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03.23.10

With Novell up for Sale, Novell Products Become Too Risky to Buy

Posted in Microsoft, Novell at 6:36 am by Dr. Roy Schestowitz

Novell logo bitten

Summary: As BrainShare kicks off it becomes apparent that Novell does not reject a takeover and Microsoft could be among the bidders

THE news continues to come regarding Novell's willingness to sell the company given the right offer/price. Brian from the Linux Foundation has this to say:

Why Novell waited until Saturday to announce the news is anyone’s guess, but since I can be classified as anyone, let me take a shot: rejecting what on the surface seemed a pretty solid bid as far away from stock market times as possible will will help alleviate any potential blow NOVL’s stock price this morning when the NASDAQ opens. Though, in early market trading this morning, NOVL was up, so perhaps that blow isn’t coming.

[...]

As for Novell, time will tell if someone comes up with another bid. And will that bid be a better one, or was Elliott’s first run the best offer?

Over at Linux Magazine we find this new article which ponders a Microsoft takeover of Novell. Since Novell has products that compete against Microsoft’s, there would be antitrust barriers, but if Novell was sold in pieces, it might actually work. Earlier this year we wrote about Novell transforming itself from a 4-unit company into a dual-unit company, possibly in preparation for a sale of one part. That was the argument we had made at the time, before more evidence came. To quote parts of the latest article:

What If… Microsoft Bought Novell?

[...]

What If… SUSE is to Windows as MySQL is to Oracle?

Much like MySQL, Linux is growing and isn’t going to simply fade away. While Oracle would probably like everyone to just purchase a large Oracle license it’s clear that’s not going to happen for a large percentage of potential customers, so they should probably just take whatever profits they can from MySQL licenses. Sell Oracle where you can. Sell MySQL where you can’t.

Microsoft could use this strategy with SUSE. Concede some areas where Microsoft struggles to Linux, force SUSE out of others, tighten the integration between the OSes and reconcile the issues of a competitive product mix with your sales team.

Messy. Complicated. Still, it’s possible and Microsoft could use a new revenue stream. But very few in the Linux community would believe MSFT was giving SUSE a fair shake.

What If… Microsoft Declares Total (Patent) War?

Possibly the most popular of the potential What If…? outcomes, Microsoft could use the ownership of Novell to push patent-laden code into SUSE (and potentially upstream into the Kernel) creating a cascade of licensing litigation/strong-arming and, possibly, the crippling of the GPL.

This is really just a variation on what many think Microsoft is already doing (See Microsoft Patches Linux; Linus Responds and Trimming the FAT: Linux and Patents). The difference in this scenario, of course, is that their ownership of SUSE could speed the process along.

Whoever buys Novell (and it’s likely that it will be sold somehow and sometime this year), the company’s output is a toxic asset to anyone who buys it. To buy products from Novell is to acquire technology whose short-term future is unknown. It’s just another reason among many more to avoid Novell products.

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