Bonum Certa Men Certa

Selling Out to Microsoft Did Not Pay Off For Novell

Novellsoft



We will soon publish the 2,500th post in this Web site. It has become clear that focus has shifted somewhat since the Web site was launched by Shane. Looking back, Novell deserves less trust than ever before.

Since the very beginning, it was believed that Novell and Microsoft would grow closer. This has pretty much been confirmed since then, especially with remarks from Novell and even placements on the Web sites of the two companies (mutual promotion and advertising). In many ways, Novell and Microsoft are like Intel and Microsoft, or Citrix and Microsoft. They thrive in this 'orgy of money' and mutual protection/kickbacks (in the sense that the companies serve each others' interests at the expense of all others).

“It may sound like Novell found itself in a marriage of convenience.”What this leaves us with is this opportunity to analyse not only the bond between Microsoft and Novell, but also various similar relationships that are reminiscent of that which Novell is in with Microsoft. Notably, there are several alliances and even an approach towards Free software projects which mimic the Novell deal. The intention there is to distract, to have rivals assimilated and to guide -- preferably from the inside -- the direction of companies which Microsoft hopes to make money from, typically at the expense of platforms like (Open)Solaris and GNU/Linux.

It may sound like Novell found itself in a marriage of convenience. It may seem as though Novell will play the role the fat cat sitting on the lap of an affluent householder. But it isn't quite the case. Like all Microsoft partners, they tend to get 'screwed'.

Matt Asay shows that the deal with Microsoft did not exactly have a wonderful impact on Novell's share value.

By mid-2004, however, Novell's stock price settled into the $6 to $8 per share range that it has maintained for the past four years. Analysts have waited for Novell's Linux and open-source story to fully materialize. Despite Novell's hype on the importance of its November 2006 patent agreement with Microsoft, the agreement has had no lasting impact on the value of the company. It helped to lift Novell's stock price in 2007...only to see it crumble back to the too-familiar $6 per share level.


We saw some analysts blindly praising Novell, but the claims were not backed by compelling evidence (nor were they justified and validated by actual positive performance).

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