Novell acquired by Attachmate, sells some patents to Microsoft

When Novell turned down an offer to be acquired by hedge fund Elliot Associates earlier this year, it seemed like the Linux vendor was looking for a better deal. The company announced today that it has accepted an offer to be acquired for $2.2 billion by software company Attachmate. Parallel to the acquisition, Novell has sold over 800 patents for $450 million to a consortium of technology companies organized by Microsoft.

Novell entered the Linux market in 2003 by acquiring Ximian and SuSE, commercial Linux vendors that were rising to prominence at the time. Novell used the technology obtained through those acquisitions to build enterprise Linux desktop and server platforms that the company brought to market under a unified SUSE brand. Novell opened the source code of some core SUSE features, such as the YaST configuration system, and attempted to foster an independent open source development community around its software.

Although Novell made a considerable investment to build a strong Linux product portfolio, the company faced serious difficulties. It couldn’t catch up with Red Hat’s substantial lead in the enterprise server market and was never able to build a credible business around its desktop products. Novell’s desktop strategy was plagued by a general lack of direction and suffered from the friction between the GNOME-centric Ximian and KDE-centric SUSE developers.

There are some concerns that the case against Linux could be resurrected if a hostile third party such as Microsoft were to obtain the UNIX intellectual property. Novell’s sale today of over 800 patents to a Microsoft-led coalition for $450 million alongside the Attachmate deal raises questions about whether we could see SCO-like litigation resurrected in the immediate future. It’s worth noting that no evidence of actual infringement was ever found during SCO’s misdirected crusade against Linux. In fact, internal memos from SCO that were uncovered during the court proceedings reveal that the company’s own source code audits found no infringement.

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