Jason Matusow has a detailed post on his blog about the announcement.

Here's the announcement

I'm still reading through the details but it definitely looks like a win/win for both companies but more importantly customers. Most of the early commentary on tech blogs interprets this as a defensive move by Microsoft or a response to the Oracle announcement despite the fact that the deal with Novell has been in discussion for months. I view it more as a shrewd move on our part. I do a lot of projects at large customers and government agencies and one of the biggest barriers in introducing Microsoft technology in the data center is the interoperability issue. With this collaboration in place and if the anticipated interoperability gains are realized, there will be almost no customer where Microsoft doesn't have a valid approach for introducing our technology. Most Unix shops are migrating to Linux. Without a Linux story we have a hard time getting in the door of the data center of the hard core Unix shops. Now those doors should open at least a little bit.

The other primary driver in my view is virtualization. The virtualization field is wide open right now. I think the market has mainly stabilized in terms of Linux vs. Microsoft. Linux has essentially no traction on the desktop but has great traction in taking share from Unix on the server. Microsoft is still slowly increasing server share so this was not a defensive move at the OS level. If you take into account virtualization however, this deal effectively hedges and major impact that could have.

Anyway, very interesting stuff! I already have several messages in my inbox from various execs outlining their point of view.