It seems the company is receiving an up-front payment of $348 million from Microsoft, for SLES (SUSE Linux Enterprise Server) subscription "certificates" and for patent cross-licensing.
In Novells Form 8-K submission to the SEC (Securities and Exchange Commission), Entry into a Material Definitive Agreement, the company states that "Under the Business Collaboration Agreement, which expires January 1, 2012, Novell and Microsoft will market a combined offering.
"The combined offering will consist of SUSE Linux Enterprise Server (SLES) and a subscription for SLES support along with Microsoft Windows Server, Microsoft Virtual Server and Microsoft Viridian that will be offered to customers desiring to deploy Linux and Windows in a virtualized setting."
Virtualization has become a hot topic in IT circles over the last few years. IDC predicts that the total market for virtual machine software will be $1.8 billion by 2009.
For this package, Microsoft will make an up-front payment to Novell of $240 million for SLES subscription "certificates" that Microsoft can use, resell or distribute over the term of the agreement. These certificates, in turn, can be used to redeem single or multi-year subscriptions for SLES support from Novell.
John Pallatto contributed additional reporting to this story.