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Microsoft Still Takes Business Away from Novell

Posted in Finance, Microsoft, NetWare, Novell at 6:17 am by Dr. Roy Schestowitz

Some friend, eh?

The value of Netware skills is said to be declining, much like the technology itself [1, 2]. To be fair, it is not just Netware that’s affected by an overall trend, which may or may not favour Free software (systems integration and architecture skills). Here’s the punch:

For instance, IT certifications among those with the largest market value declines in the past 12 months included Microsoft Certified Professional+Internet (MCP+I) with a 40% decrmicrosoft-takes-froease. Pay for IBM Certified Advanced Application Developer — Lotus Notes/Domino, Novell/Certified Internet Professional (CIP) and Novell/Certified Novell Engineer (CNE) each shrunk by 25%.

More of Novell’s ‘legacy stuff’ keeps showing up in the news, indicating that problems with Novell software persist. From Computer World:

“One of my projects was to put in a Novell print server station that would print out labels in the assembly area,” says fish. “Rather than buy a new computer, I decided to put one together from several old 486 workstations that had been outdated and parted out.”

And fish’s Franken-PC works — mostly. It boots up and it can log into the Novell network, but after a while, the system locks up.

Problems with Novell servers have also just driven another school from Novell to Microsoft. It’s probably representative of a trend.

Frequent and extreme activity on one of the Novell servers has been causing it to crash, making the network drives inaccessible until the server reboots.


Right now, computers are having to support both the Novell and Microsoft Client environments, though ITS is working on switching over to the Windows Client.

We recently showed how Microsoft is 'stealing' from Novell's GroupWise. Is this the company that Novell is serving in so many ways? Why? Has Novell forgotten the past so quickly? Microsoft never cared about the welfare of Novell and, in order to prove this, appended at the bottom is a USENET post from 4 days ago.

Jim Allchin on Novell


   Message-ID: <d94fd9d1-f460-49f5-af1c-3e216e5c5915@k30g2000hse.googlegroups.com>
   From: Rex Ballard <rex.ballard@gmail.com>
   Newsgroups: comp.os.linux.advocacy
   Subject: Re: [Rival] Microsoft is Not Buying Citrix and Novell (Yet)
   Date: Tue, 16 Sep 2008 16:15:42 -0700 (PDT)

> Roy Schestowitz wrote:
> > Hash: SHA1
> > Is Microsoft buying Citrix? Novell!?
> > ,—-[ Quote ]
> > | Given a choice in the matter, Microsoft would happily bury Linux and
> > | open source in the IT trash-heap, but buying Novell wouldn’t get them
> > | one whit closer to that goal. That’s one of the reasons why Microsoft
> > | finds Linux so annoying. Unlike proprietary software companies, they
> > | can’t simply crush or buy it out of existence. As soon as they smashed
> > | one open-source company, another would pop up with the exact same
> > | software.

Microsoft was able to derail attempts by SCO, Novell, and Sun to bring
UNIX into the desktop market by making a series of deals with the UNIX
vendors and with the OEMs which made it possible for Microsoft to get
the OEMs to participate in a collusion scheme to exclude these other
competitors, especially with Windows 3.1, and it’s bundling with

With Novell, they told Novell that if they didn’t cancel the desktop
project that Microsoft would go into the file and print server market
with NT. Little did Novell’s board of directors know that Microsoft
planned to release a server that would knock NetWare out of the market

Sun wasn’t able to get the hardware vendors to write drivers for SunOS
and the Sun/386 machines, and Sun wasn’t quite willing to cross-
license to the other OEMs. They did cross-license to a company called
Solborne, who made a very profitable Unix workstation and laptop until
Windows 3.1 collapsed the market.

Later, when Sun tried to introduce Solaris/86 as a desktop system,
Microsoft made the deal to put Java on the PC. However, Microsoft
added their own “extensions” and took away the platform independent
character of Java, which was Microsoft’s way of making sure that Sun
did not re-introduce Solaris on an Intel Desktop platform.

As for OS/2, that is well published record and the more significant
details were disclosed in the Antitrust case.

Microsoft’s tactic against Linux has been to tie the OEM’s hands.
This included adding new restrictions on modifications to the boot
sequence. The agreement didn’t expressly forbid adding boot managers
and multiple partitions, but Microsoft just never approved the
requests, leaving the requests unanswered. Since the OEM license
required the OEM to get prior written permission, simply not answering
the request was sufficient to hold them in check.

> > | So, for now, they’ll work grudgingly with Novell, but buy Novell? It’s
> > | just not going to happen.

Microsoft may do what they did with SCO, holding enough of a
controlling interest to name key board members such as the treasurer,
who can give them details about who is buying what products, so that
Microsoft can “hammer them”, using software audits, CAL audits, and
other harassment tactics to force those customers back into the
Microsoft fold.

> > | Now, if Microsoft 7, or Vista Mark Two as I’m
> > | beginning to think of it, flops as badly as Vista, then maybe Microsoft
> > | will start considering changing its way.

The problem for companies like Dell, HP, Lenovo, and Acer is that they
can’t really wait for Windows 7 or some other form of vaporware. As
it is, about 1/2 the machines they are selling are selling at a loss.
In some cases, even the extended warranties aren’t making up the
loss. The retailers have also had a bad year. Back to School season
was a dismal mess. Many stores are still sitting on unsold (un-
sellable) inventory.

The only bright spot seems to be the Linux powered Sub-Notebooks, such
as the ASUS EEE and the Acer Aspire. The Acer Aspire was sold out so
quickly that Circuit City couldn’t keep up with the demand. Every
store in New Jersey was sold out. The ASUS EEE is also having trouble
keeping up with demand.

Ironically, the HP sub-notebooks on display were running XP, and that
seems to have dampened demand for their product on display.

Internationally, Linux laptops are getting more popular than ever, and
more and more stores are offering Linux laptops from Acer, ASUS, and
Everex as well as some lesser known companies like C4. Laptops with
“No OS” are also selling very well (since Linux can easily be
installed). The problem for Vista laptops is that they require so
much extra RAM, Disk, and CPU, that they are priced at almost double
the price of the Linux machines and almost triple the price of the “No
OS” machines.

For the first time in 30 years, customers are saying “NO” to all the
extra hardware just to get the latest version of Vista, which doesn’t
give them that much more than XP with similar 3rd party software, and
XP gives them more flexibility.

> > | So, talk to me again about
> > | Microsoft buying Novell, or here’s a scary thought, Red Hat, in two
> > | years time and I might have a different answer.

If they have anything to buy it with. Remember that Microsoft has
been using their cash hoard to finance pre-sales of Vista, and they
aren’t getting back the return they expected. In addition, the stock
has gone from 37/share to $25/share – a loss in equity value of nearly
$108 billion in net value.

Dell has also dropped about $12/share or about $24 billion in equity

HP is cutting 24,600 Jobs – and hoping to subsidize PC losses with
Consulting from it’s purchase of EDS.

> > | For now, though,
> > | Microsoft is getting what it wants from both Citrix and Novell without
> > | buying either one and that’s more than good enough for the boys from
> > | Redmond.

Microsoft’s primary goal with both deals was to make Wnidows (2008 or
Vista) a viable “Host” operating system instead of Linux. And make
that version proprietary.

The tactic worked. Microsoft can now act as “host” on Xen.
Furthermore, Microsoft can get royalties for the commercial version of

Ironically, this may back-fire, since most contributors to Xen were
under the impression that their source code would be protected from
proprietary predators like Microsoft.

I think we are already seeing a backlash in the form of other Open
Source hypervisors, as well as OSS controls.

The commercial server vendors, especially IBM, Dell, and HP, are
pushing VMWare, partly because it can use Linux as a lighter weight
“host” kernel with very lightweight libraries thanks to it’s plain-
text interfaces.

> >http://blogs.computerworld.com/is_microsoft_buying_citrix_novell

> Don’t trust any of them. Their staff, management, tech guys, tech gurus,
> sales staff are all cretins focused on moneterizing everything their way
> under their own control and ideals.

I would agree with this assessment. Novell has collapsed to
Microsoft’s demands again, and has again backed off their desktop
efforts, as did Red Hat. Too bad too, because SUSE has one of the
best desktop environments of any Linux distributor, including Ubuntu.
The commercially supported SLED is very reliable, installs easily, and
automatically installs the optimal video and audio drivers.

> Open source doesn’t allow them that
> and they will loose and ruin everything they touch taking with them a whole
> bunch of suckers like SuSE staff with glitter and gold that has no value
> outside of their own circles.

Not sure what actual pressure was used against SUSE, but Microsoft
typically uses the carrot as bait, and the baseball bat to make sure
you get into the cage after taking the bait.

Unfortunately, right now, Microsoft is losing it’s market power with

Apple’s average profit on an iMac or iBook is as high as 60%.

Loss on a Vista PC is often as high as 20%.

> There was a time I had many SuSE distros.
> Now everything is wiped clean and replaced with Linux distros that
> have value closer to Open Source than to Micoshaft Corporation
> funded Novel and their crappy infection which they still choose to
> call in a dishonest way as SuSE.

A Novell/Microsoft deal could bring value. For example:
- Microsoft could license XP libraries to Novell for use with WINE.
- Microsoft could license XP to Novell as an “appliance

Any Linux/Microsoft combination assures Microsoft of royalties from
OEMs, and also assures the OEMs the higher profit associated with
Linux or UNIX on the PC desktop or Laptop.

The biggest problem for Microsoft is that OEMs might decide to go “All
Linux” with more and more machines, and leave it to Microsoft to deal
with any piracy issues, since it’s not really the OEM’s responsibility
to enforce Microsoft’s copyrights.

The OEMs might even go so far as to offer an XP “appliance” – and not
even install Windows, but install Linux instead, with a “how to” for
installing the XP appliance under the virtualized desktop.

If Microsoft doesn’t learn to “play nice” with Linux, they might very
quickly find themselves being bumped out of the market entirely.

Keep in mind that Corporate IT departments were given a mandate in
2001 to plan and implement a migration strategy that would allow the
company to switch to a Microsoft-free environment if Microsoft
attempted to “force feed” a new version of Windows they didn’t want.

The Corporations have made it pretty clear that they do not want
Vista, and many are taking an aggressive stand against Office 2007.

Microsoft could find itself being “booted out the door” faster than
they realize unless they start to “play nice” with Linux.

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