In-Depth

Novell's Acquisition of Big Iron SuSE Leaves Users Cautiously Optimistic

Novell's track record with high-profile acquisitions is spotty, but users we spoke to believe IBM's $50 million investment in Novell is encouraging.

• By Stephen Swoyer
• 11/11/2003

After all, Provo, Utah-based Novell doesn’t exactly have a good track record with respect to some of the high-profile acquisitions that it’s made. The company’s prior forays into the desktop productivity (WordPerfect) and Unix (AT&T Unix) markets, for example, never quite panned out. Just as important, Novell’s attempt to reposition itself as a Linux vendor doesn’t exactly inspire confidence, either: The former network operating system champ has been reinventing itself for almost a decade now, with mixed results.

Yet the mainframe users of SuSE’s Linux distribution we surveyed are cautiously optimistic about the deal. Many said that Novell’s track record doesn’t necessarily have any bearing on how it executes this time around, and most cited IBM Corp.’s $50 million investment in Novell as an encouraging sign.

Take one former employee of Big Blue, who currently works with an IBM business partner helping customers get up and running on Big Iron Linux. He concedes that Novell has had a lackluster track record with respect to its prior acquisitions and reinventions, but says that this may not have been entirely the company’s fault. ”I remember reading an article [or opinion piece] recalling how badly Novell had managed acquisitions like WordPerfect and Unix. So one might fear that the same will occur with SuSE,” he acknowledges. “But is it really the same thing?” he wonders, adding that “WordPerfect was doomed anyway [by Microsoft] Office and Unix [by] Linux.”

A Big Iron SuSE user with a prominent publishing conglomerate says although there’s been some speculation Novell picked up SuSE simply to staunch the flow of its market share away from NetWare and toward GNU/Linux, he believes the company is sincere about becoming a committed Linux player. “I don't believe Novell is capable of squandering such an opportunity as this,” he comments. “Novell will direct efforts into enterprise products that run on SuSE, and continue to strive for service [and] support market share and revenue. Nothing else makes sense.”

This mainframe professional also believes the acquisition will benefit both Novell and SuSe. “As for Novell's decline over the years, the resources gained in the acquisition are clearly a boon for Novell, and should breathe new life into the company. As customers migrate to ‘Novell solutions’ running on SuSE [and] UnitedLinux platforms, SuSE stands to be on better ground too.”

Not everyone takes a wholly innocuous view of the acquisition. A mainframe systems programmer with a large regional utility company says his perception of Novell was shaped by the operating system wars of the late 80’s and early 90’s. At the time, Big Blue’s OS/2 network operating environment was battling Novell’s NetWare and Microsoft’s nascent Windows operating systems for ownership of the corporate LAN, even as mainframe professionals struggled to keep an ascendant NetWare out of the data center. “We won that battle but lost the war when Bill Gates put on his Darth Vader costume,” he laments.

Since then, he continues, he’s been unimpressed with Novell’s level of commitment to subsequent strategies, such as its Unix and Novell Directory Services initiatives. “Nobody at the top had the vision or guts to say ‘NetWare is dead. UnixWare is the only way to fight Microsoft.’ They probably would not have won, but they would have had a fighting chance,” he says, adding: “It was sad to see Novell decide its future was to be an ‘Enterprise Directory’—talk about lowering your sights.”

Even though his company is a Red Hat 10 shop, this systems programmer says that as a result of his involvement with a Linux-390 listserve, he’s come to believe that SuSE understands Big Iron better. As a result, he takes a slightly dim view of the acquisition. “Monitoring the list for the last six months or so, I got the impression that SuSE understands us big iron guys better. I'd mark Novell's acquisition as a small weight in the negative column.”

Regardless of how well Novell executes the acquisition, Gordon Haff, a senior analyst with consultancy Illuminata, speculates that most Big Iron SuSE users will be insulated from unwelcome fallout, largely because IBM has taken such an important role in fostering the development of SuSE’s Linux distribution in mainframe environments. “I think [Big Iron SuSE is] probably more of an IBM function than it has been a SuSE function, and obviously, IBM has also made a significant investment in Novell,” he says. “SuSE is very important to IBM, and I certainly interpret IBM’s investment here as a move to allow IBM to exert control here as it sees necessary.”