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Novell’s Microsoft Deal A Winner

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As 2007 closed out, senior Novell executives took the opportunity to pat themselves on the back, saying that the company’s often-criticized interoperability deal with Microsoft is paying off nicely.

During Novell’s fiscal 2007, which ended on October 31, the company reported its deal with Microsoft brought in $355.6 million in revenues. The collaboration and licensing agreement was announced by the two companies at the beginning of Novell’s 2007 fiscal year, in early November 2006.

The deal has already begun to pay off in other areas as well, including its stated aim of bringing interoperability between Novell’s Linux offerings and Microsoft’s Windows.

“We started 2007 with the momentum of the Microsoft agreement …. [and] clearly positioned our company at the heart of [the] interoperability problem [between Windows and Linux],” Jeff Jaffe, Novell’s chief technical officer, said in a blog post on December 31. “So what happened? Bookings went through the roof as customers saw the value in this partnership. We brought new marquee customers to Linux,” he added.

That sentiment was echoed in another year-end blog post by a second Novell executive.

“According to Gartner, 67 percent of datacenters run some combination of Linux and Windows. Serving this growing market reality was the driving catalyst behind our interoperability partnership with Microsoft,” read the post by John Dragoon, Novell senior vice president and chief marketing officer.

Indeed, in early November, the two companies reported that they had signed up 30 new customers, including Costco Wholesale, Southwest Airlines and the City of Los Angeles.

“[The deal] probably lent a bit of safety and legitimacy to Novell’s Linux [offerings],” Matt Rosoff, legal affairs analyst at researcher Directions on Microsoft, told

Jaffe also hailed the addition of new partners that the deal helped bring into the circle.

“The partnership with Microsoft became the lever to build a broader Linux ecosystem. [Systems integrators] like Capgemini announced partnerships with us; we continued strong relationships with hardware OEMs such as IBM and HP; brought Dell into the Microsoft certificate program; and we strengthened ties with enterprise application vendors such as SAP. We used this credibility and our great technology to land desktop agreements with Lenovo, Dell, and Lotus,” he said.

Jaffe also cited Novell’s work to produce a Linux version of Microsoft’s Silverlight streaming media plug-in. Longer Novell’s focus on interoperability, joint management solutions, and virtualization will all sit the company in good stead with customers.

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