(continued from previous page)
Do you think this agreement would have been possible under the previous Novell leadership, when Ray Noorda was running the company? Hovsepian: I didn't know Ray, but I've heard wonderful things about the man and some of his innovations. I think the Novell team has a very long heritage and heterogeneous environment. We have our proprietary business, and we have our Linux business. Now, we love to compete with this guy (pointing to Ballmer). We hope to beat him up on a regular basis. But the reality is that he is in that marketplace. And we're in it. And we're trying to bridge that for the customer.
Ballmer: When we lose, we want to make sure we're losing to someone that respects our intellectual property. We hope through this agreement that Suse Linux--let's call it a version of Linux that respects our intellectual property and respects the GPL--grows its share of the total Linux platform. And since it's a nonexclusive deal, it could happen with other people. But Ron had the foresight to move. We move quickly...there are first-mover advantages that come along with that.
Do you see this as the "first of many" kind of deal?
Ballmer: I see this is a deal we could get done, and we got it done--and I'm excited to get it done and to go to market hard with it. We're quite clear about the fact, though, that there's nothing in this covenant not to sue that is exclusively offered to Novell.
It also puts a final coda on a decade of disputes between the companies. Does it say anything about your maturation as a businessman? I don't know if it's right to say you're a kinder, gentler Steve Ballmer than you were 10 or 15 years ago...
Ballmer: There is a difference between high rhetoric and high competition. In a sense, most industries have high competition, most industries do not have high rhetoric. Our industry has been marked by high rhetoric and high competition. At this stage, at least on the commercial side, our customers aren't all that interested in that rhetoric. They love the competition, actually, because it brings better value, better technology and everything else.
Take what we did with (Sun Microsystems and its former CEO, Scott McNealy). People didn't want the rhetoric anymore. They wanted the competition, but they wanted something else. They say, "Look, we're going to use both Windows and Linux, so get rid of the rhetoric. Compete hard, and as you compete hard, solve the issues that we face in terms of our ownership of both."
I think if you look at us over the last five, six or seven years, you would say that by and large we've been lowering the rhetoric. I don't think we've been lowering the competition. We continue to do very well, and we're selling our stuff hard. But while the level of competitiveness hasn't gone down, the level of rhetoric has dropped.
We've all grown up in this industry as a bunch of young folks in a young industry. Maybe it's sort of a higher-rhetoric part of life.
Then there was a kind of an almost a religious fervor around the open-source stuff. But you don't see that kind of rhetoric from Bank of America or JP Morgan or Citibank. They go after each other pretty hard, but you just don't get the same thing when it comes to the rhetoric.
What's your timetable on when customers can expect to see something in the field, in terms of real product? Hovsepian: On the technical side, we want that as fast as possible. I'm going with my kickoff meetings this week with my field team, so I'm going to explain to them what we just talked about.
I think what's exciting right now for the customers is the covenant not to sue. That's immediate and part of our agreement with Microsoft that takes care of all Suse customers.
I was talking with the CTO of the City of Seattle. He said the covenant not to sue is great, because it makes Suse Linux more attractive to him, and maybe he'd even swap out some Windows boxes to install Suse. That's probably not that you want to hear, Steve, but...
Ballmer: He speaks for himself. I get to vote for his boss. That's all I'm saying (laughing).
Hovsepian: Yeah, I don't see the City of Seattle pulling out Windows servers, to be blunt. On the flip side, I think what it does is open up the competition that Steve highlighted. The competition is very real, so I do anticipate those conversations.
Most people have an app up and running, they're not going to rip it out or replace with another OS. Those are pretty weighted in there. What we're fighting over is the new applications in general. That's where you're trying to get people over to your environment. Would I love to get his development environments onto my platform? Yeah, but I don't think he's going to give that to me any time soon. Those are the kind of the things--it's really getting those developers. That's where the game begins and ends.