Novell's Linux business spikes since Microsoft deal

Company says it's continuing to see above-average growth

Novell's Linux business has soared 243 percent since last November when the company signed its controversial deal with Microsoft.

"The affect on sales year over year, for Novell's first three quarters of our fiscal year, which ends Oct. 31 -- our Linux business was up 243 percent year over year," said Justin Steinman, director of marketing at Novell, who, along with executives from both companies, spoke at a program hosted by the Massachusetts Technology Leadership Council.

And, that growth doesn't seem to be short-lived.

"We're continuing to see above market growth year [over] year and that clearly has resulted in the 243 percent Justin alluded to," said Susan Heystee, general manager, Global Strategic Alliance, at Novell.

Last November, the two companies struck a collaboration deal under which Microsoft is supporting SUSE Linux on systems that run Windows to make it easier for users to incorporate both operating systems. As part of the deal, Microsoft is offering sales support for SUSE Linux and will also co-develop technologies with Novell.

Steinman said part of its growth was directly related to the Microsoft deal, adding that Novell has billed more than US$100 million in business through its Microsoft relationship. He added that the growth was also due to the halo effect of the arrangement.

"When we're out there competing with Red Hat, [our salespeople] are saying, 'Our Linux is recommended by Microsoft,' and customers that already have a Windows investment say it seems to make sense to pick the Linux that works with Windows."

Microsoft, however, wasn't quite ready to declare financial victory.

Peter Rodriques, director of intellectual property and Licensing at Microsoft, said he wasn't prepared to say that Microsoft has generated more revenue than it would have without the agreement with Novell. But he said he was declaring victory in terms of the partnership in general.

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Linda Rosencrance

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