Microsoft and Novell Enter Broad Linux Pact

For the second time this week Microsoft is embracing open source, this time pacting with Novell to improve interoperability between Windows and SUSE Linux.

Microsoft and Novell has announced a broad, multi-year agreement to improve interoperability between Microsoft’s Windows operating systems and Novell’s SUSE Linux. Under the deal, the companies will pay each other to cross-license patented technologies and work together to ensure and improve the interoperability of Windows and SUSE Linux—and Microsoft will officially recommend SUSE Linux Enterprise for customers who want both Linux and Windows solutions. The deal will be in place through at least the year 2012, and the companies will create a joint research facility to design and implement new software solutions.

The agreement covers three broad areas: virtualization, tools for managing mixed environments, and document format compatibility. Virtualization work will focus on both running virtual Linux servers under Windows and running virtual Windows installations under Linux, offering customers flexibility in setting up and consolidating servers. The companies will also create tools to simplify management o both Windows and SUSE Linux in a networked environment, including tools for integrating Microsoft’s Active Directory with Novell’s eDirectory. The companies will also work on document sharing between Microsoft Office and Open Office applications and improving interoperability between Open XML and OpenDocument formats.

"They said it couldn’t be done. This is a new model and a true evolution of our relationship that we think customers will immediately find compelling because it delivers practical value by bringing two of their most important platform investments closer together," said Microsoft CEO Steve Ballmer.

In addition, the two companies have agreed not to assert patent rights against each others customers; although no figures have bee disclosed, each company will pay the other up-front for release from possible patent liability, which means Microsoft—with its far greater sales—will pay more money to Novell than Novell will pay to Microsoft. Novell will make ongoing payments on a percentage of its revenues from open source products. Under a co-marketing arrangement, Microsoft will offer 70,000 coupons a year to its customers good for a year’s worth of maintenance and updates to SUSE Linux.

The announcement marks Microsoft’s second major deal with the open source marketplace in a week; Tuesday, the company announced a deal with open source developer Zend to improve the performance of PHP on Windows platforms.

The deal with Novell comes just two years after Microsoft paid the company $536 million to settle portions of antitrust claims brought against the software giant.