Microsoft buying $240 million worth of SUSE Linux

The agreement between Novell and Microsoft is actually three agreements, and one of them will see Microsoft buying $240 million of SUSE Linux certificates. New details about the deal surfaced yesterday in a Novell filing with the SEC, where the company spelled out the financial arrangements in detail.

The two companies have actually signed three separate agreements: a Business Collaboration Agreement, a Technical Collaboration Agreement, and a Patent Cooperation Agreement. All three deals are designed to make virtualization simpler, something we suspected when the announcement was first made. The agreement on technical collaboration requires both companies to make sure that their respective operating systems run well as guest systems, and both have agreed to make it easy for each operating system to "command, control, and configure" the other OS in a virtual machine environment. The two firms will also work on interoperability between the ODF and Office Open XML file formats.

Interesting, to be sure, but what about the money? The Business Collaboration Agreement is the one that will have Microsoft buying $240 million of SUSE subscription certificates, which the company can distribute as it sees fit. Microsoft will also spend the least $12 million a year marketing the Windows/Linux combination and will pump $34 million into developing a sales force for the combined offering.

The Patent Cooperation Agreement means that both Microsoft and Novell agree not to sue end-users of either SUSE or Windows for potential patent violations found in the respective operating systems. Microsoft will make a one-time payment of $108 million to Novell, and Novell will turn around and pay at least $40 million each year back to Microsoft for a minimum of five years (the exact amount depends on sales of certain Novell products).

This last agreement has raised questions within the open source community among users who are concerned that it might violate Novell's GPL obligations. The worry is that Novell has agreed to "license" patents from Microsoft that potentially cover certain aspects of Linux, but Novell stresses that is not the case. The agreement "does not include a patent license or covenant not to sue from Microsoft to Novell," Novell said in a statement. "Novell's customers receive a covenant not to sue directly from Microsoft. We have not agreed with Microsoft to any condition that would contradict the conditions of the GPL and we are in full compliance."

Novell further asserts that there was no threatened litigation from Microsoft that caused it to cut the deal.

Source : http://arstechnica.com/news.ars/post/20061108-8178.html