EditorsAbout the SiteComes vs. MicrosoftUsing This Web SiteSite ArchivesCredibility IndexOOXMLOpenDocumentPatentsNovellNews DigestSite NewsRSS

06.02.08

Novell’s Financial Hocus Pocus: How Poorly is It Really Doing? (Updated)

Posted in Finance, GNU/Linux, Microsoft, NetWare, Novell, SLES/SLED at 5:12 am by Dr. Roy Schestowitz

“Novell is dying,” concludes one man

One issue worth exploring is future prospects of Novell. The company is still in a state of gradual transition.

There are 12 of us at the moment in the IRC channel ( #boycottnovell @ FreeNode ), which has just been formally registered. One subject that was willingly brought up is Novell’s latest financial report, which we mentioned a couple of times last week [1, 2].

Here is last year’s annual report (published in December 2007) and the corresponding document on the SEC’s Web site. Also consider this quick analysis, which basically showed us that Novell pays Microsoft for SUSE sales that it makes, based on volume. Here are some notes about the report from March 2008 and here is the latest report, or at least a synopsis (truncated documented). The full report can be found and read here (free registration required).

Beneath the surface you already find some similar responses to ours, e.g. from LinuxToday:

I’d love to know how Novell is going to replace several hundred million dollars of revenue around Netware, which Microsoft is systematically having for lunch, with a pitiful thirty million dollar Linux business that Red Hat wouldn’t get out of bed for. You do the math.

Personally, I seriously doubt the revenue increase claims, because Novell’s Linux business has been treading water around that figure for a few years now. Any revenue increase on such a small figure when compared with their historical Netware revenues (which they have to replace), and those of other companies Novell thinks it competes with, such as Red Hat, are just insignificant.

Further, it says:

Microsoft is not a partner [of Novell]. It’s a very direct competitor, and the reason why Novell went cap in hand to Microsoft is because they can’t compete, they don’t have any idea of the first thing to do to try and compete and they simply want Microsoft to stop taking them to the cleaners. This was all they could come up with to make it stop.

Another person takes a look at the hard numbers

Looking at the “Total net revenue”

2008 – $235,666
2007 – $232,387

Which is good. It is an increase. But it’s an increase of:
$3,279.

Now, the claim is:
29 = x + .31x
29 = 1.31x
22 = x (approx)

So Novell’s Linux segment earned $7 million MORE than last year …

And every other segment is doing good, too …

But the total increase is LESS than the increase of Novell’s Linux segment.

Which really doesn’t make any sense. In order for the total to be less than one of the segments, at least one of the OTHER segments has to be doing worse than last year.

[...]

Someone later jumped in to defend Novell, but the argument backfired because it did not correspond to simple facts.

Yes. And unlike you, I know what “Workgroup product” means. That’s NetWare. Their largest revenue stream is dying.

So a 1% loss in NetWare almost completely offsets a 31% gain in SuSE.

Novell needs to get customers for their Linux product as fast or faster than they lose them from NetWare. And Novell is not doing this.

[...]

If Novell is not gaining market share, then Novell is doing nothing more than milking existing customers.

At best that means that Novell is stagnant.

Otherwise, it means that Novell is dying.

Novell is dying.

Going back to the start, it was Asay who generated the buzz about Novell doing well (a claim backed by Novell’s embellished reports). Looking at his own blog last night, you find this. Given the growth he has been boasting for a long time and also the audiocast where he said that everyone plays the 'bucket game' (including Novell), this just doesn’t seem right.

Update (03/06/2008): This one comes from a notorious author, but it sheds some more light.

Novell made $5.87 million, or two cents a share, in its second fiscal quarter ended April 30 on flat revenues of $235.7 million, up only ~$3 million. A year ago it lost $2.9 million, down a penny.

Legal and R&D cost it $4.5 million.

On a non-GAAP basis, income from operations for the second fiscal quarter 2008 was $16 million versus $9 million last year.

The company’s product revenue from Open Platform Solutions, almost all of it Linux, came to $30 million, up 31%.

Service revenues were down 19% to $41.1 million.

Share this post: These icons link to social bookmarking sites where readers can share and discover new web pages.
  • Digg
  • del.icio.us
  • Reddit
  • co.mments
  • DZone
  • email
  • Google Bookmarks
  • LinkedIn
  • NewsVine
  • Print
  • Technorati
  • TwitThis
  • Facebook

If you liked this post, consider subscribing to the RSS feed or join us now at the IRC channels.

Pages that cross-reference this one

What Else is New


  1. Links 24/6/2016: Xen Project 4.7, Cinnamon 3.0.6

    Links for the day



  2. Benoît Battistelli Should Resign in Light of New Leak of Decision in His Vendetta Against Truth-Telling Judge (Updated)

    Benoît Battistelli continues to break the EPO's own rules, not just national laws, as a new decision helps reveal



  3. Fake Patents on Software From Fake Australian 'Inventor' of Bitcoin and the Globally-Contagious Nature of EPO Patent Scope

    News from Australia regarding software patents that should not be granted and how patent lawyers from Australia rely on European patent law (EPO and UK-IPO) for guidance on patent scope



  4. Patent Lawyers Love (and Amplify) Halo and Enfish, Omit or Dismiss Cuozzo and Alice

    By misinterpreting the current situation with respect to software patents and misusing terms like "innovation" patent lawyers and others in the patent microcosm hope to convince the public (or potential clients) that nothing in effect has changed and software patents are all fine and dandy



  5. Looks Increasingly Plausible That Battistelli is Covering up Bogus and/or Illegally-Obtained 'Evidence' From the EPO's Investigative Unit

    Why we believe that Benoît Battistelli is growingly desperate to hide evidence of rogue evidence-collecting operations which eventually landed himself -- not the accused -- in a catastrophic situation that can force his resignation



  6. As Decision on the UK's EU Status Looms, EPO Deep in a Crisis of Patent Quality

    Chaotic situation at the EPO and potential changes in the UK cause a great deal of debate about the UPC, which threatens to put the whole or Europe at the mercy of patent trolls from abroad



  7. Another Demonstration by European Patent Office (EPO) Staff on Same Day as Administrative Council's Meeting

    SUEPO (staff union of the EPO) continues to organise staff actions against extraordinary injustice by Benoît Battistelli and his flunkies whom he gave top positions at the EPO



  8. Links 23/6/2016: Red Hat Results, Randa Stories

    Links for the day



  9. Interview With FOSSForce/All Things Free Tech

    New interview with Robin "Roblimo" Miller on behalf of FOSSForce



  10. Links 22/6/2016: PulseAudio 9.0, GNOME 3.21.3 Released

    Links for the day



  11. IP Europe's UPC Lobbying and the EPO Connection

    The loose but seemingly ever-growing connections between AstroTurfing groups like IP Europe (pretending to represent SMEs) and EPO staff which is lobbying-centric



  12. EPO “Recruitment of Brits is Down by 80%”

    Letter says that “recruitment of Brits is down by 80%” and "the EPO lost 7% of UK staff in one year"



  13. The Conspiracy of Patent Lawyers for UPC and Battistelli's Role in Preparing by Firing People

    The parasitic firms that lobby for the UPC and actually create it -- firms like those that pass money to Battistelli's EPO -- are doing exactly the opposite of what Europe needs



  14. Patent Lawyers, Having Lost Much of the Battle for Software Patents in the US, Resort to Harmful Measures and Spin

    A quick glance at how patent lawyers and their lobbyists/advocates have reacted to the latest decision from the US Supreme Court (Justice Breyer)



  15. Links 21/6/2016: Fedora 24 and Point Linux MATE 3.2 Officially Released

    Links for the day



  16. Supreme Court on Cuozzo v Lee Another Major Loss for Software Patents in the United States

    Much-anticipated decision on the Cuozzo v Lee case (at the highest possible level) serves to defend the appeal boards which are eliminating software patents by the thousands



  17. As Alice Turns Two, Bilski Blog Says 36,000 (Software) Patent Applications Have Been Rejected Thanks to It

    A look back at the legacy of Alice v CLS Bank and how it contributed to the demise of software patents in the United States, the birthplace of software patents



  18. EPO Self-Censorship by IP Kat or Just Censorship of Opinions That IP Kat Does Not Share/Accept (Updated)

    ree speech when it's needed the most (EPO scandals) needs to be respected; or why IP Kat shoots itself in the foot and helps the EPO's management by 'sanitising' comments



  19. Caricature: Bygmalion Patent Office

    The latest cartoon regarding Battistelli's European Patent Office



  20. Links 21/6/2016: GNU/Linux in China's HPC, Linux 4.7 RC4

    Links for the day



  21. Under Battistelli's Regime the EPO is a Lawless, Dark Place

    How the EPO's Investigative Unit (IU) and Control Risks Group (CRG), which is connected to the Stasi through Desa, made the EPO virtually indistinguishable from East Germany (coat of arms/emblem above)



  22. New Paper Demonstrates That Unitary Patent (UPC) is Little More Than a Conspiracy of Patent 'Professionals' and Their Self Interest

    Dr. Ingve Björn Stjerna's latest paper explains that the UPC “expert teams” are in fact not experts but people who are using the UPC as a Trojan horse by which to promote their business interests and corporate objectives



  23. Money Flying to Private Companies Without Tenders at Battistelli's EPO (by the Tens of Millions!)

    Extravagant and cushy contracts to the tune of tens of millions of Euros are being issued without public scrutiny and without opportunities to competition (few corporations easily score cushy EPO contracts while illusion of tendering persists -- for small jobs only)



  24. Patent Examiners and Insiders Acknowledge Profound Demise in Patent Quality Under Battistelli

    By lowering the quality of patents granted by the European Patent Office Battistelli hopes to create an illusion of success, where success is not measured properly and is assessed by biased firms which he finances



  25. Jericho Systems Threatens Alice, Court of Appeals for the Federal Circuit Threatens the Patent Trial and Appeal (PTAB)

    A look at the two latest threats to those who helped put an end to a lot of (if not most) software patents in the US



  26. How the Halo Electronics Case Helps Patent Trolls and How Publications Funded by Patent Trolls (IAM for Instance) Covered This

    A Supreme Court ruling on patents, its implications for software patent trolls, and how media that is promoting software patents and patent trolls covered it



  27. Patent Lawyers' Fantasy Land Where Software Patents Are Suddenly Resurrected Even When They're Not

    A quick glance at where the debate over software patents in the United States stands and how profiteers (such as patent lawyers) not only mislead the public but also bully the messengers



  28. Links 19/6/2016: Randa Over, Fedora 24 Release Soon

    Links for the day



  29. [ES] La Oficina Europea de Patentes de Battistelli Amplia su Contrato con el Nefasto FTI Consulting Para Neutralizar a los Medios, Desperdicia Millones de Euros

    Sacando a luz a lo que pasa con el presupuésto de la EPO y como es puesto “a trabajar” bajo la tiranía sin precedente de Battistelli (Eponia) justo en el corazón de Europa



  30. [ES] Oportunos ‘Regalos’ de Battistelli a los Estados Miembros (Poco antes de que Ellos Puedan — y Deberían — Despedirlo)

    Regalso de la EPO (dinero) ofrecido condicionalmente (bajo revisión) días antes de que los países envíén sus delegados para que potenciálmente despidan a Battistelli, lo que ciértamente deberían hacer, y lo último del juicio de un juez nos sugiere que Battistelli está determinado a destruír a las salas con ayuda de esos delegados


CoPilotCo

RSS 64x64RSS Feed: subscribe to the RSS feed for regular updates

Home iconSite Wiki: You can improve this site by helping the extension of the site's content

Home iconSite Home: Background about the site and some key features in the front page

Chat iconIRC Channel: Come and chat with us in real time

CoPilotCo

Recent Posts