Three years ago this week, ailing software maker Novell paid $210 million to acquire Suse, a German version of the free operating system called Linux. Novell hoped that by embracing Linux, an alternative to the decidedly unfree Windows operating system from Microsoft, it could revive its dying software business.

On Thursday, Novell effectively conceded that this effort has failed. On stage with Microsoft in San Francisco, Novell announced that the two companies would cooperate to make the Windows operating system and Linux work well together. More significantly, Microsoft will resell Novell's version of Linux, and Novell will start paying royalties to Microsoft in exchange for Microsoft's pledge not to enforce patent claims against Novell and its customers.