Linux to work with Windows

NEW YORK (CNNMoney.com) -- Once-bitter software rivals Microsoft and Novell came together Thursday to make peace in the operating system world.

The two companies announced a partnership that will allow Suse Linux, the open-source operating system distributed by Novell, to work with Microsoft's (Charts) ubiquitous Windows software.

"While we're going to compete, we're going to collaborate in the right way," Microsoft CEO Steve Ballmer said about the pact with long-time rival Novell.

The announcement was made at a news conference in San Francisco that was monitored via Webcast in New York.

The arrangement calls for technical collaboration as well as for the two companies to team up in sales and marketing.

Microsoft CEO Steve Ballmer said the agreements aim to bridge the divide between open-source and proprietary source software, and will enhance interoperability between the two systems.

As part of the partnership, Microsoft won't claim patent rights over technology that might be included in Suse Linux, addressing a concern voiced by several customers, the companies said.

Microsoft also said it will not assert patent infringement claims against individual, non-commercial open-source developers.

Ballmer acknowledged that more customers are running mixed systems, but made clear Microsoft isn't getting into the Linux code business.

"While we're going to compete, we're going to collaborate in the right way," he said.

Novell bought Suse Linux in 2003, marking its foray into the open-source market that has long battled chief rival Windows.

Last week Microsoft rival Oracle (Charts) gave Linux a big push, saying it would provide support for Red Hat's Linux customers. Red Hat is the largest distributor of Linux.

Linux has been gaining ground, especially among corporate customers. Hardware vendors such as IBM (Charts), HP (Charts) and Dell (Charts) all sell servers that run Linux.

Shares of Novell (Charts) surged 16 percent in regular trading on speculation of the partnership. Shares of open-source Linux developer Red Hat (Charts) lost 2 percent in regular-hours trading.

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