Novell widens Linux accord with Microsoft

Novell's Linux revenue rose 31 percent in the second quarter over last year.

Microsoft Corp.'s unlikely alliance with Linux software vendor Novell Inc. of Waltham is getting stronger.

The two companies plans to disclose today that Microsoft will spend up to $100 million to purchase service and support licenses for Novell's SUSE Linux Enterprise operating system. That's in addition to the $240 million Microsoft had initially agreed to spend on the licenses.

Microsoft will resell the licenses to corporate users of Microsoft's Windows operating system to help customers who want to run both Linux and Windows inside their data centers.

"Our increased investment in the relationship with Novell is intended to give our customers and partners the best possible Windows-Linux interoperability solution," said Microsoft's chief operating officer Kevin Turner.

In addition, Novell will invest an undisclosed amount to provide additional training and support for customers who want to run combined Linux-Windows networks. "We're launching expanded tools around the program, specifically around the area of certification and training," said Susan Heystee, Novell's vice president and general manager for global strategic alliances. The two companies will also continue to run a laboratory in Cambridge that develops tools and techniques to ensure their operating systems work well together.

The expanded license deal comes nearly two years after Microsoft and Novell stunned the software industry by revealing their partnership in November 2006. Prior to that, Microsoft had been a relentless enemy of the Linux operating system, developed by independent software engineers around the world. Linux can be obtained free of charge, though most corporate users purchase it from vendors like Novell, which provide service and support.

Microsoft executives alleged that Linux contained stolen Microsoft intellectual property. Linux supporters said the charge was intended to scare people away from switching from Microsoft Windows to Linux.

But in 2006, Microsoft struck a deal with Novell that included cross-licensing of intellectual property, so that users of Novell's SUSE Linux were protected from legal attack by Microsoft. In addition, Microsoft agreed to buy and redistribute SUSE Linux licenses worth $240 million over five years and to work with Novell to make Windows and Linux work smoothly together.

Microsoft resold $157 million of Novell's Linux licenses as of April, providing a major boost to Novell's revenues. In the second quarter of 2008, ended May 28, revenue for Novell's Linux business was up 31 percent from the previous year.

"Their billings are up quite a bit," said Al Gillen, an operating systems analyst at IDC Corp. in Framingham. "It's been good for Novell."

Hiawatha Bray can be reached at bray@globe.com.