Microsoft-Novell Linux Deal To Grow by $100 Million

• By Kurt Mackie
• 08/21/08

Microsoft plans to pour an additional chunk of money into its business and open source technology collaboration with Novell, according to an announcement issued by the companies Wednesday. The deal calls for Microsoft to buy $100 million more in support certificates for Novell SuSE Linux Enterprise Server. Microsoft's expects to have the new investment in place by Nov. 1.

The certificates are sold to companies and provide Novell's integration support, assuring the interoperability of Novell's open source Linux system with Microsoft's proprietary Windows Server. The deal furthers a near two-year-old arrangement between the companies that protects Microsoft's intellectual property while fostering product interoperability.

The two companies are targeting large businesses that run heterogeneous computing environments. In those environments, open source servers may need to work with Microsoft's solutions, or the companies may lack the expertise to add open source solutions on their own.

Microsoft's investment expands an initial five-year deal with Novell that was announced in November of 2006. At that time, "Microsoft purchased $240 million of Novell certificates," according to Microsoft's announcement. About 65 percent of those certificates have been sold thus far.

In addition to assuring interoperability, Microsoft emphasizes its own intellectual property (IP) protection in its collaboration with Novell. Customers can be assured of not being sued by buying the certificates, which Microsoft calls "IP peace of mind."

"Our increased investment in the relationship with Novell is intended to give these customers and partners the best possible Windows-Linux interoperability solution, while also extending their existing Windows Server investments and helping to give them IP peace of mind," explained Kevin Turner, Microsoft's chief operating officer, in a prepared statement.

Microsoft agreed not to sue Novell over alleged Linux patent violations when it initially announced its collaboration arrangement with the company in a deal that is still highly controversial. A Microsoft executive later told Fortune magazine that open source software violated 235 of Microsoft's patents, causing much outrage among the open source community. Subsequent to its Novell deal, Microsoft cut similar intellectual property deals with other Linux vendors, including Xandros, Linspire and LG Electronics. However, some Linux vendors fought back.

Microsoft has been trying to be more accommodating with other software vendors -- at least in terms of enabling interoperability. In February, Microsoft issued its general interoperability principles and released some of the protocol documentation needed to create application programming interfaces between Microsoft and non-Microsoft software products. However, Microsoft still protects its intellectual property in ways that do not suit some open source licensing, such as the GNU General Public License.

Novell and Microsoft's collaboration gained steam back in September of last year, when the two companies opened an Interoperability Lab in Cambridge, Mass. The lab provides an enterprise-like environment to test a mixture of technologies. The companies currently are working on projects encompassing virtualization, systems management, identity federation and document format compatibility using open source solutions and standards.