Will VMware acquire SUSE to build a clone of Microsoft Azure?

Rumors have intensified since our post back in June suggesting VMware might acquire SUSE Linux from Novell as part of a “fire sale” of Novell’s assets. Much of the rationale we articulated has been repeated in posts on other sites.

  • VMware would get, a widely-adopted operating system with great application and tool support.
  • VMware would have a long-term strategy to compete with Microsoft at the Operating System level in case Hyper-V became the dominant hypervisor under Windows.
  • VMware would have the last major layer in its SpringSource platform, now re-named vFabric

However, nobody has picked up on another point we made:

If VMware buys Novell, it can create an entire clone of Microsoft Azure without a single piece of Microsoft software in the stack.

How does this work?

We already know that the vFabric platform contains a web server and a distributed database, and is built on a hypervisor, has messaging and some management tools and of course with the addition of SUSE it has an operating system.  The only thing that is missing is the ability to run .NET applications.  For this you need a C# compiler, a virtual machine for the Common Language Infrastructure (analogous to a Java Virtual Machine), a set of core libraries, and a set of Microsoft Compatibility Libraries.  All of these are available as part of Mono, which is an open source project owned and run by Novell.

Why doesn’t everyone do this?

Given Mono is open source, it would seem that there is no barrier to making .NET clouds  widely available, except for the fact that for any vendor other than Novell, the Microsoft Compatibility Libraries are “too hot to touch”. They are alleged to blatantly infringe Microsoft patents. However, Novell is special.  In November 2006, Novell did a 5-year cross-licensing deal over SUSE Linux which exempted it (and any of its customers) from any patent infringement claims over Mono. In other words, only Novell is in a safe position to sell a clone of Azure, and if you are a potential customer of such a service it is only safe to buy it from Novell.

Does Microsoft actually want an Azure clone?

Back in 2006, when the deal with Novell was signed, Microsoft was acting defensively to position against Red Hat and to ensure it wasn’t open to anti-trust claims (particularly around Office which was covered by the same deal).  Now it is in a different position and arguably a Mono-derived Azure clone is in its best business interests.  The reason for this is “second-sourcing”.  If you are a large corporate procurement organization making a strategic purchase you will often insist that the supplier demonstrate a “second source”.  In other words they must provide evidence that there is a credible supplier to which you could turn if they failed to deliver, and also that there is genuine price competition in the marketplace. Think Dell vs. IBM vs. HP in the server market.  The products aren’t identical, but are comparable (at least as far as Procurement is concerned).  Indeed the continued existence of SUSE in the face of competition from Red Hat is a result of IBM’s insistence on a credible second source for Linux in its enterprise customer base.

Now, as people stop procuring operating systems and start procuring clouds (public or private) the question of second-sourcing of Azure comes up. If you want a JEE-based cloud, there will be competition from a number of credible players.  If you want a .NET-based cloud, without Mono it will always contain a large amount of Microsoft software.  The lack of a credible second source will be a barrier to Procurement.  If VMware can take Mono into it’s SpringSource organization and become that credible second source and take a small share of the .NET cloud market, Microsoft may actually gain in its share of overall cloud adoption because .NET will be a more acceptable cloud platform.

What do we expect to happen?

It all starts with someone buying  SUSE out of Novell (in principle this could be Oracle rather than VMware, and most what we say would also apply, but all the smart money is on VMware).  The next prerequisite is the extension of the 5-year cross-licensing of patents that is due to expire at the end of 2011. If the acquirer of SUSE is able to negotiate an extension to the deal with Microsoft that continues to cover Mono, it will be a signal that Microsoft is looking to second-source Azure.  Once that deal is in place, preferably in perpetuity – or at least for another 10 years, we are likely to see VMware announce its clone of Azure.

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