HSBC has signed a deal with Novell and Microsoft that will allow the bank to standardise its Linux operations on Novell's SuSE Linux distribution.

The bank isn't replacing its Windows servers with Linux, but is aiming to simplify its existing deployment of thousands of Linux servers, according to Matthew O'Neill, the group head of distributed systems for HSBC's global IT operations.

In fact, HSBC is aiming to make its Linux deployments more like its Windows set-up, which it says is simpler and less costly than its Linux servers. "Some will be surprised to learn that our Windows environment has a lower total cost of ownership than our current Linux environment," O'Neill said. "Our decision to simplify our mixed-source environment with Microsoft and Novell will allow us to reduce the cost and complexity."

The bank has recently rolled out Active Directory across the entire company, and was aiming to bring its Linux deployment to a similar level of efficiency, O'Neill said. It is reducing the number of builds supported to one or two stacks and, for the longer term, is eyeing virtualisation systems that will allow Windows or Linux workloads to run on any server.

The deal is a direct result of Microsoft and Novell's November 2006 agreement to improve Linux-Windows interoperability; HSBC said it believes working with Novell will help its SuSE and Windows systems work together. The bank is paying Microsoft for three-year support subscriptions covering Suse Linux Enterprise Server, a type of support deal made possible by the November agreement.

More than 40,000 such support deals have been sold under the agreement since November, with clients including AIG Technologies, Detsche Bank, Credit Suisse and Wal-Mart, according to Novell and Microsoft.

The Microsoft-Novell agreement also included a controversial intellectual property component, which Microsoft hopes will eventually force open source companies to pay Microsoft for its intellectual property, according to chief executive Steve Ballmer.