In the third of a series of interviews by Linux Foundation executive director Jim Zemlin, Novell CEO Ron Hovsepian (right) insisted his company is not being hurt by its association with Microsoft.

“Novell grew 200% in the SUSE Linux marketplace year-over-year from an invoicing perspective,” he said. The overall market is growing at 22% according to IDC,” and “we’re taking some market share from our competitors.

“The key to that success has been better Windows co-existance, he insisted. “The realities of a customer’s world is that they’re going to live with both for a long time in our lifetime,” and the Microsoft relationship helps with that.

Hovsepian said Novell has “doubled down” on Mono, the .Net implementation led by Miguel de Icaza which today was renamed Duo in (of all places) Madagascar.

Hovsepian talked a lot about “customer wins” — 20,000 desktops at PSA Peugeot, the State Electronics Agency in Tamil Nadu with 30,000, Credit Suisse, Nationwide and CVS — as justifying the strategy.

Again and again, Hovsepian went back to the idea of the mixed environment. “We have to understand that the customer’s probably going to have a few stacks of software sitting there that aren’t ours” and a “religious approach” won’t work.

We’ve got to make that marriage occur out in the market with the community and the customers. If not, we’ll have a great community success and Linux will go down as one of the greatest community innovations, but it may be a marginal commercial success.

“The reason why we’ve got to make it a commercial success is that’s the money that feeds back into the community that allows us to go hire the next ten developers that go back into the community.”

Rather than focusing on Microsoft, Zemlin pointed Hovsepian to Sun and Open Solaris, where his comments were unusually pointed.

“I believe OpenSolaris has had about 60,000 downloads last time I looked,” he said. “When you look at Linux downloads just last year [there were] over two million of just SUSE.”Hovsepian also attacked the OpenSolaris license directly.

“I would suggest to the customers and to the community, be careful. The way they’ve written their contract as soon as you look at it, you can’t go back and look at Linux.

“It’s a very dangerous contract from my perspective for someone who wants to work on Linux.”

Hovsepian called OpenSolaris a “stalking horse” aimed at reducing Solaris erosion, then compared Linux to Secretariat, riding around the rails to victory. (Historical note: the horse that lost all 1973 Triple Crown races to Secretariat was named Sham.

Asked where he expects Linux to grow fastest, Hovsepian mentioned cloud computing, virtualization, and network fabrics, then focused on embedded applications

“I think the embedded Linux space is going to take off like a rocket” with niche companies developing in telco, financial services, and manufacturing,” he said.

He added that “Core open source applications on a J2EE framework, I think there’s a lot of business opportunity there.

“If I was an investor again I would be looking closely at those companies that serve noncompetitive commercial market segments where I could share” data, like insurance companies or retailers, and the public sector “where many different countries or states could share information and share application development.”

If you see Michael Chertoff sporting a button with a Linux penguin on it, you read it here first.