Enterprise software vendor Novell has made it clear that its willing to accept bids from potential buyers, according to a report in the Wall Street Journal.

Novell already turned down a takeover bid in March that would have valued the company at $2 billion. At the time, Elliott Associates offered $5.75 per share, but after reviewing the offer, Novell's board came to the conclusion that the amount was "inadequate."

Despite Novell making itself available, it's not a foregone conclusion that the company will be sold. Novell also said it would review its options, which could include a stock repurchase program or a joint venture.

Elliot Associates, a New York-based hedge fund who also happens to be one of Novell's largest shareholders, wants to acquire the enterprise software maker and hopes its offer of $2 billion will be enough.

Novell now has a tough decision to make. On one hand, cash hasn't really been a problem for the software vendor, who reported $991 million in cash and equivalents at the end of January. But at the same time, Novell's revenues continue to trend backwards, down 6 percent in the most recent quarter compared to one year ago.

"Over the past several years, [Novell] has attempted to diversify away from its legacy division with a series of acquisitions and changes in strategic focus that have largely been unsuccessful. As a result, we believe the company's stock has meaningfully underperformed all relevant indices and peers," Elliot said in a statement. "With over 33 years of experience in investing in public and private companies and an extensive track record of successfully structuring and executing acquisitions in the technology space, we believe that Elliot is uniquely situated to deliver maximum value to the company's stockholders on an expedited basis."

The offer on the table is $5.75 per share in cash, which was more than $1 over the software maker's closing price earlier this week. When news of the offer spread, however, Novell's stock shot up by as much as 29 percent to over $6 per share.

Despite the growing popularity of open source software, there's still the issue of how to make money with it. No easy task, warns Miguel de Icaza, Vice President of Novell, who also heads up the firm's open source Mono project.

"If your livelihood depends on the product that you're selling, until you can figure how you're going to make money on that thing, I say, keep it proprietary," de Icaza said.

The VP went on to say that it's "incredibly difficult" making an open source business. His remarks were in response to an audience member at the Microsoft PDC (Professional Developers Conference), who raised the question of making money via open source. The issue of making money by selling support also came up.

"You need to take those steps carefully in my opinion," de Icaza said. "And support, by the way, is a horrible business. I want to be writing code, and I want to be paid to write code."

The VP did note that if you're a young developer without a lot of obligations, like a family and tuition, then it's far easier to consider doing open source projects.

During the Enterprise 2.0 conference in San Francisco on Wednesday, Novell unvieled its Novell Pulse, a real-time social and document collaboration platform for enterprises. And the kicker? It works seamlessly with Google Wave, Novell said.

"We designed Google Wave and its open federation protocol to help people collaborate and communicate more efficiently," said Lars Rasmussen, software engineering manager for Google Wave. "We are very excited to see Novell supporting the Google Wave Federation Protocol in their innovative Novell Pulse product."

Novell Pulse gives administrators to ability to provision sign-on and permissions to both keep data secure and make it possible for workers to collaborate on documents online in real-time. Perhaps more importantly, Novell Pulse is one of the first major Wave providers.

Novell said its Pulse platform will be available in the first half of 2010, with a beta scheduled for earlier in the year.