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Novell Missteps Not Affecting SuSE
OSS_ilation writes "Analysts and users agree -- if the layoff rumors at Novell prove true sometime soon, SuSE Linux has nothing to fear. Over at SearchOpenSource.com the word is that the popular SuSE Linux operating system has both the community support and technical chops to weather any personnel-related storms that may be lingering on the horizon. However, the point is also made that should Novell go south, there are those who believe SuSE could prove to be an appealing acquisition target."
This is slashdot where group think is convinced massively wealthy, divested and well run corporations are constantly on the brink of extinction. That same group think predicted that Novell, a company in serious trouble before it acquired Suse, would soon take over the IT world because it had a linux distro.
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I thought this layoff was all part of the plan to appease shareholders, that and perhaps Messman is trying to buy himself more time, since the general consensus is to get rid of the guy.
Suse is unimportant. It's yet another linux distro, one among many, and it isn't even that different. If Suse disappeared, its users could just switch to another distro.
Mono, however, is vastly cooler and far more important than Suse, for two reasons. First, there is no open source alternative to Mono--they're actually writing something new instead of just putting together yet another distro. Second, consider Mono's impact--Mono is an implementation of the .NET CLR and C# compilers that will allow future applications written for the Microsoft platform to run seamlessly on Linux (!!). It would be difficult to overstate how important that is. Mono is a major contribution.
Novell funds both Suse and Mono. But only Mono matters. If Novell has problems (and I'm not sure they even are having problems), it shouldn't be Suse that concerns us.
Hate to say it, but the notion that troubles at Novell won't affect SUSE is complete bullshit. They need enterprise sales. The enterprise generally doesn't invest in troubled companies that might have gone down the tubes one year into a five-year support package. And that's excluding any impact on Novell Linux if a new strategy vaporizes their R&D budgets. Any long-term cloud over Novell is going to be a killer for SUSE. In Linux terms, it would be a case of no one ever went broke buying Red Hat.
That wouldn't be attractive for many companies. I mean, why change from Windows to Linux when the only credible Linux game in town is Red Hat and they want to be just like Microsoft anyway. This sounds much more like analysts talking up SUSE because they know full well that if it comes to a showdown at Novell, the Linux part is the one that will sell for decent money, if they can keep it untarnished.
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Exactly how did we go from layoffs to folding?
It doesn't take much research to discover that Novell grew their business in the early 90s to the mid 90s from less then $500 million to over $2 billion. And when they hit their peak in the mid 90s they had over 7000 employees. In the late 90s Novell's business was cut in half to about $1 billion and they have held there for some time. Currently the number of employees is at 6000+ and their costs to run their business just about overwhelm their revenue. Which begs the question, does this billion dollar company have more people than are necessary to run the business? I know what the numbers say, but I'll let everyone figure it out for themselves.
The point to keep from all this, while Novell has not done a good of keeping costs under control they have done a good job of keeping their revenues up since Microsoft sucked away soo much of their business. So it is not likely Novell will be folding anytime soon and if anything they will become a leaner and more profitable company which currently has an excellent business plan point directly at the burgeoning open source market.
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It's been suggested they will follow some shareholder advice. 1. Spin-off GroupWise (a profitable product line that needs better marketing) I'm not sure it will sell as well. GroupWise needs more developers attracted which requires marketers and in-house consulting and developers. 2. Spin-off their consulting arm (which is manpower bloated since their acqusitions) which is how they got current their red headed step-child CEO. 3. Reduce head count. They have money in the bank. Their top product lines (indentity management and portal design/content management applications) are 2-3 times what the market price (very good stuff mind you) is for a "close" product match. Obviously they always have had issues in successfully marketing. Rumors fly around every 2-3 years that big blue will buy them and Redmond will crush them. It's better and easier for IBM to continue their "corporate adoption" of Novell, because it keeps Redmond from going ballistic at IBM for being parents. It's also much cheaper for IBM than nuying them. IBM is realstic in the true accounting facts: if IBM bus the company, the product prices go up. Novell needs to be smart and find ways to lower prices to make more inroads to market share, garner the support of the open-source community (which they have, but find few open-source developers savvy enough to develop for edirectory). Head count is a GREAT place to do that, seeing how they have acquired so many companies in the past few years, something has got to give. Oh, and I really hope they start picking a product name and sticking with it. Right now they change some product names every 6-9 months. Noone can sell their stuff without asking what the product is named this quarter. Probably a result of different product managers who had their own ideas at product inception. What would also help them is if they wrote connectors for edirectory to "link" to some of the better known open source projects out there (Mambo/Joomla, Nagios and the like). Then watch people at the corporate level start flocking to Suse with edirectory for web applications instead of the Redmond stuff.
That's bullshit about them selling off Suse.
Them getting into linux is about the ONLY thing that people ever liked about Novell in the past 5 years or so. That's it. The top management fighting with each other on actually who gets the 'credit' for pushing the movement to open source operating systems.
That's it. It would be shit-ass suicide for them to sell of their linux systems.
The last of the loyal following is starting to drift off of Netware. Linux is the 2nd most popular operating system in the world and Linux and Windows is were Novel's customers are migrating to.
Without Linux, without Suse, there IS NO FUTURE FOR NOVEL. That's it. It's over. NDS is a great product, people are happy enough with Groupware and such, but without Linux Novell is just going to be another dying software company with a legacy operating system to support until all the hardware it's currently installed on wears the fuck out in 2-5 years. See also: SCO 5.0.x systems.
The investors love Linux, the community loves Linux.
Novel is in the business in providing desktop solutions and desktop support solutions. Network directory systems, application servers, groupware, etc etc.
So is Microsoft. Microsoft is in the business of providing desktop solutions and desktop support solutions.
The main difference is is that Novell's products are slightly nicer, but Microsoft OWNS AND DESIGNS the only fucking viable enterprise desktop operating system. It's kinda of a steep hill to climb there.
Novell's only hope, and pretty much any software company that isn't Microsoft, is that Linux desktop in the business place succeeds.
Why do you think that Oracle sell's more databases to run on Linux then anything else? Why are they making all this free software and built a open source distributed network file system for the linux kernel? Why do you think that Peoplesoft and various other companies are hurridly porting all their software to Linux systems?
It's because Microsoft is in the business now of making server systems, making desktop systems, and sells MS SQL for those systems and is working on Great Plains and related software to compete directly with Peoplesoft. (great plains may suck now, but not after Microsoft gets Vista out the door, throws several hundred million dollars at it, and integrates it seemlessly with Office and Windows)
Hell all the anti-virus and anti-spyware companies companies have had Linux products hidden away for a long time, and probably would be able to sell them if there actually was viruses and spyware actually existed for Linux. They shit a brick when Microsoft bought a anti-virus company and is now integrating it into their desktop system.
When your biggest competitor owns and designs the only platform that you sell software for, your going to fucking loose. Netscape learned this. Novell learned this. And dozens of other companies have learned this. The hard way. It makes investors very nervous.
You can make money on developing Windows software for a long time. As long as what your doing isn't that profitable Microsoft will leave you alone... but if you make a enough money to get noticed you can expect that as soon as Microsoft's investors start pissing and moaning the first thing they'll do is (if your lucky) buy your company out and re-release the software under a different name, or buy one of your competitors, or build their own product, and put your business out of business in a short time.
The future, probably the only viable future were Microsoft doesn't dominate most of the profitable parts of enterprise software, is the one were Linux and related open source software on the desktop in a big way in the next 2-3 years.
Novell's investors know this and generally sorta understand it. Throwing away Suse for any amount of money would kill Novell quicker then anything else they could possibly do to themselves and the investors will only see a tiny fraction of the money that they invested in them.
I'm guessing that the Ximian acquisition happened because "somebody knew somebody" up in the Boston area. Ximian's investors were losing money on the company and were able to make the right connections to get Novell to acquire the company. That's how these things tend to happen in the business world -- often it has nothing to do with technology. Ximian didn't really have anything Novell needed, and the former Ximian people certainly aren't doing anything now that Novell needs. Basically all they got was a pair of grandstanding blowhards and a GNOME-based desktop that didn't add a whole lot of value to the SuSE they acquired later.
SuSE, on the other hand, was a nice acquisition, because the company clearly had some value, and the brand *still* has value.
Novell blew it by not getting on the open source bandwagon in 1998 or so. If they had open sourced a basic version of NDS then, it would be the open directory standard today, and they'd have made a ton of money selling value-add products like Groupwise and BorderManager that run on top of it. Instead, they thought they could "win" -- even against Microsoft! How ridiculous was this, when they'd already played that game from the other side of the table? Novell had run roughshod over Banyan (the previous directory services leader) so they should have known full well that Microsoft would do the same to them.
Personally, I would like to see SuSE spun off again, and put in the hands of someone who could manage it better.
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That's not really the issue. The issue is that Novell is pumping a lot of money into SUSE and Linux in general. If they were bought by a company with a different agenda, that money and support going into Linux would evaporate.
It's not a matter of who owns the distro, it's a matter of what money is being invested in it.
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