Shocking because the two companies in the past have been bitter rivals in the worldwide market for computer software. Just last week, the Supreme Court cleared the way for Novell to continue its lawsuit over a claim that Microsoft destroyed its market for the WordPerfect and QuattroPro programs in order to protect the software giant's Windows operating system from competition.

But the presence of Microsoft at Novell's BrainShare conference signals a rapidly shifting environment in the software industry. Microsoft is leaning away from the monolithic approach of its decades-old business model, and Novell is trying to position itself as the leader of interoperability, the term for making software from various sources work smoothly together on any computer, no matter the operating system or network.

Both are doing so because the market is demanding it, and some think the demands on Microsoft are forcing its hand whether it likes it or not.

At BrainShare, Novell's executive team delivered a disciplined message to the 5,500 attendees that revolved around its new mantra on information technology - "Making IT Work as One." The execs made it clear that it was not Novell taking on the task alone, but its "ecosystem," which includes its partner companies and customers.

"We don't have to invent everything," declared Jeff Jaffe, chief technology officer. "We don't even have to own everything."

It wasn't always this way.

Novell, now based in Waltham, Mass., was formed in Utah in 1979 and produced some of the first widely used software designed to enable computers to be connected in a network and to share files. But Microsoft began to challenge Novell in that market, and Novell executives believed they had to compete head-to-head with Microsoft as it offered a whole basket of products, from server networks to a personal computer operating system.

To compete, Novell bought WordPerfect Corp. in 1994, including its word processor, WordPerfect, once the dominant program of its kind. But admitting defeat in 1996, as many of Microsoft's products such as Word came to dominate the market, Novell sold WordPerfect and QuattroPro to Corel and went back to focusing on its core networking software, particularly as it interfaced with the Internet, which was becoming a major presence in computing.

Also in 1994, the open-source Linux operating system emerged. Unlike proprietary products such as Microsoft's Windows operating system, whose code is closely guarded, open-source software's basic codes are publicly available for improvement and additions by a community of developers.

Since it first emerged, Linux slowly has evolved to represent a challenge to Microsoft's Windows, which nevertheless still dominates the market.

In 2004, Novell made a strategic decision to buy SUSE Linux, the leading Linux vendor in Europe, which propelled Novell into the open-source community and fostered a mentality largely opposed to the proprietary environment.

Novell, after stumbling with a $26 million loss in its fiscal year 2007, emerged at this year's BrainShare with talking points showing that the company's business plan mimicking the collaboration of the open-source community in building Linux. Novell executives emphasized working relationships with partners and customers to produce products that meet market demands for software that works on different platforms and lowers costs.

"It's been dramatic," said Richard Bliss of GWAVA Technologies, a company based in Orem that produces an e-mail and calendar program to complement Novell's e-mail client. "It's been transformational. It is not the Novell that everyone knew."

The SUSE Linux purchase made Novell a leader in providing businesses with the Linux operating system. Although Linux is free, companies such as Novell provide their customers with the services and products to easily manage their systems and add components that meet the needs of a particular business or industry.

For its part, Microsoft bent to the Linux winds in November 2006, when it entered a partnership with Novell to make the products of both companies work together more smoothly, including on Linux.

Last year was Microsoft's first appearance at BrainShare and it was back again this year selling itself as partner of Novell's Linux-based projects.

Geoff Sullivan of Microsoft's intellectual property licensing group out of Seattle, one of a number of people manning Microsoft's booth, echoed Novell officials in saying that it was customer demand that brought Microsoft to the table with Novell.

"Our customers are the same customers, and our customers are running both Windows and Linux. That's really where the market's going," said Sullivan.

Customers want the companies to provide interoperability between the systems, he said, so data stored in one program can be easily transferred to another.

Bliss, however, sees the Microsoft presence as a sign its business model is breaking down. He contends that Microsoft is being squeezed from below by comparable but cheaper products from the Linux platform and from above by Google and its suite of free software available online.

"They're here because this is a huge threat and they'd better get on the train or get run over by it."

Kent Erickson, vice president and general manager of Novell's WorkGroup in Utah, said Microsoft is bending, but ever so slightly.

"I think Microsoft is starting to get some of this message about being more open," he said. "But they're often doing it as a reaction to pressures. When they've built up enough, they say, 'Let's give here but let's not give here.' They just embrace enough to get by a little longer."

And Pat Hume, senior vice president at SAP, a leading provider of business software and a Novell partner company, flatly declared, "Proprietary systems are a thing of the past."

tharvey@sltrib.com

Buzzwords

* Interoperability: Allowing a software program built for one operating system to run on another.

* Agility: Same as interoper- ability, but also allowing continued use and updating of older programs and computer systems without having to replace them.

* Ecosystem: A collaborative mix of Novell, its customers, partner companies and the open-source community.