In a move to ease customer concerns about possible legal action from The SCO Group, software vendor Novell will begin indemnifying customers of SuSE Linux AG, the Linux distribution vendor that Novell announced plans to acquire in November.
The indemnification program will go into effect on Tuesday, the same day that Novell is expected to complete its US$210 million acquisition of the German software company, Novell spokesman Bruce Lowry confirmed on Monday.
The program will be available free of charge to customers who purchase SuSE Linux Enterprise 8, along with Novell's "upgrade protection" software maintenance plan and a support contract, from either Novell or a qualified Novell channel partner, said Lowry.
Customers will be protected for up to 1.25 times the cost of their support contract and licensing fees with Novell, or $1.5 million, "whichever figure is lower," Lowry said.
Novell Australia MD David Lenz said he sees increasing Linux activity in the Australian marketplace and is "excited" by the levels of interest expressed by existing customers and new customers "wanting to explore this alternative".
"Novell's indemnity program means that Australian organisations, schools and government agencies can choose Linux with confidence," Lenz said.
"We are in a very strong position at the moment in regard to the unique rights to UNIX. We have used this position to further support the open source movement in Australia," he added.
The indemnification of Linux and open source customers has become a hot topic since SCO launched a $3 billion lawsuit against IBM Corp. last March. SCO claims that IBM has illegally contributed SCO's intellectual property to Linux and has threatened to sue Linux users over the matter.
SCO's Chief Executive Officer Darl McBride has said that Novell's acquisition of SuSE will put the Netware vendor in violation of a non-compete agreement between SCO and Novell, and that his company will consider legal action against Novell once the SuSE acquisition is complete.
Novell disputes SCO's non-compete claim. By offering indemnification to its Linux customers it is taking steps to reassure them that they will not be affected by SCO's lawyers.
In September, Hewlett-Packard Co. announced that it would begin indemnifying its own Linux customers to protect them from the possibility of legal action from SCO.
The SuSE indemnification program will be broader in scope than HP's, said Lowry. "HP is indemnifying for (Linux) on an HP box. We're indemnifying for SuSE Linux," he said. Unlike HP's plan, Novell's indemnification would cover SuSE Linux Enterprise on any type of hardware, and would protect customers from legal action by any company, not just SCO, he said.
The indemnification will not cover other SuSE products such as SuSE Linux 9 or SuSE Linux Desktop, Lowry said. Also, it does not cover the open source Red Carpet Enterprise software produced by Ximian Inc., an open source company Novell acquired last August.
It is unclear whether HP's indemnification program has actually helped the company's Linux sales, said Bill Claybrook, vice president of Linux strategy with industry research firm Harvard Research Group Inc. But indemnification of any software -- proprietary or open source -- is good business, Claybrook said.
"Anybody that sells code should indemnify their customers," he said. "If they're selling software products ... then they should stand behind their products. I don't care if they're proprietary or open source."
Linux vendors such as IBM and Red Hat Inc. -- both of whom are currently engaged in lawsuits with SCO -- should also indemnify their customers, Claybrook said.
Red Hat has no plans to indemnify its customers, according to spokeswoman Leigh Day, who said customers continue to buy Red Hat's software without it.
"We've had great relationships with our customers. They feel confident in the solutions we offer them," she said.
(Additional comments by Howard Dahdah.)