If businesses insist on using Linux alongside Windows, Microsoft has decided it prefers that it be Suse Linux -- and not enterprise server market leader Red Hat. To persuade others to that point of view, Microsoft inked a patent-licensing agreement with Novell promising not to sue users of Suse Linux for patent infringement. And it left that hammer hovering over other Linux users. "This covenant does not apply to any other form of Linux than Suse Linux," Microsoft CEO Steve Ballmer said last week in announcing the Novell pact. "If your firm wants to use one of the others, you will have all the compliance and intellectual property issues as before."

Ballmer is making new friends

Ballmer and Novell CEO Ron Hovsepian said the agreement lets the two companies work on getting Windows and Linux working together more directly. They will establish a joint research facility to produce a virtualization offering that lets Windows applications run under Suse, and vice versa.

Money's also changing hands. Microsoft has purchased 70,000 Suse support coupons from Novell, which it will offer to Microsoft customers as an incentive to use Suse instead of Red Hat and other distributions. Neither company put a price on the coupons. Microsoft won't be any less dogged in selling Windows, but the coupons give it something to give companies determined to run Linux--which in most companies comes down to a choice between Red Hat or Novell's Suse. Novell will pay Microsoft royalties on its future Suse sales if jointly developed, interoperability code is part of the sale. "Microsoft intellectual property is being respected, and Microsoft will be appropriately compensated," Ballmer said.

GUESS THIS LINUX THING'S FOR REAL
For Microsoft, this is the latest big admission of Linux's business influence. In April, it pledged to support Linux virtual machines on its Virtual Server, and it has unveiled free virtual machine additions for Red Hat Linux and Suse Linux. But it also shows one way in which Novell and Red Hat are different. Novell owns patent rights that it can exchange with Microsoft as part of their technical collaboration. A purely open source company such as Red Hat, without proprietary code or patents, can't enter a patent cross-licensing agreement, says David Kaefer, Microsoft's general manager of intellectual property and licensing.

The city of Seattle's Web site runs on 30 Windows servers and relies on many Microsoft .Net technologies, says Bill Schrier, Seattle's CTO. But he'd like to run Linux-based applications, such as blogging and e-commerce personalization software. "We need ID management between Windows Active Directory and Suse's eDirectory," Schrier says. "The two don't interoperate." But the patent threats have been a real worry: "That's one of the reasons we haven't deployed a lot of Linux."

Red Hat's finding itself with fewer friends. In late October, Oracle CEO Larry Ellison said Oracle would sell lower-cost support for Red Hat, including releasing its own bug fixes, in a direct challenge to Red Hat's business. Even IBM, which steers a middle course between Suse and Red Hat Linux, endorsed the Novell-Microsoft pact in Microsoft's press release, with senior VP for software Steve Mills noting that Microsoft and Novell will work to make Microsoft's Open XML document format translate better into the open source code OpenDocument format. The software industry needs more "mixed-source solutions" of open source code and proprietary code, he said in a statement. Buyers also want more choices. And when it comes to Linux, the choices are certainly getting more interesting.