Novell Offers Linux Users Legal Indemnity

Anonymous Coward writes "Novell today said it intends to indemnify its enterprise Linux users against possible legal action by The SCO Group and/or others. According to eWeek Novell's new Linux Indemnification Program is designed to provide its SUSE Enterprise Linux customers with protection against intellectual-property challenges to Linux and to help reduce the barriers to Linux adoption in the enterprise. Under the terms of the program, Novell will offer indemnification for copyright infringement claims made by third parties against registered Novell customers who obtain SUSE Enterprise Linux 8 after January 13, 2004, upgrade protection and a qualifying technical support contract from Novell or a Novell channel partner."

Comments

it looks like they're only looking for sales

[dogas]

so it starts January 13th? otherwise you have to buy an 'upgrade package'?

they're just trying to make a sale. It would be better if they offered this protection to all of their customers, rather than forcing companies to buy an 'upgrade', that will most likely prove worthless anyhow,

Re:Okay, but...

[HotNeedleOfInquiry]

The indemnification issue is not about indemnification itself. It's a smart, tactical play to encourage corporate Linux users not to cave and buy "licenses" from SCO.

This move deprives SCO of its *only* positive cashflow.

Re:Novell wins either way

[Anonymous Coward]

The payments to Novell are from licensees at the time of the transfer agreement. SCO gets 100% of new license revenue, which would include licensing of Linux.

Are you people happy with nothing?

[soren42]

Why is everyone attacking Novell for this? Why are you all claiming they are in bed with SCO for offering enterprise customers what we have been asking for?

I can only speak for my large enterprise (Fortune 50, 70,000+ employees, billons of US$ in revenue, etc.), but our biggest obstacle to buying Linux was our legal department, demanding "I can get indemnity from everyone else, why can't someone offer me indemntiy for Linux?"

Large organizations (particularly ones that have large sums of other people's money to protect) only have one issue here - it's not open source politics, it's not SCO's pump and dump, and it's not who's right or wrong - it's risk mitigation. It's a question of how much money are we going to lose if SCO is right, and who is going to protect us from this?

I, for one, am glad to see Novell offering the opportunity for real Linux indemnity - goodness knows, I've asked everyone in the industry for it.

Re:Are you people happy with nothing?

[stewball]

I wish I had some mod points to give you, but hopefully someone will take care of that.

I've seen the inside of a fair number of discussions on whether and to what extent to provide indemnification in contract, and the calculus is pretty damn simple.

1) How much are we making on this deal/this product?

2) How big would the exposure be (including legal fees, etc.) if we provided x kind of indemnity? (There are a LOT of different ways to structure indemnification provisions, and I don't know what Novell has in mind.)

3) What is the likelihood that we'll have to pay out?

If revenue is less than risk magnitude multiplied by exposure estimate, you don't indemnify unless you're willing to play craps with the future of your company. Period. Punto. End of story.

Now, Novell is saying it will indemnify people on a PROSPECTIVE BASIS if those people contribute to Novell's revenue stream. This is a pretty reasonable bargain. I don't think there's a CFO or institutional investor alive who would agree to let their company go BACK to the customer base and add risk to the company's profile when all of the pricing to those customers was calculated using a lower risk profile.

In other words, there's no such thing as a free lunch.
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Re:ARGGHHH...

[AJWM]

Novell has absolutely ZERO need for an insurance company to handle the claims.

SCO sues some Linux user over alleged SCO Unix IP? Novell exercises its right to waive SCO's action, as per the purchase agreement that bought whatever feeble Unix rights SCO has from Novell in the first place.

Novell also has the right to license Unix to its own customers, again voiding any attempted SCO suit.