Microsoft, Novell say alliance still bearing fruit

After three years, both sides happy but interop deal a particular boon to Novell

The alliance between Microsoft Corp. and Novell Corp. continues to bear fruit three years after it was first signed, say the two companies -- one the world's largest proprietary software vendor, the other one of the largest open-source companies.

Once outright enemies on the opposite sides of an anti-trust lawsuit, Microsoft and Novell bridged that divide when they signed a controversial deal that included co-marketing arrangements as well as patent protection from Microsoft for Linux users.

They now have 475 joint customers running both Windows Server and Novell's SUSE Enterprise Linux side-by-side in data centers, the companies said at a press conference in Seattle on Monday. That's up from 100 a little more than a year ago, and the 300 it announced just 5 months ago.

For Novell, the alliance has been a particular boon. Revenue related to SUSE Enterprise Linux is up 50% year over year, said Susan Heystee, vice-president and general manager for global strategic alliances at Novell. Most of that comes from $225 million in SUSE support vouchers purchased and sold by Microsoft to customers running both Windows Server and SUSE Linux.

In addition to the $240 million in vouchers it first purchased, Microsoft agreed last August to buy up to an additional $100 million in vouchers. Ted MacLean, general manager for strategic partnerships and licensing at Microsoft, said it was too early for Microsoft to commit to buying more.

Novell also claims 20 customers that are moving from using Red Hat Enterprise Linux or CentOS to SUSE, for which it is temporarily providing support until they complete the transition to Novell's platform, Heystee said.

To further broaden its base, Novell is considering adding support for Oracle Unbreakable Linux, Heystee said. "We're looking at it, since we've gotten quite a few requests from people having support issues" with Oracle, she said. "You do see a trend there, of customers wanting to work with the manufacturer of the Linux distro itself."

Heystee said customers see only the upsides of the alliance, which on the technical side involves making SUSE Linux "the perfect guest" on Windows Server's Hyper-V virtualization, and easier to manage for Windows administrators.

They don't fixate on the political ramifications, such as the Linux patent protection deal, she said. "It was controversial in the beginning; it is far from that today," she said.

While Microsoft has also been increasing its cooperation with Red Hat, MacLean said there's no comparison with its tie-up with Novell.

"I'd characterize the relationship between Microsoft and Red Hat as fairly one-dimensional. We validated each other's solutions, and that's it," MacLean said. "With Novell, it is multi-dimensional."

For instance, SUSE Linux can now be moved as a guest OS from server to server without any downtime using Windows Server 2008 R2's Live Migration feature. This helps Windows Server and Hyper-V compete better against VMware Inc.'s ESX.

Also, Microsoft and Novell are working to enable Linux users to be able to automatically log into SharePoint and other Microsoft applications, said Jose Thomas, a technical solutions director at Microsoft. This is done by making interoperable Microsoft's Active Directory Federation Service and Novell's Access Manager.

Software is being developed to run this on top of a Dell Inc. server that will come to market by the first half of next year, Thomas said.

Forrester Research Inc. analyst Christopher Voce said such interoperability is desperately needed. "Islands may be great for vacations, but they are not so good for the data center," he said.

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