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09.17.10

Goodbye, Novell

Posted in Novell, Site News, SLES/SLED, VMware at 9:33 am by Dr. Roy Schestowitz

“The Goodbye Novell Blues” (2009)

Summary: Coverage of the developments which spell the end of Novell

THIS post collects a lot of coverage about the imminent VMware-SUSE sale, which is not a done deal yet. A deal has not been formally signed, but seems like an inevitability given that other sources say that Novell is being split and sold [1, 2, 3, 4, 5, 6]. It is now pretty safe to say that Novell (as a public company or as a whole) is over.

Some of the Microsoft boosters are jubilant, as headlines like “At Long Last, NetWare Drops Dead” ought to show:

It looks like Novell (Nasdaq: NOVL) has settled on an exit strategy. According to sources spilling a bit of beans to New York Post, the enterprise software specialist will split in two parts, with the Linux-centric segment going to one unnamed buyer and the old-line NetWare and GroupWise portions headed for another destination.

Another known Microsoft booster wrote no less than two articles about it (in less than a day), suggesting that it’s a threat to Red Hat:

Other news coverage which we’ve found so far (about the VMware part emerging from the WSJ report Reuters too covered):

In an interesting new post, Matt Asay argues that “Novell’s Patents Are Complicating Its Sale” and here are some other parts of his argument:

After months on the auction block, Novell will be put out of its misery and sold within the next three weeks, according to credible sources. The only question is, why it has taken so long? The answer, according to a source close to the company, is patents. Big, juicy patents.

After all, there’s no real mystery to Novell’s business (see disclosure below). Most of its legacy product portfolio is just that: a legacy of a bygone era when Novell was king of the networking hill, with a suite of services built up to sustain and advance that leadership. Products like GroupWise and Zenworks, renamed and reorganized constantly to make them appear fresh and new, have mainly sat on the shelf, as financial results demonstrate, quarter after quarter.

[...]

Novell has a rich and varied patent portfolio that touches on everything from core networking technology to office productivity suites and beyond. Novell has patents that cut to the heart of Microsoft’s Office business. Indeed, it has patents that cut to the heart of many different businesses.

There is also a discussion about this fascinating take over at LWN (interesting LWN discussion that continues to develop is about the prior rumour). Steven J. Vaughan-Nichols, who some weeks ago said that VMware should buy Novell, also has an interesting take:

I’m not the least bit surprised that the Wall Street Journal is reporting that VMware will be buying Novell’s Linux business. After all, I suggested that VMware could really use Novell’s SUSE Linux for its future, and I also knew that Novell was in hot and heavy merger and acquisition talks earlier this week. My own sources have also now confirmed that VMware is Novell’s suitor.

One of the Novell-oriented Web sites, abend.org, gives a sample of “Novell buy-out rumors galore!” It includes more than just that stuff about an acquisition, e.g.:

There is a subsequent post titled “Even more Novell buy-out rumors galore!” This contains links mostly to articles we linked to before and also:

Going further back a little, many articles covered the news from the New York Post, including Bloomberg:

Novell Inc. rallied after the New York Post reported that the maker of Linux software has reached an agreement to sell itself in two parts.

This rumour from the New York Post also led to stock activity which got mentioned in financial news, e.g. [1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29]. From that last item we learn that:

Shares of company closed at $5.57 in the previous trading session and opened today at $5.85. NOVL is currently trading at $5.90, up $0.33 (+5.92%) in today’s trading session. The shares of the stock are trading between the range of $5.85 – $5.92. Today’s price change was accompanied by a volume of 17,164,112 shares which is greater than the average volume of 2,961,590 shares.

Some short articles are very focused on Novell [1, 2, 3] not just because of the rumour but also the response:

So far investors are enjoying the story and pushing the stock up on the basis it could go much higher if a deal is to be reached.

Associated Press says that “Novell shares surge on sale rumor” (also here) and OStatic has a discussion about it. The press near Red Hat thought that Red Hat too might be bidding, maybe even IBM:

Red Hat (NYSE: RHT) shares hit a 52-week high of $39.17 in afterhours trading Wednesday night after news broke that Novell may be selling its SuSE Linux business. Is Red Hat going to buy one of its biggest competitors in the Linux open source business?

After so many rumors that Red Hat itself is a takeover target in these frenzied days of high-tech M&A, now the Street talk is the Hatters may be a buyer.

But also think about this: is Red Hat stock moving up since a buyer of SuSE would set a target price for a Red Hat buyer? Hatters’ stock sells at five times Novell’s value already.

More commentary about the rumour can be found in [1, 2, 3, 4, 5, 6, 7].

Having gone though all the above (the former part about VMware’s confirmation and the latter about rumours preceding it), Techrights firmly believes that there is no going back for Novell; a sale of SUSE seems assured, but the prices are still being negotiated and VMware is not guaranteed to be the buyer. In November of 2006 the site “Boycott Novell” was launched and less than 4 years later it seems as though we’re seeing the end of Novell. It’s not surprising that Novell employees are bugging us today, almost as though they look for some kind of revenge or a punch bag. Some of these employees will get absorbed by other GNU/Linux players as the loss of one company is the gain of another. Demand for GNU/Linux is as high as ever, if not much greater. Novell is over, but Novell was never a GNU/Linux company.

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2 Comments

  1. jkcorfy said,

    September 17, 2010 at 11:41 am

    Gravatar

    I am not an employee of Novell, I don’t use SUSE Enterprise, I don’t use openSUSE (although I have tried the LiveCD a couple of times) nor do I use any other Novell product (at least, not since I was in college when I used Novell WordPerfect, but that was the college’s software, not mine), but I am disappointed with this site for never acknowledging the fact that Novell did help Linux beat SCO. That was a rather significant event, and if Novell had been in Microsoft’s back pocket as this site seems to say, it would have been in Novell’s best interest to not get involved.

    Dr. Roy Schestowitz Reply:

    This is a common misconception.

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