the media with this development, painting it as capitulation on MSFT's part to the inevitability of an Open Source world. For its part, the market (both in the session and AH) gave this a collective yawn for MSFT, although NOVL was up big time as word somehow leaked out ahead of the announcement...

Update: Microsoft Monitor's Joe Wilcox shares his thoughts on the deal:

• The Microsoft and Novell Partnership

Update #2: Forbes wades in with their particularly harsh take:

• Novell: We Surrender