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Novell lambastes Microsoft pricing

The software maker blasts Microsoft's software licensing plan and business practices, hoping to lure frustrated customers to its own products and services.

Novell on Monday blasted Microsoft's controversial software licensing plan and business practices, hoping to lure frustrated customers to its own products and services.

In a full-page advertisement in The Wall Street Journal, Novell said that Microsoft's licensing initiative "only benefits their bottom line--and not yours." In a white paper linked to the advertisement, the company warned that Microsoft's licensing plan locked customers into expensive upgrades.

The Provo, Utah-based software maker is embarking on an offensive against Microsoft after announcing a new pricing structure of its own earlier this month. Novell said the revamped prices would make it cheaper for large Web sites to use Novell's software, such as applications for Web-based e-mail and authentication and login services.

Novell is trying to re-establish itself as a leader in the networking sector by focusing on Web services, in which data are accessed and manipulated over the Internet through a variety of devices rather than at a local PC. The company, once a leader in making software for building LANs (local area networks), enters a field crowded with competitors such as Sun Microsystems, Microsoft and IBM.

The strategy so far appears to be the enticement of corporate customers that are unhappy with Microsoft's controversial licensing structure.

Microsoft's plan, known as Licensing 6, has faced stiff resistance because it could as much as double volume-licensing fees, according to research firm Gartner. A number of the company's competitors have been tapping into this dissatisfaction as well as frustrations about the cost of Microsoft software, to lure customers to Linux-based systems and rival business software.

In August, Hewlett-Packard said it would boot a Microsoft software package from its Pavilion line of consumer PCs in favor of software from Corel, a less-expensive alternative. Several foreign governments, wary of depending too heavily on Microsoft, have also begun to experiment with Linux-based software.

Microsoft on Monday downplayed the significance of Novell's advertising campaign.

"I haven't seen the full-page ads they are taking out, so I can't really comment. But we aren't focused on PR efforts from our competitors. We want to make sure we stay focused on giving customers the tools and programs they need to help their businesses succeed," said Microsoft spokesman Dan Leach.

Separately on Monday, in a quarterly filing with the Securities and Exchange Commission, Novell took aim at Microsoft on the antitrust front. This comes as a federal judge prepares to make a decision about Microsoft's proposed settlement with the Justice Department and a related case in which several states are seeking harsher sanctions.

In the filing, Novell accused Microsoft of "exploiting its desktop operating monopoly in a way that is designed to extend its market power into the market for server operating systems, and to claim control of network and Web services such as authentication, using many of the same anticompetitive practices found by the United States District Court to be in violation of the nation's antitrust laws."

CNET's Joe Wilcox contributed to this report.