Microsoft: Linuxs Biggest Patron

Opinion: Through its settlements with Sun and Novell, which total more than $2.4 billion, Microsoft has bought an extra dose of punishment from competitors focused on popularizing Linux.

Which company is the biggest spender in the Linux world? Is it IBM? Sun Microsystems? Red Hat? Novell? No, the biggest spender in Linux, at least this year, is arguably the company most threatened by its success.

With this weeks $536 million settlement of a legal battle with Novell and Aprils $1.9 billion deal with Sun Microsystems, Microsoft has now agreed to pay more than $2.4 billion to companies likely to spend the money popularizing the arch-enemy of all things Microsoft.

Redmond is spending this huge sum of money voluntarily in an effort to get its legal problems behind it. By doing so, Microsoft is not only paying for its sins but also buying an extra dose of punishment from two competitors.

Given that neutralizing the Linux threat is Job No. 1 for many at Microsoft these days, a fair question after considering these huge settlements with competitors is, "Has Bill Gates gone nuts?"

My bet is that Bill has done his "Amazing Kreskin" routine and decided that no amount of money will save Novell or Sun from the fates that await them. But settling the cases will reduce distractions and some long-term uncertainty, both noble goals.

Microsoft has never actually lost a lawsuit. Sure, some judges have ruled against the company, but never in a way that really hurt the company in the marketplace or brought vanquished competitors back to life.

Redmond has the money to solve legal battles on its own terms, either by drawing out the proceedings to the point of inconsequence or writing a check just to make things go away. Sometimes, Microsoft even scores a trifecta: solving a legal battle, looking like the good guy and making money all in a single swoop—as it did with its $150 million purchase of Apple shares in 1997, later sold for a tidy profit.

Next Page: Sun is still in trouble.