The agreement sees Armonk, New York-based IBM shipping and preloading Novell’s SuSE Linux Enterprise Server across its entire server line, including the i- and pSeries Power processor-based servers, zSeries mainframes and xSeries Intel Corp-based servers, as well as the eServer BladeCenter system.
The deal appears to go one step further than Red Hat’s agreement with IBM, which enables Red Hat Enterprise Linux to be ordered and shipped with IBM’s 64-bit Power processor-based hardware, and was expected given IBM’s recent $50m investment in Waltham, Massachusetts-based Novell.
That investment coincided with Novell’s acquisition of SuSE and was designed to ensure that SuSE’s previous support for IBM’s processors continued. That investment has now closed with IBM acquiring Novell Series B shares that are convertible to 8 million shares of Novell common stock at $6.25 per share.
Due to an increase in Novell’s common stock price since the deal was announced in November 2003, Novell said it expects to record a one-time non-cash dividend of $26m attributable to the value of the stock’s conversion feature. Novell said this dividend is unlikely to have an impact on its net income for the current quarter ending April 30, 2004, but would reduce earnings per share by about $0.07.
This article is based on material originally published by ComputerWire
