Microsoft has distributed nearly all of the US$240 million worth of SUSE Linux Enterprise Server subscription certificates that it purchased from Novell as part of a 2006 patent indemnification pact, the companies said.

Under that agreement, Novell received an upfront payment of $348 million from Microsoft. Microsoft agreed to pay Novell $240 million of that investment to purchase the subscription certificates to resell or distribute to its customers as a way to incentivize the use of SUSE Linux over a five-year period. A total of 475 customers have used an unspecified number of coupons, according to Microsoft. Customers redeem the coupons for a single- or multi-year subscription for upgrades, updates and technical support from Novell.

Part of the $348 million also went toward setting up the companies’ joint technology facility in Cambridge, Mass., which has focused its work on document interoperability, identity federation and virtualization techniques.

Microsoft allocated $60 million of its investment for marketing Linux and Windows virtualization solutions, and agreed to spend $34 million on marketing to promote combined Microsoft/Novell offerings.

There are now 20 to 30 full-time Microsoft and Novell employees working on the business end of the partnership, in addition to a team of full-time engineers, according to Josh Dorfman, director of global partner marketing at Novell.

Microsoft also launched an interoperability commitment to finance a support program, which began in August 2008. It’s committed to spending an additional $25 million, and up to $100 million, to purchase more Novell certificates to migrate customers that use other Linux distributions onto Novell’s SUSE Linux.

About David Worthington