The change is being viewed by analysts as a strategy designed to expand Dell's server market. Meantime by pairing with Dell, Novell, which lags far behind Red Hat in Linux market share, gains instant credibility with software developers, and wider access to markets in North America.

Novell bought the German-based Linux developer for $210 million last year. Unlike Red Hat which has a strong customer and supply backbone in the US and Canada, most of SUSE's customers are in Germany and the European Union. Company officials have been actively looking for ways to crack the market Red Hat currently dominates. With Dell, the doors to the US market have been opened.

It may seem odd that Dell should decide to enter a relationship with Novell, considering that Red Hat owns roughly 80 percent of the Linux market share in the US, according to Gartner's estimates. However down the road; Red Hat's dominance will fall to about 60 percent, according to Gartner. By partnering with Novell now, Dell will be well positioned in the Linux marketplace.

As part of the deal, Dell will be the primary contact for all PowerEdge/SUSE support. Dell's single-processor server, model 1850, and its dual-processor servers, 2800 and 2850, will offer SUSE Enterprise Server 9, as part of Dell's PowerEdge package.

The agreement does not include provision for embedded SUSE Linux running on Dell servers. Officials at both companies have said that customers prefer 'drop-in-the-box' delivery of OS shipments, rather than preinstalled machines. Dell will continue to offer Red Hat Linux as well, and was quick to point out that its agreement with Novell in no way affects its dealings with Red Hat.

"We've had a very long-standing relationship with Novell," explained Pete Morowski, Dell vice president of software, "So we look at this as an extension of our relationship. Our relationship with Red Hat continues to be strong as ever and we will continue to offer Red Hat."

Stacey Quandt, senior business analyst at the Robert Frances Group, offered this industry perspective: "Dell does not do anything unless there is demand; they're very cautious of how they launch products. So it demonstrates that SUSE is a viable alternative to Red Hat."