Analysts applaud Novell-SuSE deal

Analysts have welcomed Novell's plans to acquire SuSE for £125m, saying that the pact will benefit open-source customers unhappy...

Analysts have welcomed Novell's plans to acquire SuSE for £125m, saying that the pact will benefit open-source customers unhappy with Red Hat's latest licensing policy, and help Novell square up to Microsoft in the operating system arena.

Earlier this year, Novell purchased Silverstream and Ximian with the intention of moving all the acquired expertise onto the Linux platform. The missing piece, however, was that Novell, previously an operating systems company, did not have an operating system to sell with Linux, rather they just had layers of software and services.

"It's very good for Novell because they can centre their efforts on a lively growing platform instead of focusing on a platform that is excellent but in decline," said Dan Kusnetzky, an analyst with IDC.

"From SuSE's position, this gives them Novell's channel, partnerships and Novell's funding to help them to become a worldwide player."

The third party to consider here is Red Hat, which announced on Monday that it is discontinuing support of an earlier free Linux version in the hope of getting users to migrate to its enterprise-class software.

Red Hat also has been doing its best to enforce a licence per machine and a service contract per machine business model, which has not been broadly accepted by the open-source community.

Novell and SuSE now have a chance to go to those users who are feeling disaffected because of Red Hat's moves and offer a Linux stack of software without the users having to encumber themselves with Red Hat's licensing.

"The Linux OS market now has a more legitimate Pepsi to Red Hat's Coke, Kusnetzky said. "Now the combination has the strength and experience and history and installed presence in a significant number of the major companies, and they have an opportunity to go after Red Hat's installed base, which is not happy with Red Hat's moves towards the enterprise licensing model." 

John Enck, a server strategies analyst at Gartner, said that the move also helps Novell stack up against Microsoft, particularly after its purchase of Ximian, a provider of Linux server and desktop software.

"Microsoft's major concern these days is Linux and so the combined Novell-SuSE-Ximian really does create a more competitive stack than Novell has. Novell can go head-to-head at the OS level and say 'OK you have Exchange, we have Groupwise, you got file and print and so do we,'" Enck said.

Novell also announced that IBM is to make a $50m investment in Novell convertible preferred stock, and that both companies are negotiating extensions to existing commercial agreements between IBM and SuSE for the continued support of SuSE Linux on IBM's eServer products and middleware products.

Last week, SuSE chief executive officer Richard Seibt refused to confirm talk of a possible takeover by Novell, saying only that "there are lots of rumours out there, and there will be many more. We're doing well, and that attracts attention."

Ed Scannell and John Blau write for InfoWorld

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