Why Microsoft Can't Afford To Let Novell Die 215
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kdawson
from the dark-knight dept.
from the dark-knight dept.
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."
Re:Microsoft Has Already Moved On To Ubuntu (Score:5, Interesting)
Except that it's not a patent minefield.
It's a blowhard's way of stanching competition with bogus citations. Ubuntu doesn't have the enterprise penetration of any of the community versions of SUSE or Red Hat. Novell's stupid, and hampered by the FOSS community's perception that they're a Microsoft sell-out because of their license agreement with Microsoft.
Still, the openSUSE community thrives. It's Novell's legacy problems (hello Eric Schmidt!) and their incapability of appealing to enterprise systems designers that they're in the undervalued column. Microsoft won't buy them. They'll get broken into pieces, and sold off that way. My guess: to Oracle, whose Linux version languishes. At least Oracle knows how to excite developers.
Re:Microsoft the tar-baby (Score:5, Interesting)
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
Amazing How Easy It Has Been For Microsoft (Score:2, Interesting)
When Novell sold out to Microsoft you had open source kooks falling all over each other to proclaim that they would go right on using Novell products and projects so they could brag about how 'open minded' they were to the rest of the world(who didn't give a shit one way or another).
You have to imagine the execs up in Redmond were just shaking their heads in disgust that they had disrupted the open source/Linux world with so little effort.
I don't think Microsoft is really actively wasting time with Ubuntu. They don't have to. Linux marketshare is going nowhere outside of statistical blips. They have Miguel de Icaza doing so much damage to desktop Linux adoption and application development with the Gnome/KDE split and the Mono fiasco that they surely must be entirely focused on Google and Apple(commercial companies run by grownups and staffed by competent people who put in 40+ hour a week work on the unglamorous work that goes into creating polished consumer ready software).
Re:Microsoft the tar-baby (Score:5, Interesting)
Novell has a long, long history of making short-sighted decisions that eventually turn out badly.
It failed to see the shift from dedicated, limited network OS to distributed peer-to-peer networking.
It didn't react in time to dump IPX/SPX and got left out of the whole internet thing.
It bought Wordperfect about the time it tanked, then couldn't make a go of it.
Then it bought Suse, and screwed that up too.
Now it's got wads of cash. How much do you want to bet it will make a short-term decision that ends badly?
Re:Microsoft the tar-baby (Score:3, Interesting)
IBM should buy them. (Score:5, Interesting)
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.
MS and Apple seem to be best friends these days (Score:3, Interesting)
Apple has a fully licensed MS Exchange client on 50 million or so iphones and ipods
Snow Leapard has a fully licensed MS Exchange 2007 client
MS Office for Mac will have Outlook in the next version
Rumors are Bing is going to displace Google as the default search engine on the iphone
Apple is big in Open Source since OS X is based on some version of BSD. FreeBSD I think
Microsoft doesn't seem to want to compete in the mobile space or with MP3 players. the Zune was a total waste of great hardware
Apple doesn't seem to want to compete in the Enterprise Software market where MS likes to be these days
And Google with their vision of the cloud is the common enemy to Apple and Microsoft's fat client strategy
Re:IBM should buy them. (Score:5, Interesting)
That's what I always wondered. (Score:4, Interesting)
Instead of buying a distribution, how about hiring some of the coders and providing them with specs to get your money-making products ported to ALL Linux distributions?
Then pay bounties for improvements you need/want in other areas of Linux.
Your company and products end up distribution-agnostic and you have lots of good will from paying the coders who are furthering Linux. And you can do it for a LOT less than the price of buying a whole distribution.
Re:Rubbish article (Score:3, Interesting)
Hmm, I've got 10K+ cpus running right now. I 'd bet at least three nodes are actually running Ubuntu: some of our SAs like it, and I'm guessing a few boxes got booted manually and left in some random mode. Me, I don't much care, as long as the node can fork and exec and return the right results.
Who will own Unix? (Score:4, Interesting)
SCO lost because Novel owns Unix, the utilities, posix, and how it operates.
I am afraid of someone like Microsoft buying Unix only to cease and desist any Unix like product that looks similar. What better way to get back at Oracle and kill Linux then to own the unix standard?
They had some decent products. (Score:3, Interesting)
I still prefer their file/directory rights system. And eDirectory was decent. And GroupWise was decent.
Re:Microsoft the tar-baby (Score:2, Interesting)
Without Microsoft, Novell would have hit this crossroad many years ago. Novell could not have slowly and organically built a Linux business fast enough to replace lost revenue from the decline in things like NetWare. Microsoft gave them cash, marketshare, and mindshare (with paying enterprises, not the FOSS community of course).
Indeed, the Linux business of Novell has steadily increased and is one of the bright spots if they are allowed to continue. But it is doubtful that an investment firm is going to be interested in slow but steady, long-term growth when they can gut the company and make a quick buck.
Novell may ultimately fail, but they have already made it much further with Microsoft then they would have without.
Novell killed itself with its choices (Score:3, Interesting)
Re:Microsoft the tar-baby (Score:3, Interesting)
I once emailed RHovespain @ Novell because I saw a tremendous opportunity for Novell -- to be the SUSE/Ubuntu of the small business world. I was very excited about SLES / SLED and the possibilities for our small business customers (who typically use SBS2003 and now SBS2008). To have something like eBox/samba/ldap in one box with a well-maintained package repository.. seamless virtualization for legacy apps.. Their press releases were making me really excited with the possibilities. All the pieces exist independently, pretty much... All Novell has to do is put the pieces together.
The Novell website for potential enthusiasts like me was nigh impossible to navigate. I spent the better part of 2 days buring about 11 CDs (no DVD distribution was available) of SLES/SLED 10 and after that.. being thoroughly underwhelmed. I basically wanted SBS in a box (something for file serving, something for intranet, ldap, workstation management and exchange type functionality) and seemed to be advertised as such (with groupwise) but I just couldn't make it materialize after playing with it for a couple days. I lost interest after that.
The point is that Novell very much has missed the boat in terms of knowing what their would-be customers want.. While it would have been easy to anticipate the licensing snafu I don't think this would have been a real problem especially if this was prelude to tighter integration with microsoft stuff. That certainly would have been an easier pill for businesses to swallow, I think, if they could have their "business in a box" app.
I would like to see the Novell name on a such product that appeals to small businesses and certainly they could make this happen on a modest budget with the talent they still employ.
Re:Microsoft the tar-baby (Score:3, Interesting)
This was a really big part of it. The other aspect that people seem to ignore was the back-and-forth sales calls on big customers by both Novell and Microsoft.
Novell: "We've got this great OS now, and it is inexpensive, and if you later want to part ways, there's Red Hat and other companies who you can turn to for support. It's the new thing, and Microsoft is 'Legacy'. You want the newest and the best, don't you?"
Customer: "Well Microsoft does kind of suck, and is expensive."
Microsoft: "So Novell is telling you to become the next AutoZone, hmmm? They got sued for running an OS with patent problems you know."
Customer: "Dang. We're already a big company that attracts frivolous lawsuits. Novell - we are not interested."
The Novell sales reps goes back to their bosses. They hatch a plan. Microsoft takes the bait.
Novell: "Remember how Microsoft was warning you about Linux? Well, they sell Linux now. Ours! You interested?"
What is Microsoft going to counter with? "Uh, we'll take your money, but we might sue you later." What would that do to their future sales (of all types)?
You are 100% correct that Novell did think about Red Hat as a competitor, and that drove a big part of the decision. It was a huge mistake to turn on Red Hat. When you try to feed your teammates to the alligator, all you are really doing is trying to be eaten last. With your teammates, you could have slain the alligator.
But they did choose to say "We and Microsoft are buddies now, and you won't have any trouble running Windows VMs under SLES, or SLES VMs under Hyper-V. Neener neener neener Red Hat." It may have gotten them a few sales, but the taunting of a beloved teammate sure pissed a lot of people off. Not to mention becoming best buds with the alligator.
RedHat should step in (Score:4, Interesting)
I hate to see Novell die (I was a CNA way back in the day, and learned NetWare 3.x in high school), but I think it'd be for the best interest of FOSS due to their taintedness with Microsoft.
Here's what I think should occur:
RedHat should set up a third-party company that they own. That company should buy Novell. That company should sell all non-tainted assets to RedHat.
Then what is left are the tainted bits the third-party is holding. Let it just die or shut down or whatever it is that you can do with a corporation to put it out of its misery.
Re:Microsoft the tar-baby (Score:3, Interesting)
Yeah, because if they stayed away from Microsoft, then they would not have gotten attention from a hedge-fund company. Novell is not trying to sell itself because they are doing something bad, Elliot is trying to buy because they are doing so good.
I smell a car analogy! (Score:3, Interesting)
You might ponder why Novell would associate itself with Microsoft--a business of the kind Novell most think would be best to stay far away from. I think that in this case we've seen the story play out in the automotive industry. Perhaps Novel should've heeded the lesson.
Novell is like Chrysler. At one time, not so long ago, both companies were "second bananas" in their respective industries that despite past troubles and having to face major crossroads were showing promise and were prosperous and improving...
Novell: it was direction-less and fighting a losing battle with Microsoft. The flagship products like Netware and the stepchildren it acquired like WordPerfect were starting to look antiquated and were losing market share to WinNT and MSOffice. Then at some point they remade themselves. They embraced open source and did a stellar job acquiring SuSE and Ximian in the face of doubters to building a sustainable, quality business around their Free software and though they've never achieved #1 spot over Red Hat they became a very respectable part of the "big three" Linux-based OSes.
Chrysler: it was direction-less and fighting a losing battle with imports from Asia and Europe. When OPEC was closing the taps and drivers had to hunt for pumps that hadn't run dry and cute, little round imports like the Beetle and the Civic and the Corolla were taking America by storm...and there was Chrysler building big, thirsty, stodgy boxy road boats. Finally facing the prospect of bankruptcy and pleading for a government bailout (the first time) they were forced to face reality. Iaccoca came in as chairman and embraced an whole new set of smaller more efficient front-wheel-drive platforms resulting in early successes like the Aries and Caravan. Chrysler did a stellar job in acquiring AMC from Renault and making the Jeep brand part of a sustainable, increasingly quality business that though far from #1 was a leader in design and once again a respectable part of the "big three" American-based automotive companies.
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Novell: at the peak of its game it started to lose momentum again and though still in a very good financial condition felt the pressure to shake things up again and find a new growth strategy. This time, however they lost sight of their customers and the culture of the company. Someone who clearly didn't "get it" decided Novell should associate themselves with Microsoft. The flawed logic was that as the IP trolls gained prevalence and MS seemed here to stay for eternity that Novell would be the "safe harbour" from litigation and the Linux you could go with for superior interoperability with Windows infrastructure. But the cultures of the two partners could never mix and Linux customers were about OPEN systems and were offended that Novell would poison that openness just to get some cash and potentially check off some boxes on "the facts" list. Furthermore, for all the bad will the deal generated that hurt Novell's business Microsoft did nothing to promote the use of Linux amongst those that received its "SuSE Certificates". In the end MSFT did more to damage Novell than to nurture it.
Chrysler: They finally had more products that scored above average than below in performance and reliability, and it was the "cab forward" era when the cars were sleek, roomy and comfortable without being big lumbering boats. However they were hitting a plateau and needed investment to keep relevant and growing. Against common wisdom they chose to get with Daimler--a company that serves a completely different market segment, were known for quality but rather stodgy designs based in a country with a much more button-down way of doing business. Mopar fans' reactions were rarely favourable to the idea and nobody seriously thought Daimler REALLY thought of Chrysler as an "equal partner". Instead of getting the best of both worlds we got the worst--Chrysler's level of quality and MB's design influences! As the "cab forward" era ended MB did NOTHING to help Chrysler and in fact starved it
Re:Microsoft the tar-baby (Score:3, Interesting)
Probably because it's true.
Well, Suse as part of Novell is still failing if you think it was before, and it's only recently that through some creative accounting they have allegedly broke even.
It's not unusual for companies like Suse to take several years to turn some solid revenue and then profit. Suse certainly wasn't failing. Mandrake went through the same process and they are very much still around. Red Hat took some time to hit their stride.
That'll be as a result of the work that Suse put in before and after they were bought by Novell.
Hmmmm, this is the part where I smell some astroturf. SLED is so far away from being a Windows desktop replacement it is unreal and it is very, very, very, very seldom used. God knows how small a part of Novell's Linux revenue it is. Suse's own desktop offerings before Novell's takeover probably made more. To mention SLED is, frankly, a joke and backs up Red Hat's decision to largely leave the desktop behind. As it is, it isn't viable.
The Linux division has broke even, thanks to Microsoft's coupons, but the point is it is still a drop in the ocean when compared to the total revenue from Netware and other software - even if it is declining. They just haven't worked out what to do with that older proprietary software and haven't worked out what business model they want.
Re:Who will own Unix? (Score:3, Interesting)