Microsoft to pay Novell $308M for Linux deal

Microsoft Corp. will make a net payment of $308 million US to Novell Inc. as part of their five-year deal package in which Microsoft will market its competitor's software.

The world's largest software maker will pay Novell $240 million to give its customers access to support and maintenance for Novell's SUSE Linux Enterprise Server, Novell disclosed in a filing with the U.S. Securities Exchange Commission.

"The financial commitments Microsoft is making as part of this agreement are significant," Ron Hovsepian, president andchief executive officerof Novell, said in a statement on Tuesday.

The companiesannounced last week they would co-operate to make Windows and Novell's distribution of Linux interoperate more easily.

As part of a patent co-operation agreement, Microsoft will also give Novell an initial net payment of $108 million. Similarly, Novell will pay Microsoft at least $40 million over the duration of the deal so the maker of Windows will not sue Novell's customers for patent infringement.

As part of the deal, Microsoft also agreed that it will not enter a similar agreement with another Linux distributor. Red Hat Inc. leads the Linux enterprise market with its Red Hat Enterprise Linux software.