Microsoft and Novell Announce Broad Collaboration on Windows and Linux Interoperability and Support Companies Also Announce a Patent Agreement Covering Proprietary and Open

Source Products



    REDMOND, Wash., and WALTHAM, Mass., Nov. 2 /PRNewswire-FirstCall/ --
 Microsoft Corp. (Nasdaq:   MSFT) and Novell Inc. today announced a set of
 broad business and technical collaboration agreements to build, market and
 support a series of new solutions to make Novell and Microsoft(R) products
 work better together. The two companies also announced an agreement to
 provide each other's customers with patent coverage for their respective
 products. These agreements will be in place until at least 2012. Under this
 new model, customers will realize unprecedented choice and flexibility
 through improved interoperability and manageability between Windows(R) and
 Linux.
     (Logo: http://www.newscom.com/cgi-bin/prnh/20000822/MSFTLOGO )
     "They said it couldn't be done. This is a new model and a true
 evolution of our relationship that we think customers will immediately find
 compelling because it delivers practical value by bringing two of their
 most important platform investments closer together," said Steve Ballmer,
 CEO of Microsoft. "We're excited to work with Novell, whose strengths
 include its heritage as a mixed-source company. Resolving our patent issues
 enables a combined focus on virtualization and Web services management to
 create new opportunities for our companies and our customers."
     Under the agreement, Novell is establishing clear leadership among
 Linux platform and open source software providers on interoperability for
 mixed-source environments. As a result, Microsoft will officially recommend
 SUSE Linux Enterprise for customers who want Windows and Linux solutions.
 Additionally, Microsoft will distribute coupons for SUSE Linux Enterprise
 Server maintenance and support, so that customers can benefit from the use
 of an interoperable version of Linux with patent coverage as well as the
 collaborative work between the two companies.
     "Too often technology companies ask their customers to adapt to them.
 Today we are adapting to our customers," said Ron Hovsepian, president and
 CEO of Novell. "Microsoft and Novell are enabling customers to take
 advantage of each other's products where it makes sense in their enterprise
 infrastructure. We jointly believe that our business and patent agreements
 make it possible to offer the highest level of interoperability with the
 assurance that both our companies stand behind these solutions."
     Agreement Has Broad Scope
     The two companies will create a joint research facility at which
 Microsoft and Novell technical experts will architect and test new software
 solutions and work with customers and the community to build and support
 these technologies. The agreement between Microsoft and Novell focuses on
 three technical areas that provide important value and choice to the
 market:
     -- Virtualization. Virtualization is one of the most important trends in
        the industry. Customers tell Microsoft that virtualization is one way
        they can consolidate and more easily manage rapidly growing server
        workloads and their large set of server applications. Microsoft and
        Novell will jointly develop a compelling virtualization offering for
        Linux and Windows.
     -- Web services for managing physical and virtual servers. Web services
        and service-oriented architectures continue to be one of the defining
        ways software companies can deliver greater value to customers.
        Microsoft and Novell will undertake work to make it easier for
        customers to manage mixed Windows and SUSE Linux Enterprise
        environments and to make it easier for customers to federate Microsoft
        Active Directory(R) with Novell eDirectory.
     -- Document format compatibility. Microsoft and Novell have been focusing
        on ways to improve interoperability between office productivity
        applications. The two companies will now work together on ways for
        OpenOffice and Microsoft Office system users to best share documents,
        and both will take steps to make translators available to improve
        interoperability between Open XML and OpenDocument formats.
     "As a result of this collaboration, customers will now be able to run
 virtualized Linux on Windows or virtualized Windows on Linux," said Jeff
 Jaffe, executive vice president and chief technology officer at Novell.
 "Customers continually ask us how they can consolidate servers with
 multiple operating systems through virtualization. By working together,
 Novell and Microsoft enable customers to choose the operating system that
 best fits their application and business needs."
     The patent cooperation agreement enables Microsoft and Novell to give
 customers assurance of protection against patent infringement claims. It
 gives customers confidence that the technologies they use and deploy in
 their environments are compliant with the two companies' patents.
     As part of this agreement, Microsoft will provide a covenant not to
 assert its patent rights against customers who have purchased SUSE Linux
 Enterprise Server or other covered products from Novell, and Novell will
 provide an identical covenant to customers who have a licensed version of
 Windows or other covered products from Microsoft.
     "Both companies had to think creatively about how to create an
 intellectual property bridge between the two worlds of open source and
 proprietary software," said Brad Smith, senior vice president and general
 counsel of Microsoft. "This bridge is built on respect for the innovations
 of each company and the open source community, and a passion for what we
 can deliver for our customers together."
     Customer and Partner Reaction
     Microsoft and Novell announced the new alliance at an event attended by
 several customers and partners.
     "We applaud Novell and Microsoft in their efforts to provide greater
 Windows and Linux interoperability," said Paul Otellini, president and
 chief executive officer of Intel Corporation. "Customers want solutions
 that meet their individual needs, and higher levels of software
 interoperability give them the ability to more easily make the best
 choices."
     "Windows and Linux are extremely important to our enterprise customers
 and the industry, and AMD strongly supports both," said Hector Ruiz,
 chairman and chief executive officer of Advanced Micro Devices. "This
 agreement by Novell and Microsoft helps customers bridge the gap between
 these platforms, giving them greater flexibility in doing what works best
 for them. This is a great example of vendors working together to resolve
 complexity so their customers don't have to."
     "This technology and business collaboration provides a model that
 allows Microsoft and Novell to develop new solutions to enable open source
 and proprietary software to work better together in a mixed-source
 environment," said Shane Robison, executive vice president and chief
 strategy and technology officer at HP. "We applaud these two companies for
 doing the hard work to build a bridge between Windows and Linux."
     "IBM encourages more industry endorsement of mixed-source solutions
 that promote open standards," said Steve Mills, senior vice president and
 group executive at IBM Software. "Microsoft support for interoperability
 with the industry-standard OpenDocument Format is most welcome. Open
 documents give customers choice and help unlock broad industry creativity,
 allowing access to a new generation of innovative applications. Our view
 continues to be that interoperability and choice are key values that
 customers demand and deserve."
     "We are pleased to see that Novell and Microsoft have come together to
 address customer needs with heterogeneous operating environments," said
 Kevin Kettler, CTO at Dell Inc. "As an industry leader in the IT market, we
 are excited to see the technology investments being made around
 virtualization and interoperability by both companies with this agreement."
     "SAP has been the first enterprise application vendor to run our apps
 on Linux, while we have more Windows-based deployments than any other
 platform," said Shai Agassi, president of Product and Technology at SAP.
 "Today's announcement means that customers can now choose their preferred
 operating system for each part of their SAP implementation with the
 confidence that the systems will have strong interoperability and be
 supported by SAP, Novell and Microsoft -- both companies being strong SAP
 partners."
     "One of the key challenges in government is IT interoperability," said
 Thomas Jarrett, secretary of the Department of Technology and CIO of the
 state of Delaware. "We commend Microsoft and Novell for their collaboration
 and their efforts to build bridges in the interoperability area, which will
 help government to better serve our customers, our business community and
 our citizens."
     Good for the Open Source Community
     Novell officials noted that one of their priorities in working toward
 the agreement with Microsoft was making sure the agreement made sense for
 the open source community. As part of today's agreement, Novell and
 Microsoft are announcing three important commitments. First, Microsoft will
 work with Novell and actively contribute to several open source software
 projects, including projects focused on Office file formats and Web
 services management. Second, Microsoft will not assert its patents against
 individual noncommercial open source developers. And third, Microsoft is
 promising not to assert its patents against individual contributors to
 OpenSUSE.org whose code is included in the SUSE Linux Enterprise platform,
 including SUSE Linux Enterprise Server and SUSE Linux Enterprise Desktop.
     "Today's announcement by Microsoft and Novell marks a significant
 milestone in the adoption of Linux," said Stuart Cohen, CEO of Open Source
 Development Labs. "By choosing a course of co-opetition, Microsoft
 acknowledges the critical role that open source plays today in an
 enterprise IT infrastructure. We appreciate the role Novell is playing to
 help bridge the gap between Microsoft and the open source community. We are
 glad to see these two companies collaborating to further diminish the legal
 threat posed to developers and customers by patent assertions. This is good
 for customer confidence in Linux, the open source community and the broader
 IT ecosystem."
     Additional Announcement Details
     Like many commercial transactions, the financial terms of the agreement
 are not being disclosed at this time.
     Under the technical collaboration agreement, the companies will create
 a joint research facility and pursue new software solutions for
 virtualization, management and document format compatibility. These are
 potentially huge markets -- IDC projects the overall market for virtual
 machine software revenue to be more than $1.8 billion by 2009, and the
 overall market for distributed system management software to be $10.2
 billion by 2010 -- and the companies believe their investment in
 interoperability will make their respective products more attractive to
 customers.
     Under the patent cooperation agreement, both companies will make
 upfront payments in exchange for a release from any potential liability for
 use of each other's patented intellectual property, with a net balancing
 payment from Microsoft to Novell reflecting the larger applicable volume of
 Microsoft's product shipments. Novell will also make running royalty
 payments based on a percentage of its revenues from open source products.
     Under the business collaboration agreement, the companies will pursue a
 variety of joint marketing activities to promote the adoption of the
 technologies they are collaborating on. In addition, Microsoft will
 purchase a quantity of coupons from Novell that entitle the recipient to a
 one-year subscription for maintenance and updates to SUSE Linux Enterprise
 Server. Microsoft will annually make available approximately 70,000 of
 these coupons to customers, with a mix of priority and standard support
 services. By providing its customers with these coupons, Microsoft is
 enabling companies to benefit from the use of the new software solutions
 developed through the collaborative research effort, as well as a version
 of Linux that is covered with respect to Microsoft's intellectual property
 rights.
     The parties are assessing the accounting treatment for the agreements
 and will provide information as required in the course of their filings
 with the SEC.
     For more information on SUSE Linux Enterprise from Novell, see
 http://www.novell.com/linux .
     For more information on Microsoft Windows, see
 http://www.microsoft.com/presspass.
     About Novell
     Novell, Inc. (Nasdaq:   NOVL) delivers Software for the Open
 Enterprise(TM). With more than 50,000 customers in 43 countries, Novell
 helps customers manage, simplify, secure and integrate their technology
 environments by leveraging best-of-breed, open standards-based software.
 With more than 20 years of experience, 4,700 employees, 5,000 partners and
 support centers around the world, Novell helps customers gain control over
 their IT operating environments while reducing costs. More information
 about Novell can be found at http://www.novell.com .
     About Microsoft
     Founded in 1975, Microsoft is the worldwide leader in software,
 services and solutions that help people and businesses realize their full
 potential.
     NOTE: Microsoft, Windows and Active Directory are either registered
 trademarks or trademarks of Microsoft Corp. in the United States and/or
 other countries.
     Novell and SUSE are registered trademarks and Software for the Open
 Enterprise is a trademark of Novell, Inc. in the United States and other
 countries. *Linux is a registered trademark of Linus Torvalds.
     The names of actual companies and products mentioned herein may be the
 trademarks of their respective owners.
 
 

SOURCE Microsoft Corp.
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