Microsoft chief executive Steve Ballmer made it clearer than ever at a meeting with financial analysts that the company's recent deal with Novell is primarily about bringing the Linux threat to heel.

"I would not anticipate that we make a huge additional revenue stream from our Novell deal, but I do think it clearly establishes that open source is not free," Ballmer said. (See a transcript here.)

His remarks came the same week as the company announced more of the technical details of the deal. In contrast to that announcement, which focused on areas such as virtualisation, web services standards and an interoperability lab, Ballmer said the value of the deal to Microsoft lay in its potential to set a precedent that could force Linux distributors and users to pay Microsoft for its intellectual property.

The problem, Ballmer said, continues to be that Linux costs next to nothing. "Having a competitor out there who at least nominally looks to be close to free is always a challenge," he said.

He said the Novell deal was a "very important" step towards dealing with the price threat: namely, that Microsoft could begin to bring its patent arsenal to bear on Linux companies. "It demonstrated clearly the value of intellectual property, even in the open source world," Ballmer said.

"Open source will have to respect intellectual property rights of others just as any other competitor will," he said.

His remarks risk reopening the rift between Novell and Microsoft over the way the deal should be interpreted. In late November, three weeks after the deal was announced, Ballmer said that Linux companies could be infringing on Microsoft's patents.

Novell begged to differ, and the solution was a statement from Microsoft explaining that the companies "agreed to disagree on whether certain open source offerings infringe on Microsoft patents and whether certain Microsoft offerings infringe Novell patents".