Novell glows from US$434m fling with Microsoft

Since November 2006, the companies have worked together to promote and improve interoperability between Microsoft's Windows and Novell's SUSE Linux Enterprise operating systems in an arrangement the open source industry sees as an unholy marriage.

"We have a great relationship with Microsoft, and it's really unique," said Susan Heystee, Novell's General Manager of Global Strategic Alliances.

Heystee does not expect Microsoft to make a bid for Novell.

"You can never say never, but it's certainly not something that I would see, she told iTnews.

When announced in 2006, the alliance sparked criticism from open source advocates who feared a patent war between Microsoft and the open source community.

However, Heystee said the partnership has yielded technology innovations that meet customers' demand for interoperability between Microsoft's products and Linux.

In Australia until May 9 to meet with partners, Heystee described the Microsoft-Novell alliance as more than just a patent swap.

"From day one, [the partnership] has been grounded in the customer; there was a lot of demand for Microsoft to support Linux and invest in interoperability," she said.

The original agreement called on Microsoft to purchase US$240 million worth of SUSE Linux certificates to distribute among its customers, as well as investing US$34 million and US$60 million respectively in joint sales and marketing teams with Novell.

Both companies also entered into a technology innovation agreement to develop bilateral virtualisation between Windows server and SUSE Linux, a systems management standard, a translator between the Open XML and ODF formats and directory interoperability.

In August 2008, Microsoft agreed to purchase an additional US$100 million worth of SUSE Linux Enterprise certificates, bringing its total Novell investment to US$434 million.

The team also has launched new development efforts surrounding the open source .NET development framework MONO, as well as working on a Linux management pack for Microsoft's Systems Center Operations Manager that will come to market this month.

"There's been significant work from a technology perspective to ensure very strong performance from both platforms to interoperate at a high level," Heystee said.

"We have really been going to market together not only on SUSE Linux Enterprise, but a number of technology innovations and actual projects that we've had underway for the past couple of years".

Novell has already attracted more than 300 large, global accounts through its alliance with Microsoft, Heystee noted.

She cited government accounts in the U.S., Germany, Japan, Singapore, Brazil, Portugal and Italy as examples, as well as companies such as Walmart, BMW, HSBC, SouthWest and Gulfstream.

"In talking with many of the customers, they are very interested in having both Microsoft and Novell at the table, especially if they're standardising on Linux and Windows in the data centre," Heystee said.

"In partnering with Novell, [Microsoft] has really created more opportunity to go and sell additional Microsoft solutions, and also to promote Windows as a platform that can interoperate with Linux".