Microsoft is spending less than $500m on its ground-breaking deal with Novell to promote SuSE Linux and shut Red Hat out of Windows accounts.

Microsoft is to pay Novell $240m for 350,000 subscription coupons of SUSE Linux Enterprise Server (SLES, to be released in annual batches of 70,000, according to a Novell regulatory filing. Coupons can be redeemed from Novell for single- or multi-year subscriptions, upgrades and technical support. To refresh your memory, $240m is roughly a quarter's revenue for Novell.

Microsoft will spend another $94m on sales and marketing of Windows and Linux during the five-year lifetime of the companies' deal. Also, a patent co-operation agreement will see Microsoft make an up-front payment of $108m to Novell. In return Novell will pay Microsoft a minimum of $40m, based on a percentage of Novell's Open Platform Solutions and Open Enterprise Server revenues

Novell has been stung by criticism of the patent provisions of the deal and has published an FAQ (http://www.novell.com/linux/microsoft/faq_opensource.html) to tackle "a flood" of questions. Reaction has ranged from uncertainty to accusations that Novell is selling out by effectively accepting the concept of closed-source patents in open source, and so giving Microsoft a legal toehold against other open source and Linux vendors.

Novell says that while Microsoft would not sue Novell customers Novell itself has received no such covenant or a patent license from Microsoft - a quid pro quo that means it doesn't flout the GPL (the GNU General Public License (http://www.gnu.org/licenses/gpl.html)).

According to Novell, its relationship with Microsoft is not an admission that Novell's products contain any Microsoft patents; and Novell will not include Microsoft patents in future products. ®

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