While Novell’s ownership of Unix was confirmed by a jury earlier this week, Novell’s future as an independent company, at least in its current form, is far from secure.  With the recent jury ruling, a Novell acquisition could impact Linux vendors and customers.

Novell recently secured a jury decision against SCO pertaining to the ownership of Unix. Here are two relevant questions and answers from Ian Bruce, Novell’s director of PR:

Q: Given that SCO barely exists any more, what is the real relevance of all this?
A: The jury has confirmed Novell’s ownership of the Unix copyrights, which SCO had asserted to own in its attack on Linux. An adverse decision would have had profound implications for the Linux community.

Q: If Novell owns the copyrights to Unix, what does that mean for Linux?
A: We own the copyrights and we will continue to protect the open source community, including Linux.

Consider that Novell’s board rejected an unsolicited takeover offer from investment fund Elliott Associates just two weeks ago.  Novell’s board said the offer “undervalues the company’s franchise and growth prospects.”  However, the board did commit to a review of its alternatives, including an outright sale.

Many IT vendors could be considered as viable candidates for acquiring Novell or part of its assets.  For instance, rumors, jokes and suggestions that Microsoft should or could acquire Novell go back to 2007 and at least one April Fool’s article.  Until now, as Gartner analyst Brian Prentice noted at OSBC, Microsoft’s open source strategy remains muddled as an enabler of other open source firms versus being an open source vendor in its own right.  Acquiring Novell and distributing SUSE Linux would dramatically change that position.  It would also allow Microsoft to differentiate against Red Hat in a way that Red Hat could not match – choice.  Most customers I speak to have heterogeneous systems, so finding a customer that uses Windows servers and Linux servers is the norm, not the exception.  While Microsoft and Novell can, and aim to, jointly address these heterogeneous customers today, a streamlined development, marketing and sales process could benefit customers and Microsoft.  Being April fools, one has to consider the notion of Microsoft acquiring Novell in order to own the copyrights to Unix, which could be used in thinly veiled threats against Linux users and customers.  Personally, I don’t think suing customers is good for business. [Update 2010-04-01: I am not suggesting that Microsoft would or could legally do this. I am not a lawyer. I included this idea because everyone jumps to it when Novell’s future is discussed.  But as @Kirovs comments here, Novell has released the code under the GPL, thereby impacting the legal rights of Novell’s potential acquirer and other Linux vendors.]

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PS: I should state: “The postings on this site are my own and don’t necessarily represent IBM’s positions, strategies or opinions.”

Matt asks the question “Should Sun buy Novell?” which is predicated on the growth of Linux vs. Solaris.  Matt writes:

“IDC predicts that Linux will grow 21 percent year over year in 2009. I’m guessing Solaris isn’t seeing that kind of growth this year…or any time in the future.”


“…(Sun) should double-down on its open-source strategy and fully embrace the operating system to beat in the 21st century: Linux.”

Several thoughts come to mind.  First, the notion of one operating system for any century neglects the history of IT.  Linux, or Windows, or Ubuntu or RHEL or Solaris or AIX is the right answer for 100% of customers in 100% of usage scenarios 0% of the time.  Choice matters.  It always has, always will in the IT market.  Even as the market consolidates, startups emerge to deliver choice.

Second, for Sun to shift from Solaris to Linux would be an incredibly risky proposition in the eyes of customers.  It’s one thing for Vendor X to buy Sun and make that decision.  It’s completely different for Sun to make the decision to leave customers’ Solaris investments out in the dark.  This decision would surely impact the trust relationship between Sun and its customer base.

Lastly, as customers get more accustomed to deploying workloads on hypervisors/clouds, the discussion around Solaris vs. Linux becomes less interesting; and from a Sun standpoint, easily becomes Solaris and Linux.

What say you?

Since having a quick chat with Matt about his view that Dell should buy Red Hat, I’ve been thinking about which vendors could make a play for key open source vendors such as Red Hat, Novell and Sun.

I wonder however, if it isn’t time that we open the aperture and consider suitors from growth geographies (I think that’s the P.C. term now?) such as India and China.

I don’t know much about IT companies in China other than Lenovo, but I trust that there are some large software vendors?  Or has decades of software piracy put a damper on the domestic software market?  But hey, if Dell can be a suitor, why not Lenovo?  Lenovo is seeking to expand its enterprise footprint.  Sun would be a great asset in that effort.  The deal could open up additional routes to market for Sun’s hardware and software, especially open source, in Asia.  In many ways, Sun + Lenovo could be a merger of equals.

Thinking about India, outsourcers such as Infosys, Wipro and TCS come to mind.  These outsourcers have historically been software vendor agnostic with the services that they provide.  However, as IBM can attest, there is no reason that a services vendor can’t also offer its own brand of software.  The trick is to ensure that customers continue to view the outsourcer as software vendor agnostic.  This is actually easier than it sounds.  If the software division isn’t given preferential treatment during engagements, then the division is forced to ensure that their products are competitive.  If Indian outsourcers don’t want to get into the hardware business, which is likely, at least to begin with, then Red Hat and Novell would make for better targets.  The open source products that these vendors bring along could also align strongly with the cost value proposition that these Indian outsourcers rely on.

Maybe these deals won’t happen in 2009.  But, it’s difficult to argue that companies from China & India won’t try to acquire western IT companies.  We’ve seen that Indian and Chinese companies have made acquisitions in other industries.

Paul Krill has a balanced view of the Microsoft-Novell Linux cross-licensing deal from two years ago.  It’s worth a read.  So too are the comments:

Posted by Linux Fan:

“Say what you will about the agreement’s effect on the community, and there are legit issues there, but get the facts straight. Novell’s market share is up significantly since the deal. Schestowitz is just plain wrong on that point. Check IDC’s numbers. Their share of bookings and of server counts is increasing every quarter and it is coming primarily at RedHat’s expense.

Large organizations in particular seem to like the deal. They don’t care about religious FOSS arguments. They want software to work together with as few headaches as possible. It is that simple.”

Posted by Alan:

“I agree with Corrin. It’s unfortunate that all criticism of Novell-Microsoft seems to come back to Schestowitz and BN. There are plenty of reasonable arguments for criticizing MS-Nv, Roy just happens to be making them the loudest and most obnoxiously (and stretching them for all they’re worth).

So you get people like some here who say that “only paranoid crackpots think this is a bad deal, everyone knows it’s good for Linux!”

The way I see it, it’s pretty obvious why the community was upset about the patent part of the deal, especially when you have Novell salesmen telling customers that they’re the only ones who can legally sell Linux (I’ve heard that firsthand from our Novell rep).

Think about it: You’re a FOSS developer. You write software and release it GPL so everyone can use it.

Then Microsoft claims they own it because of patents. Then Novell comes along and licenses your software from Microsoft, in a sense legitimizing their claims of ownership. Now the software that you wrote and released for free is making Microsoft money. Wouldn’t you be pissed?”

Head on over to Paul’s story and have your say.