Bonum Certa Men Certa

Novell's SUSE Believed to be Bought by Former Microsoft Executives

"We are going to cut off their air supply. Everything they're selling, we're going to give away for free."

--Paul Maritz, former Microsoft Vice President, referring to Netscape




Paul Maritz
Photo by former Microsoft evangelist Robert Scoble



Summary: Several former Microsoft chiefs (now running VMware) may soon own the second-largest server distribution/product built with GNU/Linux, which is also a source of revenue to Microsoft

NOVELL'S market position has been weakening for years and its market cap falling to dangerous levels. News sources say that Novell is about to be acquired and it's primarily one source that all the reports rely on. "Why would Novell announce sale in 6 weeks," gnufreex asked. "You announce deal when it is done... And when it is definitive... They are just trying to pump stock... They have nothing." Agent Smith" wrote: "Novell being sold in parts. What will become of OpenSuse ???" (more details in the IRC logs we'll publish later).



“They are just trying to pump stock... They have nothing.”
      --gnufreex
gnufreex said that "maybe Novell is pumping it [the stock] to buy time. Their Market Cap was 1.9b yesterday. If it slides more, they can't get same offer as they got from Elliot... Shareholder would sue for refusing Elliot offer... If market cap goes under 1.9B...

"What I meant is that Novell is getting panicky because their market cap is sliding below the level it was when Eliot made them an offer. If it falls bellow that level, then buyers are going to offer less than Elliot offered. And shareholders might sue because they got the worse deal because Hovsepian turned down Elliot offer without letting shareholders vote (there was no vote about Elliot)"

"Agent Smith" wrote: "Received tweets hinting VMware's the mystery buyer of Novell Novell Sold to VMware"

We'll come to this in just a moment.

First of all, here are some more reports about Novell closing its sale (following a split). The following is everything we've found on the Web so far, without exception:

Novell breakup and sale imminent, says report

Commercial operating system maker Novell is close to selling itself off after breaking it into two bits, according to the is New York Post.

Citing unnamed sources, the Post says a "strategic buyer" will shell out cash to acquire the SUSE Linux business that Novell paid $210m for in November 2003. That Linux business has just finally made it to break-even, according to Novell, and will by our estimates generate maybe $145m in revenues in fiscal 2010. (Novell brought in $108.2m in Linux platform sales in the first nine months of fiscal 2010 ended in July).


Novell Agrees To Sell Itself In Two Parts, N.Y. Post Reports

Novell nearing sale, says report; shares rise (Reuters)

"Shares of Novell jump 6% on buyout report," said a Microsoft booster (the SCO booster wrote about it too):

Shares of Novell jump 6% on buyout report



[...]

The New York Post, citing unnamed sources, said the struggling business software maker plans to sell the company to a "strategic buyer" and a private equity firm.


To say more about the stock: "Shares of Novell Inc. (NASDAQ: NOVL) rallied more than 6% in pre-market tradng after the New York Post reported that the business software maker has reached a deal in principle to sell itself in two parts, and is three to four weeks away from signing a deal."

Also: "Novell Inc (NASDAQ: NOVL) soared 5.03% to $5.85 in the pre-market trading. NOVL's trailing-twelve-month gross margin is 78.54%."

One financial report summarised it as follows: "Novell Inc. (NOVL US): The maker of Linux operating-system software has reached an agreement in principle to sell itself in two parts, the New York Post reported, citing people close to the process."

Financial news from prior days indicated problems for Novell [1, 2, 3], but not everything was pessimistic [1, 2].

Red Hat's Jan Wildeboer wrote: "Big things are coming up. Nuff said. And no, it is not Red Hat being bought."

People still send us messages asking something along the lines of, "what about OpenSUSE?" The project should take a lesson from OpenSolaris and take action before Novell (or its acquiror) does. We urged OpenSUSE people to fork and escape the relationship with Novell, which may no longer exist very soon.

What happens to Mono and Moonlight? Maybe Microsoft can have them (no, it's not a joke).

The LWN discussion had just one comment at the time of writing and it said: "The WallStreet Journal has the rumour that the buyer of the GNU/Linux part might be VMware Inc.

"I don't know much about VMWare Inc., but at first glance they seem ok. Not too likely to pull an Oracle.

"Anyone got more info?"

Here is the article which suggested that VMware is afoot (Maritz and fellow executives from Microsoft). Rather than Microsoft buying SUSE as some people speculated very long ago it may be Microsoft executives who take control of SUSE and harm it or sell it at Red Hat's expense (with Microsoft tax). Only a couple of weeks ago we found articles like this one:

Some people might be surprised to hear that that vCD is based on RHEL v5 U4 and not on Novell SUSE. You might know that VMware recently decided to standardize on Novell SUSE for all its virtual appliances, and an OEM deal was struck between the two companies. The operative word here is "recently." Sadly, the deal was struck at such a time that VMware could not use Novell SUSE for vCD. Merely from a standardization perspective, I would like to see that change at the next release of the product, but I think we will have to wait for the vCD 2.0 offering before that transpires.


At around 3:50 of the following video the same subject gets covered.



The idea that VMware might buy Novell is not new at all as it has been floating for months and never quite denied or debunk (not convincingly anyway).

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