Novell has unveiled SuSE Linux Enterprise 10, the world's first major Linux distribution to support the Xen open source virtualisation technology.

Chief executive Ron Hovsepian described the product in an email to customers as a "major milestone" in the evolution of Linux, and the most important in Novell's history.

Novell has also changed the pricing structure for the application. Support subscriptions for the server software start at $349 per server including an unlimited number of virtual server images. Desktop Linux support is available at $50 per device per year.

Trailing behind Red Hat, Novell is the world's second largest commercial distributor of the Linux operating system.

The company last month replaced chief executive Jack Messman with Ron Hovsepian after frustration over the slow pace of Novell's transformation into an open source company.

Hovsepian has indicated that he will implement programmes to increase Linux sales. The company plans to encourage users to register their software, offering a better opportunity to pitch premium support services to current users.