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Novell's Race Against Time
DiamondGeezer writes "The Guardian newspaper in the UK reports in 'It's a race against time' that Novell is on a knife-edge financially and competitively, having placed a huge one-way bet in the success of its Linux strategy. But there's no guarantee of success: its revenue from Linux licensing is puny, and it faces a crowded market of Linux distros. Novell may be getting some positive press now that it's gone full tilt for Linux, but let's remember the reasons why: because of mis-steps of its previous management (especially the disastrous acquisition of WordPerfect in the mid 1990s) and its failure to grow its Netware business (with more than a little help from Microsoft), it's now having to re-engineer itself for Linux."
Actually, Novell has moved out of Utah. They do still maintain facilities in Utah, but their headquarters moved to Waltham, Mass., in January 2004. And there's more than one technology company in Utah; not as many as in Silicon Valley, but if you want to live & work in Utah, you shouldn't have too much trouble doing so.
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We have a fairly sizeable eDirectory tree of about 100,000 users. We have hundreds of Netware servers. We use Identity Manager(dirxml) extensively. Our entire LDAP authentication runs on eDirectory. I know many other VERY large companies such as ours where Novell plays a very important role and where eDirectory is the central authentication/idenitity scheme. Sure we have some Windows application servers---who doesnt. But I always get amazed at those who predict the death of Novell---because usually those are the same people who have never used any Novell products in their life. Believe me Novell is dominate in every Fortune 100 company out there. They are going nowhere.
Novel vs Redhat. In a corporate environment with directory services novel wins hands down. Novel (suse) also has a much much better QA procedure on its Enterprise linux products. I have not seen to date one issue to date (yet) that has caused systems to go down after patches have been applied. However with redhat we see it all the time.
For anyone serious about an enterprise level linux novel is the only real choice.
Firstly, this fails to take into account the recent Microsoft settlement which brought $536 million into Novell, plus the additional cash they have on hand. They aren't suddenly going into bankruptcy.
Second:
"it is getting excited about the version of KDE that will accompany SuSE Linux 10 next year. This is based on Mono, another Novell takeover, which aims to provide a development environment that will run Java and Microsoft.net on Linux"
KDE has nothing to do with Mono. The author probably meant Ximian Gnome, but that doesn't even make the statement true, and wtf does Mono have to do with Java?
SuSE + Ximian + Mono + Novell = Good prospects in my book. Granted Novell management has a long history of screwing things up, but this product line looks pretty promising. In fact, full disclosure I put my money where my mouth is and purchased some amount of Novell stock.
The more you know, the less you understand.
After doing some research, I discovered that there is some good news for Novell:
Europe's Largest Railway Selects Novell's SUSE LINUX for Large Scale Server Migration
However, there is also some bad news:
Novell's Credibility 'Beginning To Wane'
My FreeBSD 4.x boxes are over 1000+ days of uptime now with real load with real business logic running on them.
Novell's added value is in the products that run on top of Linux. Few people realize how powerful Novell's suite is. When it comes to managing a large scale PC network, there are few tools finer than eDirectory and ZENWorks.
A few years ago I worked on a worldwide directory services project, and the suits brought the notorious Microsoft shill Gartner onboard. Only one of the partner companies involved (out of almost 40) was a Novell shop. What platform did they suggest? eDirectory. After using AD, eDirectory and OpenLDAP in varying implementations I can vouch for the power and effectiveness of the Novell tools.
ZENworks is a best of breed desktop management suite. Throw than on top of Novell's file and print tools. Add in the clustering support. The web based management tools. The handful of open source tools(Apache, PHP, MySQL, rsync) that now come with Netware. Taken together it's a very powerful, very valuable package. I can support more PC's using less staff with Netware than any other OS.
Now what sucks about Netware? Lack of developers. Every time I sit in a meeting, some asshole wants me to add yet another W2K3/SQL box for their product. Given Netware's market share I can't blame them. No-one is ever going to write another NLM.
OES on SuSE changes everything. You get all of the Novell tools, all of the open source tools, a worldwide developer base, plus the goodies from Ximian. It's a huge win. Not only do I get Linux, from the servers to the desktop, but I get the tools to manage every box.
It's not too late. The better tools can still win, but only if people knee deep in Microsoft solutions will bother looking at them.
Redhat is fine for servers (although I've had my share of problems with RHAS3, mainly NFS), but Novell offers something that RH has NEVER offered: out of the box Flash, Mpeg, Java, Real (yeah, I know - they're supposedly evil). These things are actually important for a desktop users. True, you could go out on your own and find all thiese things and install them yourself, but for a corporate "Give me a decent out-of-the-box desktop setup", Novell does nicely. And in my experience, Wireless as well as ACPI just work with MANY more laptops than RH.
I think this statement would be more accurate if you dated it 2000.
Novell have bled on the top line (actual cash vs expense) since 2k (and probably before, but I only have figures back to 2k). 2k4 was a small turnaound with 65m in operating profit.
Having said that, they still have a small war chest, with 1.5b cash+equivalents, and short term liabilities of 700K. So they are solvent and good to go for a little while longer. Long term debt is not too high, but I can't find any info on its due dates.
Their real danger now is being lost in the crowd.
The large majority of the company's engineering is still in Utah, despite the addition of a couple hundred Linux engineers outside of Utah in the two acquisitions. The new HQ (in Waltham, MA) is more for the corporate types.
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For Novell, I think the biggest challenge is to keep revenue stable while customers transition from NetWare to Linux, without losing too many customers to Windows in the process.
NetWare is still pretty expensive on the server. A 50-user copy is about $150 a seat on CDW retail ($7,500), about $50 a seat under a licensing agreement ($2,500).
SuSE is $999 per server with no client licenses fees.
Figuring NetWare to be about 50% of Novell's one billion in revenue, that means Novell would stand to lose more that 25% of their total revenue assuming everyone switched to SuSE. Novell might make this up with SuSE/Ximian desktop revenue, but I see large amounts of revenue from Linux on the desktop as being a long time in the making.
The estimates for SuSE revenue for 2003 were for about $40 million in revenue. As near as I can tell Ximan never really made any money to speak of.
So, if I haven't bored anyone to death yet, Novell NetWare is a $500 million revenue stream, SuSE is a $40 million revenue stream. Novell needs to very carefully transition from NetWare to SuSE if they want to keep revenue even. They can also grow by taking customers from Microsoft or Red Hat. But, it appears to me that Novell will have to shrink about 25% in size in order to remain profitable in the short term. Red Hat, with a more mature Linux strategy, only made $100 million in the last four quarters.
None of this is a bad thing, and I wish Novell the best of luck. I used to work there, and I still have friends there. Just doing the math though it seems like they will need to get smaller before they get bigger again.
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Funny you should mention this about being the ultimate mailserver distro.
I just set up a mailserver for an ISP up in Idaho using SuSE 9.2. Spamassassin and Postfix installed without a problem, but when I went to install courier-imap and sasl2, I discovered that they didn't include mysql or postrgres support. Luckily it wasn't hard to download the SRPMS and compile them myslef, but it was still a bit annoying.
I sent them an e-mail requesting that they build the rpms to support that, and we'll just have to wait to see if they do.
That said, one of the things I love most about SuSE is yast, which has a wonderful n-curses based tool for when you are logged in via SSH. It really is spectacular. The best thing about it is that people who aren't all that linux savvy can still use yast to configure the box without too much difficulty.
Don't count your messages before they ACK.