As a follow-up to Drue’s blog: Novell Going Private? I figured I ought to add my two cents worth. As many of you know, I joined Burton Group three short years ago after working at Novell for 20 years. I was involved in many of the Novell products, from NetWare to Zenworks to embedded eDirectory to storage to SLES 10.
Elliott Associates is most likely looking at Novell as a company where the parts are worth more than the whole; looking to sell off assets and intellectual property that will bring in more money than the company is currently worth as seen by Wall Street. So what does this mean for the SUSE business unit? Turning the clock back to late 2003, early 2004 when Novell acquired SUSE it is easy to see who has the most interest in the SUSE busienss. IBM helped Novell acquire SUSE as IBM was one of the largest investors in the SUSE company prior to the acquisition. Now the first thought is that “Oh, IBM would buy SUSE from Elliott then.” However, IBM only wants to keep open source Linux at arm’s length. They learned their lessons from their past experiences with UNIX (fragmented across hardware companies) and Microsoft Windows. IBM would encourage Elliott to spin SUSE back out as an independent company and maintain its involvement in SUSE’s directions.
Could SUSE stand on its own? Most likely yes. Novell actually did do a good job of improving its presence outside of Western Europe and slimmed the costs so that it is slightly profitable (but then slightly profitable equals huge success in the Open Source Software business world). SUSE’s presence in North America prior to the acquisition back in 2003 consisted of two sales people in San Francisco slapping shipping labels on boxes of SLES.
Are there other options for Novell’s SUSE business? Probably not. Any other companies, such as HP, Dell, Cisco, or Oracle would run the risk of alienating the market leader, Red Hat, that they depend upon to sell their up-the-stack value added products. Some may think Microsoft, but Microsoft would want what IBM wants, keep it at arm’s length through a partnership plus Microsoft has recently worked a partnership with Red Hat, and they too would want to see fierce competition in the Linux market between two distribution vendors.
Let’s hear what you would like to see happen with SUSE?
[Posted by: Richard Jones]