06.02.08

Gemini version available ♊︎

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 in other sites/networks: These icons link to social bookmarking sites where readers can share and discover new web pages.
  • Reddit
  • email

Decor ᶃ Gemini Space

Below is a Web proxy. We recommend getting a Gemini client/browser.

Black/white/grey bullet button This post is also available in Gemini over at this address (requires a Gemini client/browser to open).

Decor ✐ Cross-references

Black/white/grey bullet button Pages that cross-reference this one, if any exist, are listed below or will be listed below over time.

Decor ▢ Respond and Discuss

Black/white/grey bullet button If you liked this post, consider subscribing to the RSS feed or join us now at the IRC channels.

DecorWhat Else is New


  1. [Meme] IBM Has Paid ZDNet to Troll the Community

    Over the past few weeks ZDNet has constantly published courses with the word "master" in their headlines (we caught several examples; a few are shown above); years ago this was common, also in relation to IBM itself; clearly IBM thinks that the word is racially sensitive and offensive only when it's not IBM using the word and nowadays IBM pays ZDNet — sometimes proxying through the Linux Foundation — to relay this self-contradictory message whose objective is to shame programmers, Free software communities etc. (through guilt they can leverage more power and resort to projection tactics, sometimes outright slander which distracts)



  2. [Meme] ILO Designed to Fail: EPO Presidents Cannot be Held Accountable If ILOAT Takes Almost a Decade to Issue a Simple Ruling

    The recent ILOAT ruling (a trivial no-brainer) inadvertently reminds one of the severe weaknesses of ILOAT; what good is a system of accountability that issues rulings on decisions that are barely relevant anymore (or too late to correct)?



  3. Links 22/10/2021: Trump's AGPL Violations and Chrome 95 Released

    Links for the day



  4. [Meme] How Corporate Monopolies Demonise Critics of Their Technically and Legally Problematic 'Products'

    When the technical substance of some criticism stands (defensible based upon evidence), and is increasingly difficult to refute based on facts, make up some fictional issue — a straw man argument — and then respond to that phony issue based on no facts at all



  5. Links 22/10/2021: Global Encryption Day

    Links for the day



  6. [Meme] Speaking the Same Language

    Language inside the EPO is misleading. Francophones Benoît Battistelli and António Campinos casually misuse the word “social”.



  7. António Campinos Thinks Salary Reductions Months Before He Leaves is “Exceptional Social Gesture”

    Just as Benoît Battistelli had a profound misunderstanding of the concept of “social democracy” his mate seems to completely misunderstand what a “social gesture” is (should have asked his father)



  8. IRC Proceedings: Thursday, October 21, 2021

    IRC logs for Thursday, October 21, 2021



  9. Links 21/10/2021: MX Linux 21 and Git Contributors’ Summit in a Nutshell

    Links for the day



  10. [Meme] [Teaser] Miguel de Icaza on CEO of Microsoft GitHub

    Our ongoing series, which is very long, will shed much-needed light on GitHub and its goals (the dark side is a lot darker than people care to realise)



  11. Gemini Protocol and Gemini Space Are Not a Niche; for Techrights, Gemini Means Half a Million Page Requests a Month

    Techrights on gemini:// has become very big and we’ll soon regenerate all the pages (about 37,500 of them) to improve clarity, consistency, and general integrity



  12. 'Satellite States' of EPO Autocrats

    Today we look more closely at how Baltic states were rendered 'voting fodder' by large European states, looking to rubber-stamp new and oppressive measures which disempower the masses



  13. [Meme] Don't Mention 'Brexit' to Team UPC

    It seems perfectly clear that UPC cannot start, contrary to what the EPO‘s António Campinos told the Council last week (lying, as usual) and what the EPO insinuates in Twitter; in fact, a legal challenge to this should be almost trivial



  14. The EPO’s Overseer/Overseen Collusion — Part IXX: The Baltic States

    How unlawful EPO rules were unsurprisingly supported by Benoît Battistelli‘s friends in Baltic states; António Campinos maintained those same unlawful rules and Baltic connections, in effect liaising with offices known for their corruption (convicted officials, too; they did not have diplomatic immunity, unlike Battistelli and Campinos)



  15. Links 21/10/2021: GIMP 2.99.8 Released, Hardware Shortages, Mozilla Crisis

    Links for the day



  16. How Oppressive Governments and Web Monopolists Might Try to Discourage Adoption of Internet Protocols Like Gemini

    Popular movements and even some courageous publications have long been subverted by demonisation tactics, splits along unrelated grounds (such as controversial politics) and — failing that — technical sabotage and censorship; one must familiarise oneself with commonly-recurring themes of social control by altercation



  17. [Meme] Strike Triangulations, Reception Issues

    Financial strangulations for Benoît Battistelli‘s unlawful “Strike Regulations”? The EPO will come to regret 2013…



  18. [Meme] Is Saying “No!” to Unlawful Proposals Considered “Impolite”?

    A ‘toxic mix’ of enablers and cowards (who won’t vote negatively on EPO proposals which they know to be unlawful) can serve to show that the EPO isn’t a “social democracy” as Benoît Battistelli liked to call it; it’s just a dictatorship, currently run by the son of a person who actually fought dictatorship



  19. IRC Proceedings: Wednesday, October 20, 2021

    IRC logs for Wednesday, October 20, 2021



  20. [Meme] EPO Legal Sophistry and Double Dipping

    An imaginary EPO intercept of Administrative Council discussions in June 2013...



  21. Links 21/10/2021: PostgreSQL JDBC 42.3.0 and Maui Report

    Links for the day



  22. [Meme] [Teaser] “Judge a Person Both by His Friends and Enemies”

    Fervent supporters of Team Battistelli or Team Campinos (a dark EPO era) are showing their allegiances; WIPO and EPO have abused staff similarly over the past decade or so



  23. 'Cluster-Voting' in the European Patent Office/Organisation (When a Country With 1.9 Million Citizens Has the Same Voting Power as a Country With 83.1 Million Citizens)

    Today we examine who has been running the Finnish patent office and has moreover voted in the EPO during the ballot on unlawful "Strike Regulations"; they voted in favour of manifestly illegal rules and for 8.5 years after that (including last Wednesday) they continued to back a shady regime which undermines the EPO's mission statement



  24. The EPO’s Overseer/Overseen Collusion — Part XVIII: Helsinki's Accord

    The Finnish outpost has long been strategic to the EPO because it can help control the vote of four or more nations; evidence suggests this has not changed



  25. [Meme] Living as a Human Resource, Working for Despots

    The EPO has become a truly awful place/employer to work for; salary is 2,000 euros for some (despite workplace stress, sometimes relocation to a foreign country)



  26. Links 20/10/2021: New Redcore Linux and Hospital Adoption of GNU Health

    Links for the day



  27. IRC Proceedings: Tuesday, October 19, 2021

    IRC logs for Tuesday, October 19, 2021



  28. Links 19/10/2021: Karanbir Singh Leaves CentOS Board, GPL Violations at Vizio

    Links for the day



  29. [Meme] Giving the Knee

    The 'knee' champion Kratochvìl and 'kneel' champion Erlingsdóttir are simply crushing the law; they’re ignoring the trouble of EPO staff and abuses of the Office, facilitated by the Council itself (i.e. facilitated by themselves)



  30. Josef Kratochvìl Rewarded Again for Covering Up EPO Corruption and the EPO Bribes the Press for Lies Whilst Also Lying About Its Colossal Privacy Violations

    Corrupt officials and officials who actively enable the crimes still control the Office and also the body which was supposed to oversee it; it's pretty evident and clear judging by this week's press statements at the EPO's official Web site


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

Recent Posts