Linux infusion gives Novell a needed boost

FRAMINGHAM (11/07/2003) - After years of watching Novell Inc. lose market share to Microsoft Corp. and other vendors, a lot of Novell users are saying the company's decision to acquire SUSE Linux AG could be exactly what's needed to revitalize the middle-aged developer of NetWare.

Together with its acquisition of Linux desktop vendor Ximian Inc. earlier this year, Novell's US$210 million purchase of SUSE, announced this week, will help the company make its product offerings more compelling, users said.

"The one part that Novell has always been a little disappointing (in are) the applications that run on their server (software)," said Brian Czajkowski, director of MIS at Perry Equipment Corp., an industrial filtration supplier in Mineral Wells, Texas. "I don't know everything that's coming on the Linux side, but it tends to make me think that maybe they're going to have a good, solid application server there."

Also good for Novell users, he said, is the related news this week of IBM Corp.'s $50 million investment in Novell to extend existing partnerships between IBM and SUSE. "That is a pretty bold move," Czajkowski said. "I was glad to see that, probably even more than the Linux (acquisition)."

Another Novell user, John Jakus, IT manager at Valence Technology Inc. in Henderson, Nev., said he too has long been unhappy about Novell's dwindling market share, out of fear that the company could someday no longer be viable. The SUSE deal has lessened those concerns, he said.

"I see the acquisition of SUSE and the Linux growth as a great potential for us because it gives us somewhere to move to maintain our current network environment and to go with the open-source explosion that's happening," Jakus said.

Linux Push

Novell began its push to Linux last April when it announced plans to adopt Linux as a migration path for its NetWare network operating system. "Definitely, when the next version of NetWare comes out, we'll be using it," Jakus said. "This to me brings it all together."

Gavin McGnauth, head of IT at Manchester, England-based British Airways CitiExpress, said the SUSE deal will likely mean a tightening of the airline's IT relationship with Novell. Currently, the regional air carrier is a heavy user of Novell products and of Linux from Red Hat Inc. But that will likely change once Novell acquires SUSE, he said, because of the expected synergy and because of recent higher prices and per-server licensing requirements from Raleigh, N.C.-based Red Hat. "We have no physical attachment to Red Hat," McGnauth said. "The barriers to entry for SUSE are very low. We'd probably push in that direction now."

Seeking Support

Rod Carney, manager of enterprise server services at Columbus, Ohio-based Huntington National Bank, said the inclusion of SUSE under the Novell banner brings a key benefit to its existing relationship with Novell: after-sales support.

"We now really have a solution for a Linux implementation that will provide us with a support network," Carney said.

The bank is a big Novell user and has several Red Hat systems that are being used for a message-queuing gateway and other edge-of-network tasks. But now other Linux applications can be considered more seriously, he said. "With Novell being such an incumbent here, now that they've acquired SUSE, that helps our decision if somebody says, 'What do you prefer, Red Hat or SUSE?' Two days ago, I would have said 'I don't know.' "

A SUSE Linux user and former Novell user, Joe Poole, manager of technical support at Reading, Pa.-based Boscov's Department Stores LLC, said Novell will have to do more than just bring in SUSE and Ximian to make its products compelling to corporate users, especially as a "killer desktop" operating system.

"Novell has to add value to the whole proposition," he said, including making it as simple for IT workers to install SUSE Linux as it is to install Windows. "Novell has to step up with all of its expertise, not just marketing," he said. "That's the problem we see now."

SIDEBAR

Microsoft to Stay Course On Linux Strategy

Microsoft Corp.'s chief Linux strategist said this week that the company won't change its strategy "one ounce" in the wake of Novell's acquisition of SUSE Linux.

Martin Taylor, general manager of platform strategy at Microsoft, said Novell's acquisition simply provides "further evidence that Linux is going to continue to consolidate and become more and more commercial."

"From our perspective, it means that Linux will move toward being held up to the commercial standards," Taylor said. "And that gives us an opportunity to look at things like cost, reliability, interoperability and even security for that matter on a more balanced playing field."

John Enck, an analyst at Gartner Inc., said Novell's acquisition of SUSE elevates the Linux threat on the server operating system for Microsoft, although not by "orders of magnitude."

Enck said Microsoft will have to decide how much more emphasis it wants to put on the low-level infrastructure end of the market where Linux plays, such as Web serving, file and print services, and management services, now that it has been making a push up the stack to focus on enterprise features.

But one area Microsoft will have to concern itself with is the 1,600 worldwide partners Novell has as Linux advocates, according to Enck. He said Microsoft will have to step up the training for sales consultants in the field to thwart the threat.

"The big thing is Novell is credible," Enck said. "It's someone with proven enterprise and field services (experience) that you can't wave your hands and dismiss."

-- Carol Sliwa

SIDEBAR

Why SUSE Over Red Hat?

'Red Hat was a bit pricey,' vice chairman says

Chris Stone, Novell's vice chairman, spoke with Computerworld's Don Tennant this week about why his company chose to acquire SUSE Linux instead of Red Hat. Excerpts from the interview follow:

Did you consider acquiring Red Hat as well?

Sure, we looked at everything. The two largest were Red Hat and SUSE, and then we looked at the others; there are a good 35 Linux (operating systems) there. Obviously, Red Hat was a bit pricey, so we decided we had the best fit -- economically, peoplewise, culturally -- with SUSE. They think like we do; they work like we do. They're very technically competent. So it was a really natural fit.

When you say Red Hat was a bit pricey, does that mean there were negotiations with Red Hat that got to the point of naming a price?

No. We decided that SUSE was who we wanted to acquire. We made a decision early on that SUSE was where we wanted to go. There was always an effort on the part of Novell to have a relationship in some form with Red Hat. We tried to form a support agreement with Red Hat, and that didn't work. It worked beautifully with SUSE.

I'd really like to clarify to what extent you had acquisition discussions with Red Hat as well. I'm not going to go there.

What does this mean for running NetWare on Red Hat Enterprise Linux?

We still do that. We still certify the NetWare services on Red Hat 3.0 as well as on SUSE. Obviously, now that we own the (SUSE Linux) distribution, we have to potentially rethink that, but as of right now, our customers have been asking for both. There's no technical reason that we shouldn't provide at least an option if you want to run it on Red Hat. But we're obviously going to lead with SUSE.

So your advice to users running NetWare on Red Hat is to move to SUSE? Sure. You can have one-stop shopping from Novell. You can buy the entire stack, support -- you name it, you got it.

Don't you see this as a risky move, in light of the legal actions SCO has taken with respect to Linux?

No, not at all. We think the SCO move is pretty much an unsubstantiated claim. They've never been able to prove anything they've been talking about. Our customers haven't balked at this issue. I don't believe SUSE has any particular issues with SCO. As far as we're concerned, it hasn't been an issue.

SIDEBAR

Red Hat: Competition Unchanged

For Red Hat, the dominant enterprise Linux vendor in the U.S., this week's buyout of rival SUSE Linux by Novell was no surprise, said John Young, vice president of marketing at the Raleigh, N.C.-based company.

Young said he's "not uncomfortable" with the development, and claimed that it doesn't significantly alter the competitive landscape. "We are the leaders in the market. The assets that Novell is poised to acquire are old stuff for us. We're (already) building on top of where they (are now going)," he said. "I don't doubt that that was a good move for SUSE. I don't think that takes us off our mission ... and the success we're having in the market."

Young also claimed that it will be no easy task for Novell to overcome the cultural obstacle inherent in adopting an open-source mind-set. "Novell is traditionally a proprietary technology company," he said, "so they're kind of putting their foot into the water on both sides here." He noted that whether Novell can make that work is still to be proved.

"I'm not sure how they'll manage that hybrid company," Young said. "I can't see any examples out there of how hybrid companies have achieved success. That's part of their challenges, in addition to the normal integration challenges" of bringing together Novell, SUSE and Ximian, he added.

For Red Hat, the future is more clear, according to Young. "We're absolutely committed to be 100 percent open-source, pure open-source," he said. "And that unwavering commitment will be a source of value to customers."

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