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As if stepping on the Linux community's toes when they first teamed up wasn't enough, Microsoft (Nasdaq: MSFT) and Novell (Nasdaq: NOVL) have announced a joint push into the China market to attack the Linux installed base there.
They have launched what they call "an incremental investment in their relationship" that will focus on "converting unsupported Linux users to supported Suse Linux Enterprise."
The effort is the result of increasing customer 
demand in the region for their business model solution, which "builds a bridge between open source and proprietary software" and provides "interoperability and intellectual property peace of mind" for organizations operating mixed-source IT environments, the two firms said.
The Other Players
Currently, the major Linux players in the China market are home-grown Red Flag; Hong Kong-based Sun Wah Linux; Japanese player TurboLinux; and Red Hat (NYSE: RHT).
Of the other players, only TurboLinux has joined Microsoft's Interop Vendor Alliance, which seeks to help vendors insure interoperability between their applications and Microsoft's; the rest remain independent.
Red Flag
Red Flag Linux was created by the Chinese Academy of Sciences' Institute of Software and was rolled out in August 1999. A Chinese Linux distribution, its logo is Tux, the Linux penguin, carrying a -- you guessed it -- red flag.
It joined the Open Source Development Labs in January 2006, and claims to have more than 80 percent market share for Linux desktops in China as of 2006. Reports say HP (NYSE: HPQ) and Dell (Nasdaq: DELL) have agreed to sell Red Flag Desktop 5.0 in China pre-installed on their desktops and notebooks.
The internal structure of Red Flag Linux is similar to Red Hat Linux, but its desktop is similar to that of Windows NT, according to reports.
Red Flag's investors are government-owned ShangHai NewMargin Venture Capital and CCIDNET Investment, a venture capitalist arm of China's Ministry of Information Industry.
Sun Wah Linux
Back in 2005, Sun Wah Linux announced the sale of nearly 142,000 Linux PCs in what it said was the largest Linux desktop rollout in China to date, to the Jiangsu Provincial Department of Education. Sun Wah also provided maintenance, tech support and Linux training to schools and universities supplied with its operating system.
The sale was part of the Chinese government's "School-to-School Project," which aims to connect 90 percent of the schools in China to the Internet by 2010.
Sun Wah Linux is based on the community-driven Debian GNU/Linux distribution. The company has strong ties with China, and has set up subsidiaries in Beijing and Nanjing. It teamed up with other Chinese Linux vendors in July 2005 to create a China Linux reference platform -- a basic Linux platform creating a nationwide standard.
TurboLinux
Based in Japan, with branches in China and the U.S., TurboLinux claimed in 2005 that market research firm IDC's statistics showed it was the leading Linux player in China for the fourth consecutive year.
In 2004, China's Ministry of Railways agreed to deploy TurboLinux in 14 railway bureaus, 230 railway stations and more than 440 package processing stations; China's most powerful supercomputer, the Dawning 4000 A, launched November 2004, uses TurboLinux; and in 2005 the company signed up China's biggest bank, the Industrial and Commercial Bank of China (ICBC), as a customer.
Red Hat
A pretty big player here in the U.S. and worldwide, Red Hat signed up the Agricultural Bank of China in 2005 as a customer. The bank planned to move to Linux thin-client terminals based on a Red Hat distribution.
Unsupported? Sez Who?
Just which vendors do Novell and Microsoft mean when they say they're targeting unsupported Linux installations? Not the major players, for sure: "All of these suppliers offer some form of technical support," Dan Kusnetzky, principal analyst at The Kusnetzky Group, told LinuxInsider."I would have to believe that an organization that acquires Linux for a business or mission critical task would have plans for support of the basic infrastructure software. That support, by the way, might come directly from the open source community rather than any specific vendor," Kusnetzky added.
However, TurboLinux, Red Flag and Sun Wah Linux may not be able to live up to support expectations. "I am very familiar with these companies and, while their commitment to Linux and open source software is sincere, they are undercapitalized and not always able to deliver on support and service to meet growing market needs," Linux veteran Bill Weinberg told LinuxInsider. He is concerned about "their viability and ability to deliver in the long term."
So who would really be targeted? The international corporations with offices in China.
"There is a percentage of the market there that consists of international corporations and some of the large international corporations would not be exempt from licensing issues if they were raided," Jim McGregor, research director and principal analyst at In-Stat, told LinuxInsider.
All That Glitters
So, is the Microsoft/Novell team the result of a meeting of the minds? Not likely.
"I believe that the gambit being deployed is that the Microsoft/Novell combination would be better able to support a combined Windows/Linux environment because these two companies have cross support agreements, escalation processes and support training in place already," Kusnetzky said.
"When Microsoft got into the deal with Novell, it's a question of 'Keep your friends close and your enemies closer,'" In-Stat research director and principal analyst Jim McGregor told LinuxInsider.
"Do I think there's any friendly partnership between the two? Absolutely not: Microsoft is doing everything it can to push its applications and realizes a lot of apps are going Linux," McGregor added. "Microsoft is playing all sides."
The move into Linux is part of Microsoft's reinventing itself because "its traditional software model is tapped out now," McGregor said. "Microsoft is looking for a new model in emerging markets."
The problem is that "most software is basically free; it takes much more engineering work than hardware does but it tends to be free," McGregor said.
The Internet has exacerbated the situation, and "It's a challenge, not only for Microsoft but for a lot of other industry vendors, to cope with the changes," McGregor said.
There are also legal issues that arise: Working through Novell lets Microsoft "neatly sidestep intellectual property issues by not actually redistributing Linux themselves," Weinberg said. If Microsoft shipped Linux code directly, it would "only endanger those claims (that Linux infringes on its intellectual property)."
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