Novell Set to Acquire SuSE --- What Does this mean to the Linux Community?
By Bill Claybrook
November 4, 2003
Novell announced today that it has entered into an agreement to acquire SuSE,
one of the two leading worldwide Linux distributors.
There was a time a couple of years ago that most folks thought that this type
of acquisition would not happen, and we thought that it would not be a good
thing. Most people thought that keeping the Linux distributors separated from
the hardware vendors and ISVs and other software companies was a good thing for
Linux. My feeling is that this is a good acquisition for Novell and maybe it
will turn out to be a good one for SuSE as well.
There are a number of questions to ponder about this acquisition:
- SuSE has been very aggressive in forming partnerships with hardware and
software vendors, some of which can be considered competition for Novell.
Novell will honor those contractual agreements for the duration, but what
will they do when the contracts expire? Will Novell treat SuSE Linux as its
own operating system just for its products, or will it continue to promote
and sell SuSE Linux to all interested parties?
- IBM has a lot at stake because SuSE Linux is supported on all of its
eServer platforms and SuSE has worked more closely with IBM than any of the
other Linux distributors. IBM intends to make a $50 million investment in
Novell stock and is negotiating extensions to the current agreements between
IBM and SuSE Linux.
- Is this good or bad for Red Hat? I believe that this is good for Red
Hat. Not only are they the largest Linux distributor in the world, but they
are the only major independent Linux distributor left. Red Hat has to be
able to take advantage of the acquisition in its marketing and strategy
messaging. Can they do it?
- With SuSE Linux being acquired by Novell, we now have to ask what will
Novell do with SuSE Linux in the long term? They did not do much with Unix.
Will it be allowed to continue to host products that could compete with
Novell's desktop and server side offerings? You do not have to ask that
question about Red Hat since they are independent.
- Will the acquisition of SuSE, make Novell's product offerings more
acceptable in the marketplace? Will it enhance Novell's position in the open
source community? This acquisition along with the Ximian acquisition makes
Novell a big player in the Linux community. The real question is how much
the two acquisitions will help Novell's bottom line. They could have worked
with Ximian and SuSE without acquiring them, but Novell needed to be seen as
a serious Linux player, hoping that that will make their products more
acceptable in the enterprise. Perhaps they will become more acceptable, but
I am leery.
Follow-up to Novell Acquisition of SuSE
By Bill Claybrook
November 10, 2003
Last Wednesday there was a second teleconference per the acquisition of SuSE
by Novell involving the management of the Linux business at Novell. Novell said
the following things:
What do I think?
- Novell will change nothing that SuSE is doing, except they will rethink
distributing their products on Red Hat after some time period.
- Novell will not have a Novell Linux product; they will keep the SuSE
- Novell will be a "regular" Linux distributor.
- Novell believes that Red Hat is difficult to bargain with.
- Novell has several hundred tech support staff trained on Linux (some
have been through LPI training).
- Novell will not try to turn every Linux licensee into a SuSE licensee
(Novell products run on other Linux platforms).
- Novell believes that Red Hat has made a mistake by dropping point
releases and by not having a free distribution (Red Hat does have the Fedora
project which is free Linux and Red Hat will have other free Linux-based
software available to open source users).
- Novell misinterpreted some of Red Hat's strategy involving moving
customers to Red Hat Enterprise Linux.
- I think that Red Hat is in an excellent position to gain market share
from SuSE if they get the correct messaging out as soon as possible. Red Hat
is an independent Linux distributor/product company not tied to a supplier
- Enterprises should be aware that Novell might not do some of the things
it says it will do or will not do.
- I do not believe that moving NetWare products to Linux will make them
immediately popular and revenue generating; one reason that users like Linux
is because there is a lot of open source software available that is low cost
or free. Ximian is a nice company but has not been generating much revenue
and SuSE is a $35M to $40M company. Novell will have to figure out how to
generate revenue from its acquisitions. The worldwide Novell service and
support organization should help.
- I think that Red Hat is doing the correct thing by focusing on the
enterprise server market. Providing software releases on a 12 or 18 month
schedule is much more useful to users and ISVs than releases every four or
six months. The past three years have shown that trying to use open source
as a business model is a road leading to nowhere.
- If Novell sticks by its word, then the acquisition should be good for
both Novell and SuSE.