Microsoft to buy up to $100M in Novell SUSE Linux support vouchers

It continues a cross-licensing deal between the two companies

Microsoft Corp., which two years ago agreed to buy and resell $240 million worth of enterprise support subscriptions for Novell Inc.'s SUSE Linux Enterprise Server operating system, will buy and resell up to another $100 million of vouchers, the two companies said today.

The unusual scenario in which the world's dominant proprietary software vendor is helping to market open-source software such as Linux began in November 2006, when the two former foes agreed to a set of pioneering cross-licensing and interoperability deals, with Microsoft admitting that many of its business customers were also fans of open-source software.

Microsoft sold $156 million worth of support vouchers within 18 months to customers such as Wal-Mart, HSBC Holdings, Renault, Southwest Airlines, BMW and others, according to Susan Hauser, general manager of strategic partnerships and licensing at Microsoft.

All told, about 100 companies have bought the subscription vouchers, with a "pretty good percentage" of them being new customers for Novell, said Susan Heystee, vice president and general manager for global strategic alliances at Novell.

Meanwhile, Hauser confirmed that some of the subscription vouchers were sold to customers for less than face value, though none were given away for free.

Though the deal has added to Novell's bottom line and helped make some inroads against market leader Red Hat Inc., Novell's revenue has risen only slightly since the deal was announced nearly two years ago, while its stock price is down slightly.

Novell is not directly helping to market Microsoft's equivalent to SUSE Linux, Windows Server 2008, to its customers, Heystee said.

Copyright © 2008 IDG Communications, Inc.

7 inconvenient truths about the hybrid work trend
Shop Tech Products at Amazon