Novell executives said this week that it's seven-year-old Linux business has finally broken even -- making good on promises made a year ago. But it hasn't been an easy trek to begin making money off of Linux, and one factor may way against Novell's Linux business going forward...

Novell made some, but not a lot of money from Linux in its second fiscal quarter, which ended April 30, 2008. The real news though isn’t the Linux income itself–$29-million–it’s that Novell year-over-year growth in Linux is up a healthy 31%.

Okay, the headline is a bit dramatic. But the Sun-MySQL business combo makes The VAR Guy wonder: Will Novell wake up and start buying open source application providers … or is Novell doomed to repeat the exact same mistakes it made in the 1990s? Alas, Novell in 2008 looks a lot like Novell from a decade ago. That’s not good. Here’s why.

We recently showed how Microsoft is ’stealing’ from Novell’s GroupWise. Is this the company that Novell is serving in so many ways? Why? Has Novell forgotten the past so quickly? Examples from the news of Novell problems and loss of business to Microsoft.

Yes, Novell has a ways to go to catch up with Red Hat, but with yet another strong quarter it's becoming increasingly clear that the enterprise Linux market is a two-horse race again. Importantly, Novell is competing much more strongly without backup from Microsoft.

Novell Wednesday reported the net income loss for the third quarter of its 2007 fiscal year fell by nearly 50% compared to the same quarter last year, and the company said revenue was up nearly 3% to $243 million.

Novell's Linux business is keeping the company buoyant in trying economic times, the company's third-quarter earnings indicate. On Thursday, the software maker published its third-quarter results, which revealed that revenue from its Linux platform products had increased 22 percent, year-on-year, to US$38 million.

Novell's latest quarterly financial results reinforce the company's biggest challenge: While SUSE Linux sales continue to grow, the rest of the company -- even the security business -- faces falling revenue. Here's the scoop.

In its annual report for the fiscal year ended October 31, 2006, Novell expressed concerns over how the new version of the GPL may affect their business. Microsoft might stop distributing SUSE coupons if the GPL version 3 interferes with their agreement or puts Microsoft's patents at risk, ultimately causing Novell's business and operating results to be adversely affected.