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Sun Pondering Buying Novell

Posted by CowboyNeal on

Krafty Koder writes "ZDNet are reporting that Sun are considering purchasing Novell and thus gain SUSE Linux. 'With our balance sheet, we're considering all our options,' Sun chief operating officer Jonathan Schwartz said in an interview on Sunday regarding the possibility of acquiring Novell. 'What would owning the operating system on which IBM is dependent be worth? History would suggest we look to Microsoft for comparisons,' he said."

5 of 400 comments (clear)

  1. They're in for an unpleasant surprise... by rsidd · · Score: 3, Informative

    if they think this purchase will let them "own" linux

  2. SUNW: 2 billion in cash / NOVL : 3 billion cap by Anonymous Coward · · Score: 4, Informative

    Sun has 2 billion in cash and Novell is priced at 3 billion. Looks risky burning your cash reserves. I'm not sure Novell provides the "synergy" that could sparc a Sun revival.

  3. Re:"Owning the operating system"? by AKAImBatman · · Score: 3, Informative

    Yep, remember these are the same guys that helped fund SCO's FUD... and "saw problems" with "IP" aspects of Linux...

    No, they didn't "see" any problems with Linux IP. They said they had complete, perpetual, and air-tight licenses for Unix that would allow them to easily indemnify their customers against any attack from "Unix IP holders". Sun long ago made sure to cover their bases on Unix IP, so SCO would literally not be able to get past a preliminary hearing if they were to sue Sun.

    --
    Javascript + Nintendo DSi = DSiCade
  4. Re:Doesn't anyone proofread these submissions? by pknoll · · Score: 4, Informative
    It should read as "ZDNet is" and "Sun is".

    Unless you're in the U.K., where the convention is as written. They tend to refer to companies as collective nouns.

    The U.S. (and its standards of English) are not the world.

  5. Bad move for Sun by grimover · · Score: 3, Informative

    In addition to slashdotters thinking its a bad idea, the Wall Street Journal Online has a follow-up report Novell Acquisition Would Be Bad Move for Sun, Analyst Says

    Among the reasons the analyst lists (in case you don't want to subscribe to the WSJ Online):

    1. Sun buying Novell would eliminate Novell's (and SuSe's) hardware neutrality, upseting the interests of major Novell partners/shareholders IBM and HP/Compaq.
    2. A hostile takeover of Novell would seriously drain Sun's cash per share, removing a major price support for Sun's stock.
    3. After acquisition it is likely that Sun's hardware competitors (e.g. IBM, HP) would withdraw support for SuSe Linux. This would be bad for SuSe and bad for Linux in general, since part of IBM's and HP's investment and partnerships with SuSe are intended to prevent Red Hat from dominating Enterprise Linux.

      I would add:

    4. Spending a substantial portion of your company's cash reserves to buy a technology and intellectual property portfolio in order to suppress it (instead of exploiting it for profit) is a suicidal strategy. I don't think shareholders on either side would vote for that.
    5. If analyst consensus builds against this purchase, then its even more suicidal for Sun, since their stock would fall off a cliff (again) if they attempted it.

    I should also mention Novell recently raised $600 million in a corporate debt offering, about $125 million of which was for a stock buyback (not sure how that might affect their takeover prospects). The rest was for future acquisitions, the rumor on Wall Street is that the inside favorite for a future Novell acquisition is MySQL AB.

    That would be a great acquisition, adding MySQL to their software stack would complement both Novell's Mono and J2EE application server offerings. My personal favorite other acquisition would be Zend, giving Novell a LAMP application server software stack!