Source: http://itnewsbulletin.blogspot.com/2006/11/microsoft-novell-reach-agreement-on.html Once bitter rivals, Microsoft Corp. and Novell Inc. have entered into an agreement to allow open-source Linux software to work with Microsoft's Windows software. After years of trying to crush open-source rivals, Microsoft said it will provide support and technology to allow Linux to work on Windows while agreeing not to assert patent rights over technology that may be included in Suse Linux, a version of the operating system sold by Novell. In its second major partnership with an open-source software company this week, Microsoft sought to assure a growing number of Linux users, especially in the computer server market, that the two technologies can work together. "We appreciate that open-source software plays an important role in our industry and it's here to stay," said Brad Smith, Microsoft's general counsel. "This will enable a new level of cooperation between open source and proprietary software." Unlike proprietary software, open-source software lets developers share code and add functions. Users pay for custom features, maintenance and technical support. Linux is the most popular variant of open-source software. The Microsoft partnership gives Novell an advantage over open-source rivals and Linux leader Red Hat Inc. since corporate customers increasingly run both Windows and Linux machines. The agreement comes two days after Microsoft struck a long-term partnership with open-source software maker Zend. News of the Novell partnership sent Novell's shares up 16% while pushing Red Hat stock down 2%. Microsoft shares were mostly unchanged. "Linux has grown up," said Katherine Egbert, an analyst with Jefferies & Co. who covers Red Hat and Novell. "This is a mainstream technology that major technology vendors are struggling to find a way to support." Microsoft is not the only software giant eyeing Linux. Last week Oracle Corp. made its boldest move yet into Linux software, offering cut-price technical support in a surprise bid to wrest away Red Hat customers. The Microsoft-Novell pact, which will run until at least 2012, is a broad set of business and technological agreements to make Novell and Microsoft products work better together, the two companies said. The agreement focuses on three main technological areas: virtualization to allow Linux to run on Windows machines and vice versa, Web services to help customers with a mix of Linux and Windows products, and document format compatibility to allow users to share documents. "Customers continually ask us how they can consolidate servers with multiple operating systems through virtualization," said Jeff Jaffe, executive vice president and chief technology officer at Novell. According to industry data from Gartner, 21% of worldwide server shipments in 2005 run Linux versus 67% of servers running Windows. Linux has continued to gain market share in recent years. More than a decade ago, Novell assembled the pieces of a full-scale Microsoft competitor by buying database software from Borland and WordPerfect, an alternative to Microsoft Word. It bought rights to a rival to Microsoft's Disk Operating System (DOS) and a version of Unix, a predecessor to Linux, seeking to fuse them with Novell's own operating system. But the strategy failed amid surging demand for Windows, leading Novell to file an antitrust lawsuit against Microsoft. Two years ago Microsoft paid $536 million to Novell to settle part of those claims.