Two years ago, Microsoft Corp. agreed to buy US$240 million worth of support vouchers for Novell Inc.'s SUSE Linux operating system as part of a controversial partnership deal between the two vendors. Now Microsoft is reaching into its pocket again, to the tune of another $100 million.
The once-bitter rivals -- which are still facing off against each other in an antitrust lawsuit that Novell filed in 2004 -- jointly announced last week that Microsoft has committed to purchase up to $100 million worth of additional support vouchers from Novell, starting Nov. 1.
Microsoft resells the vouchers to customers that are looking to run mixed installations of Windows and SUSE Linux systems. The unusual scenario in which the world's dominant proprietary software vendor is helping to market an open-source operating system that's a rival to Windows began in November 2006, when Microsoft and Novell signed their patent cross-licensing and software interoperability deal.
By entering into the agreement, Microsoft acknowledged that many of its corporate users were also fans of open-source software. To prove that point, the two companies said last week that $157 million worth of SUSE Linux support vouchers had been redeemed by Microsoft customers as of May.
Customers that have bought vouchers for SUSE Linux support subscriptions include Wal-Mart , HSBC Holdings , Renault, Southwest Airlines and BMW, according to Microsoft and Novell. All told, about 100 companies have redeemed vouchers thus far, with a "pretty good percentage" of them being new customers for Novell, said Susan Heystee, vice president and general manager of global strategic alliances at Novell.
Susan Hauser , general manager of strategic partnerships and licensing at Microsoft, confirmed that some of the subscription vouchers have been sold to customers for less than face value. But she added that Microsoft hasn't given any of them away for free.
Although the deal with Microsoft has boosted Novell's bottom line and helped the company make some inroads against Linux market leader Red Hat Inc., Novell's total revenue has risen only slightly over the past two years.