What? free software didn't lead to Novell's downfall and you know it. Novell sat fat and happy with their over 80% market share while Microsoft slowly evolved NT into the great product it is today.
Novell arrogantly kept using IPX while the world went IP. Sure, you could use IP for Netware but who wanted to have a DSS farm? By the time NCP talked natively over IP, it was way too late.
Let's not even talk about multi processor support. Novell did Novell in.
Novell hurt itself, but Netware is still bringing in good money, much more than Suse Linux is bringing in for them. Shouldn't be surprising, since the stated goal of open source is to "commoditize" the O/S market, and push proprietary vendors "up the stack". Novell better move up the stack unless they think they can compete on O/S terms with Linux, like Unix and Windows will continue to do.