Seattle-based Attachmate and Palo Alto, California-based VMware are looking to buy pieces of Novell, according to a report today in The Wall Street Journal. VMware is considering purchasing Novell's SUSE Linux operating system business, while Attachmate is investigating the assets of the remainder of the Waltham, Massachusetts company. A spokeswoman at Attachmate declined to comment on the report.

A potential acquisition of Novell could pose an interesting situation for Microsoft, which partnered with the Linux vendor on virtualization technologies in 2006. But VMware, led by former Microsoft executive Paul Maritz, inked a key partnership with Novell earlier this year which sparked strong negative reactions from the Microsoft brass.

Microsoft's Patrick O'Rourke wrote a blistering blog post at the time, suggesting that VMware's partnership with Novell was a "bad deal for customers."

"The folks in Palo Alto are further isolating themselves within the industry. Microsoft’s interop efforts have provided more choice and flexibility for customers, including our work with Novell," he wrote. "We’re seeing VMWare go down an alternate path.

Attachmate, a privately-held Seattle software company which specializes in file transfer, fraud detection and other products, is owned by Golden Gate Capital and Francisco Partners.

The Journal reports that the terms of the deals are still being discussed and could fall apart over how to divide the sales force and allocation of patents.

Founded in 1979 as a maker of computers and disc drives, Novell has morphed over the years into a leading Linux vendor and maker of network infrastructure software. The company posted revenue of $199 million during the fiscal third quarter, down from $216 million for the same period last year. Net income stood at $21 million.

The company finished the quarter with cash, cash equivalents and short-term investments of $1 billion.