Microsoft to pay Novell $348 million for their deal

Microsoft to pay Novell $348 million for their deal

Linux Company Novell has said Microsoft would be making two separate up-front payments totaling $348 million under the recently signed agreement between the two companies.

Initially, Microsoft would be paying Novell $240 million up front in subscription fees to allow them to use its Linux software.

An additional $108 million would be paid for use of patents. Novell revealed this information in the filing with the U.S. Securities and Exchange Commission.

Microsoft has also promised that they won’t sign a similar deal with any other Linux distributor for three years. This would give Novell a huge boost as they compete with rivals including Red Hat.

Novell is also going to pay Microsoft at least $40 million over five years for use of Microsoft’s patents. This would be largely based on its revenue from open-source products.