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Microsoft Cuts Deal With Novell To Support Suse Linux: Page 2 of 5

Microsoft and Novell were once bitter rivals. Ray Noorda, the CEO who built Novell, spent more than $1 billion to acquire companies to help compete against Microsoft in operating systems and office applications.

Microsoft still considers Linux and open source one of its main threats. Ballmer said in May that competing with Linux is one of the company's top priorities.

But the two companies were motivated to cut a deal because their joint customers demanded better interoperability between the platforms in virtualization environments, the executives said.

Virtualization allows IT departments to run multiple operating systems and their applications on the same computer server or PC. Virtualization can lead to higher efficiency in the use of hardware, but can also introduce management challenges.

While the companies agreed to work together on building bridges between their platforms, both plan to push their products first, offering the other as an alternative if the customer asks.