A slight decline in workgroup revenue was offset by growth in the three other areas of Novell's business as the software vendor enjoyed a modest rise in Q3 revenue.

Revenue for the three months to 31 July was up 3.4 per cent on the same period last year and stood at $245m (£135m). Operating income was $1m, compared to a loss of $10m during 2007's second quarter.

Novell reported revenue of $33m from its Open Platform Solutions division, $31m of which came from Linux Platform products, a rise of 30 per cent on last year. The Identity and Security Management division reported revenue of $37m, $34m of which came from Identity and Access management, up 22 per cent on Q3 2007.

The software firm's Systems and Resource Management arm also had an impressive quarter, with revenue up a quarter to $47m. However, the vendor's largest division, Workgroup, saw revenue drop one per cent to $92m. For the full fiscal year, the company predicted revenue would be between $940m and $970m which would mark a small increase on 2007's total of $932m.

Novell president Ron Hovsepian said: “We had another quarter of strong product revenue growth and expanding operating margins. Our transformation of the company positions us well to focus on sustained growth in 2009.”