Why Microsoft Can't Afford To Let Novell Die

geek4 sends in an analysis indicating that Microsoft may have the most to lose if hedge-fund operator Elliot buys Novell. (The eWeekEurope piece is based on a longer and geekier writeup by Andy Updegrove on how the mechanics of unsolicited tender offers can play out in the tech world.) To avoid meltdown or asset-stripping, Novell can try and find a preferred bidder — a company with some interest in running Novell as a business, and preferrably a tech company. Or another company may make a move independently. But who might that be? A couple of analysts have suggested IBM, Oracle, or SAP. These all have problems... Microsoft is in a similar category, with one added problem. ... Microsoft has staked any open source credibility that it has on Novell's SUSE distribution. If Novell falls to bits, then Microsoft's efforts to gain open source cred pretty much disappear with it. It's something that would have been impossible to imagine a few years back, but if we're looking for someone to prop Novell up, Microsoft would now be a prime candidate."

Comments

Re:Microsoft the tar-baby

[Bruce Perens]

I think SuSE understood what they had to do to make a business out of a Linux distribution. And Ubuntu/Canonical has, and they started later. I don't believe that Novell ever has. Like Caldera before them, they ended up alienating the very communities that would have pushed their own product in the enterprise, because they didn't understand that those communities were grass-roots engineering staff within their corporations - and were already connected to Open Source developers if they weren't themselves the developers - rather than the IT management that Novell focused upon.

So, Novell was doing poorly, and saw MS as a fast and easy source of some third of a Billion dollars if they'd just do what Microsoft wanted, which would also endear themselves to those same IT managers that Novell was after, while further alienating the engineers.

It was a short-term strategy.

Want to bet that Novell becomes a litigation factory eventually? We're starting to see the symptoms.

Bruce

IBM should buy them.

[Ungrounded Lightning]

Novell still has the copyrights to Unix.

If Microsoft were to buy them we could see a re-run of IBM vs. SCO, with Microsoft playing SCO but, having learned from SCO where the land mines are and having the REAL copyright ownership, going after any places where they might win and winning. They might be able to collect a "Microsoft Tax" on any remaining Unix vendors that are still running under ongoing licenses. They might find places where other vendors weren't covered by previous licenses. They might find some code leakage from Unix to open source projects and go after them, beating them into submission or bankruptcy, maybe winning on the merits, maybe winning by just having big pockets while open-sourcerers live on a shoestring. This could be a disaster for IBM, open source, any remaining proprietary Unix vendors, etc.

If IBM buys Novell they are protected from this sort of attack on their current business model from now on. They have the option of releasing the Unix code base under open-source licenses. I could go on.

IBM has the bux, the incentive, and the smarts. So I'm not just hoping, but betting, on them.