Historic Microsoft, Novell Pact Aimed To Boost SUSE Linux Business

At a press conference in San Francisco Thursday, the CEOs of both companies said they have been crafting a far reaching pact over the past six months that will result in improved interoperability between Windows and Linux and that contains a new "patent covenant" that will free their mutual customers from potential legal liabilities when deploying joint Windows-Linux solutions.

Perhaps most surprising is Microsoft's commitment to distribute 70,000 coupons for SUSE Linux Enterprise 10 subscriptions to its customers that want to use Linux in Windows environments. As part of the deal, Microsoft and Novell also pledged to align their sales and marketing engines to promote use of Windows and SUSE Linux together.

Microsoft CEO Steve Ballmer said the two companies will remain rivals in the operating system and applications software business. But he emphasized that cooperation on all fronts -- technical, legal and business -- will grow business for both companies since most customers mix and match open source software and proprietary software at their sites.

"It's a set of agreements that will really help bridge the divide between open source and proprietary source software," Ballmer said. "It will greatly enhance the interoperability between SUSE Linux and Windows and it creates an IP bridge between the open source and proprietary source business models."

The pact, Ballmer said, is only possible because Novell sells and supports proprietary software as well as open source software and has a patent portfolio of its own. Red Hat, in contrast, supports only open source software and the general public license that governs the development of Linux.

One Novell partner was shocked when he first got wind of the deal. "My first reaction is that Red Hat is in serious trouble, but Novell needs Red Hat around so that they don't become the only player in town," said Paul Anderson, president of Novacoast, a large Novell partner. "It's very strange."

Together on stage with several mutual customers and partners, Ballmer and Novell CEO Ron Hovsepian said the extensive technical cooperation planned will enable faster adoption of next generation virtualization, management and document format technologies in the next generation data center, both executives said.

For instance, the companies agreed to improve interoperability by enhancing and optimizing performance of Linux workloads on Microsoft's virtualization platform and conversely, virtualized Windows workloads that run on SUSE Linux Enterprise 10's Xen-based virtual platform.

But additionally, the two pledged to collaborate on Web service management and develop solutions that will help customers more easily manage, automate and provision distributed applications and virtualized workloads in mixed Windows-Linux sites.

Finally, the two pledged to make their respective Active Directory and eDirectory more interoperable and build translators between Microsoft Office and Novell's OpenOffice 2.0 implementation in SUSE Linux Enterprise Desktop 10.

Microsoft and Novell have sparred for more than a decade in the software market and in federal and international courts related to antitrust concerns and IP issues. But last April, Novell's Hovsepian -- who assumed the role of CEO in June -- called his former customer, the CIO of Wal-Mart, turned Microsoft COO, Kevin Turner.

He told Turner that Novell and Microsoft faced the same problem: meeting the needs of mutual customers who demanded solutions to the littany of interoperability problems affecting Windows and Linux, the two leading operating system platforms in the world today. The two companies agreed to meet, and met in May, Hovsepian recalled.