Novell outlines details of agreement with Microsoft
The financial terms of the agreements include payments for pre-paid SUSE Linux Enterprise subscriptions, sales, marketing and development commitments, and payments under the patent cooperation agreement. The company also provided answers to a series of questions raised by the open source community in an FAQ posted on its Web site.
Novell reinforced its commitment to working with the open source community and to fully meeting the requirements of the GNU General Public Licence ("GPL") which governs the distribution of Linux and other free software.
"The financial commitments that Microsoft is making as part of this agreement are significant," says Ron Hovsepian, president and CEO of Novell. "This will help drive Linux more rapidly into the enterprise and government arenas, broadly expanding opportunities for Linux and open source. This is good for Novell, but it is also good for the community because it will make Linux and open source much more prevalent and drive demand for Linux-based solutions."
As part of the business cooperation agreement, Microsoft will make an upfront payment to Novell of $240m for SUSE Linux Enterprise Server subscription certificates. Microsoft may use, resell or distribute them over the term of the agreement, allowing customers to redeem a single or multi-year subscription for upgrades, updates and technical support from Novell.
Microsoft will dedicate $60m total over the five-year period for marketing Linux and Windows virtualised scenarios and will also spend $34m over the five-year term of the agreement for a Microsoft salesforce devoted primarily to marketing the combined offering.
Additionally, under the business collaboration agreement, Microsoft agreed that for three years, it will not enter into an agreement with another Linux distributor to encourage adoption of Linux/Windows virtualisation solutions through a Linux subscription certificate programme. IDC projects the market for virtual machine software to be $1,8bn by 2009.
Under the patent co-operation agreement, Microsoft will make an up-front net payment to Novell of $108m, and Novell will make ongoing payments of at least $40m over five years to Microsoft, based on percentages of Novell’s Open Platform Solutions and Open Enterprise Server revenues.
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