Microsoft forks out £50m to extend Novell Linux pact

The proprietary and open-source vendors have extended their deal: Microsoft will sell more Suse licences, while joint R&D will continue
Written by Tom Espiner, Senior Reporter on

Microsoft and Novell have extended their interoperability agreement for server operating systems, Microsoft announced on Wednesday.

As part of the agreement, Microsoft will purchase $100m (£50m) worth of certificates that its customers can use to buy support for Novell Suse Linux Enterprise Server installations, or for support in migrating to an "enterprise-class Linux platform", the company said.

The pact between Microsoft and Novell was announced in November 2006. As part of the initial five-year partnership deal, Microsoft purchased $240m worth of Novell certificates to sell to customers. Novell has invoiced for approximately $157m since the collaboration started.

"The collaboration between Microsoft and Novell has been built on our desire to meet our customers' real-life IT requirements as well as give our partners greater breadth in their solution offerings," said Kevin Turner, chief operating officer at Microsoft, in a statement. "Some customers have told us they want to be able to run Windows Server and Linux together, but in many cases, they need help with the transition to Suse Linux Enterprise Server from other Linux environments."

The partnership also hinges around patent claims Microsoft has made. In May 2007 Microsoft asserted that free and open-source software violated 235 of its patents, but never substantiated those claims. However, lack of substantiation did not stop the software giant from asserting that, as part of the Microsoft-Novell agreement, it would not enforce its supposed intellectual property rights against Novell customers.

The deal seems to have been successful in building market share. In an email interview, a Novell spokesperson told ZDNet.co.uk that the deal had been extended due to customer demand.

"The incremental investment was made in order to meet the increasing customer demand for a business model that delivers integration of Suse Linux Enterprise and Microsoft Windows and provides IP peace of mind for organisations operating in mixed-source environments," stated the spokesperson. "By taking a leading position in interoperability and IP protection, Novell is becoming the preferred Linux choice for the integrated enterprise. In FY2007, Suse Linux Enterprise invoice revenue grew 243 percent. In our most recent publicly reported quarter — Q2 2008 — Suse Linux Enterprise invoicing was up 49 percent over Q2 2008."

The original deal between Microsoft and Novell also took in research and development, especially around virtualisation, web services for server management, and Microsoft Office-OpenOffice.org compatibility.

Microsoft said that together with Novell it would continue technical collaboration on virtualisation, systems management, directory and identity federation, document format compatibility, accessibility technology, and the Moonlight multimedia framework.


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