Novell Cool Solutions

To lock or not to lock?



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October 27, 2005 2:34 pm

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There’s a story on CNET reporting on Matthew Szulik’s conversation with Geoffrey Moore at Vortex. I wonder if Szulik’s emphasis this week on avoiding lock-in has anything to do with the BusinessWeek article (see last Friday’s post) on Novell. Red Hat got credit in that piece for its growth, but also was positioned as potentially too dominant in the Linux arena: “The worry is that Red Hat will become just as dominant in Linux as Microsoft has become with its Windows operating system. That would eliminate one of the key attractions of Linux, and may make corporate customers less willing to rely on the operating system for their servers.” Needless to say, that’s not something Novell wants to see. We have consistently argued that competition is good for any market, including commercial open source. Both hardware vendors and ISVs prefer competition in any market segment to prevent one vendor for exercising too much market power (IBM says as much in the BusinessWeek piece). Ultimately, of course, it’s customers who benefit from competition, since they get better technology at better prices. What do people think on this issue? Do market forces “guarantee” competition in the Linux arena or could there be a Linux Microsoft?

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Categories: Expert Views, PR Blog

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19 Comments

  1. By:Neil Ritchie

    Competition, and more importantly, choice is a good thing. I was talking to a Microsoft-trained colleague about the strength of open source and the importance of choice, no matter what the alternatives are. We both reached agreement that a Microsoft-only world would be frightening – just imagine doing business where you know that every other competitor, supplier or partner is using the same products as you; resulting in a world where everyone is exposed to the same risks, security holes & urgent patching. What if one major flaw existed that could bring down over 90% of businesses? Scary thought. More choice is good!

  2. By:George

    http://www.linux.org/dist/list.html lists 369 different Linux distributions. That’s a surfeit of choice. However that would seem to undermine the contention that Novell is a necessary counterweight to Red Hat.

  3. By:Anonymous

    Yep, there’s no question that there are plenty of Linux distros out there, many of which are of good quality. But I’m talking about commercially successfully distros, meaning, essentially, distros that have the combination of support, training, technical features, indemnification, and other things that will get companies to pay money to a vendor, as opposed to downloading a free distro. Today, it’s generally acknowledged that Novell and Red Hat are the two leading commercial distros, based on global revenue. Presumably, this is being driven by the desire of the market to have choice in the commercial Linux space, while also avoiding too much fragmentation, a’ la Unix.

  4. By:George

    RE: “But I’m talking about commercially successfully distros, meaning, essentially, distros that have the combination of support, training, technical features, indemnification, and other things that will get companies to pay money to a vendor” – Sounds like a good strategy. Where’s the execution?
    India’s Canara Bank just announced that it’s migrating 1000 servers and 10,000 desktops from netware/DOS to Redhat Linux.
    http://www.infoworld.com/article/05/10/17/HNindianbanklinux_1.html
    Where are the equivalent wins of the larger player, Novell?
    Furthermore, if scale matters, Red Hat’s bulking up while you are apparently about to reduce headcount. These trends imply that your theoretical strategic advantage is eroding, unless you can rapidly alter the situation.
    I hope to see some dramatically improved figures regarding Linux server and seat sales, client wins and perhaps upstack sales in the coming weeks.
    A win outside of the Netware install base would be welcome. I think that poaching a significant Red Hat or Microsoft client would be something that’s fair to expect by this point in the game. After all, they’re both poaching your clients.

  5. By:Jacob

    I think that Novell Inc is in the perfect position again, they are given a chance to take a good deal of the Linux marketshare. I think that the playing field is fair as of now. I want Suse to come out ahead because I like it best, but, as long as the competition is not more innovative. Novell has a bigger engineering base, and Netware has been around longer, we will just see who the better businessmen are.

  6. By:Anonymous

    One takeaway from Red Hat that Jack Messman mentioned in our last earnings call was Bear Stearns, but they aren’t a press reference, so you won’t see stories on that. We’ve had some success with Microsoft takeaways (here’s a recent one), as well, although most moves to Linux that we’ve seen, consistent with industry analysts reports, are from Unix.

    As for relative size vs. Red Hat, Novell has 5,800 employees. We have about as many folks in our support organization as Red Hat has employees. I don’t see Red Hat matching our global reach or size soon.

    Unlike Red Hat, we’re doing a complex transition to open source, while at the same time trying to keep our large installed base of customers happy. That’s why we put a lot of engineering resources into OES over the last year and a half. And we’re seeing uptake on that product – $31 million in revenue in the last quarter, as we reported. If you combine this revenue with the standalong SUSE Linux Enterprise Server revenue and other Linux revenue (i.e., retail), you get to $44 million in Linux related revenue for our last quarter. In the year ago quarter, that revenue was $12 million.

  7. By:George

    Your point regarding Bear Stearns is well taken. I assume that ‘not a press reference’ means that the customer is restricting your ability to market this win.
    However, the Microsoft win that your comment links to is not quite the order of magnitude I had in mind. A Fortune 100 firm that committed to a long term strategy of deplying your Linux server platform + Upstack goodies such as directory services, Ifolder, etc. is the kind of win that I think would really shift perceptions and build momentum around Novell. I’d love to see a couple of these kind of wins.
    As far as OES, isn’t the reported figure of $31 million misleading since it combines both Netware and Linux deployments in ratios that you can only guess at?

  8. By:Anonymous

    The trick is getting folks to go public. But I understand your point. On OES, yep, it’s a hybrid product. But the point is, people are buying it, meaning it’s introducing Linux into customer environments and giving them an easy migration path to Linux. Much easier that switching from NetWare to Windows. This is all part of the strategy that we’ve had to roll out with a fair amount of deliberation, both to make sure we got the technology right and to not scare away our customers by suggesting a forced migration. Novell’s customers have been looking for a viable future platform path for some time. OES gives them that. And it’s not just Linux they get. It’s Linux, plus all the services (identity, messaging, iFolder, iPrint) that they’ve known and like on NetWare. It’s a pretty cool product.

  9. A little off-topic.

    Can you please articulate Novell’s Produt Roadmap for NetWare? I can’t get a straight answer from anyone at Novell on this.

    Thanks!

  10. By:Anonymous

    As we have talked about before, the future of NetWare lies within Novell Open Enterprise Server. As we touched on in this announcement, in the next version of Open Enterprise Server, a para-virtualized version of NetWare will be included, running on a Linux foundation. Like we said then, “Novell customers can continue to leverage their NetWare investments while gaining new options with Linux to run their advanced services and applications, with little or no disruption to their current IT environments.” Meanwhile, we continue to provide NetWare 6.5 and periodic support packs as a stand-alone product, and will offer it as long as customers demand it.

  11. So in other words, there will never again be a stand-alone NetWare kernel (especially given the fact that one of the NetWare kernel developers got laid off), and Novell’s direction is to eventually move everyone from the NetWare kernel to an all-Linux world, as soon as the services offered on the Linux kernel are finally up to par as the NetWare kernel.

    IOW, as soon as Linux is “ready”, NetWare is over at Novell.

    Is this correct, or can you not talk directly to that? Please don’t repeat Talking Points or re-post a cannned response. I think we deserve it.

    Respectfully,

    – Duane

  12. By:Anonymous

    Talking about product futures is a signficant, material event. What Kevan posted earlier is the current corporate position. We’re not going to say something on the blog that is different from that because 1) it’s accurate and 2) doing so would get us in a lot of hot water. We’ve been consistent about supporting our customers. We’re driven by customer demands. We’ve seen a decline in NetWare for a number of years now, even though it’s universally considered great technology. But we’ve still got a lot of NetWare users out there. OES allows NetWare users to continue to use the NetWare services they know and love, on the NetWare kernel, but also tap Linux, if they want to. At their own speed.

  13. Bruce,

    I appreciate the position you are in.

    It wasn’t so long ago that Novell was proud to give Product Roadmaps for nearly all of Novell’s products, including NetWare, GroupWise, etc.

    Remember BrainShare 2002 when Novell announced “Nakoma”,”Hayden”, and “Uinta”?

    Here’s a news snippet from that BrainShare:

    “While BrainShare was a stage for many announcements, such as the firm’s vow to improve its marketing [gee, where have we heard that before!], for existing users the more vital information involved the company’s outline for the future of its NetWare and eDirectory products.”

    All I’m asking is what’s beyond the current release? What’s next?

    This is so frustrating when trying to hold customers to the promise of “staying with NetWare”, when Novell won’t even state its’ future.

    When you state, “OES allows NetWare users to continue to use the NetWare services they know and love, on the NetWare kernel, but also tap Linux, if they want to. At their own speed.”

    All Novell documentation regarding OES is to migrate to Linux, with very little mention of NetWare. These are very mixed messages.

    Again, I understand the position you are in. Reciprocally, you need to understand how this lack of communication is affecting Novell’s customers, channel partners, developers, and thus, the bottom line known as “revenue”.

    Do you understand my point of view?

    Respectfully,

    – Duane

  14. By:Bruce Lowry

    Duane – I understand your point of view. It’s fair for customers to want to know product direction. There will probably always be some disconnect between what a company can provide in terms of detail on product futures and what customers want to know. This is partly for competetive reasons and partly the nature of the software business, which, as you know, if pretty fluid. We feel we provided Novell customers with a good sense of where we were going with NetWare when we rolled out the plans for OES. That product involved a lot of complicated technical work over the last couple of years. We are encouraged with the uptake, because it shows that Novell customers – NetWare customers – are seeing value in OES. As Kevan said earlier, we’ve provided some indicators of areas of focus in OES going forward. Clearly, this isn’t providing the level of detail you seek. We do our best to keep customes, partners, and the Novell ecosystem as informed as we can. Obviously, it’s in our interest to do so. Where that’s not happening, all we can do is keep trying.

  15. Bruce,

    Did the customers also demand that Novell kill off the NetWare kernel in favor of SUSE Linux and run NetWare as a “virtual machine”?

    How have the partners and developers responded to this radical change?

    I know of at least one developer / partner who is very surprised to hear it and is pretty upset.

  16. I really don’t mean to be a thorn in your side, Bruce – all I want is a straight answer to a very pointed question, and I can’t seem to get anyone from Novell to answer it.

    One more thing if you please:

    “Novell Open Enterprise Server Evaluation Kit” at
    https://www.novell.com/products/openenterpriseserver/evalkit.html

    Has the lead caption of: “Cross the Bridge from NetWare to Linux. We’ll Pay the Toll.”

    Now, please tell us all again how NetWare is going to continue to be developed.

  17. By:Anonymous

    Duane: I’m not sure a continued dialogue on the blog is going to resolve this. We’ve been straightforward in describing what we’re doing with NetWare in OES. OES is the future of NetWare. We said before there won’t be standalone versions of NetWare going forward. In reponse to your question of whether it was customers who asked us to make the moves we have, the answer is, ultimately, yes. Customers have been voting with the dollars. NetWare revenue has been declining at double digit rates for a number of years. The main concern expressed to us by NetWare users was that they didn’t see a future path for NetWare and were concerned that sticking with NetWare would put them in a corner. And that was despite our putting in great new services like iPrint and iFolder in NetWare 6. It was customers that told us that putting NetWare services on Linux would be a good move by Novell. These services weren’t available on existing Linux distributions. So we devoted a lot of time and development resources into putting NetWare services like iPrint, iFolder, and more onto Linux. The result is OES

    Most customers are interested in what the solution can do for them. If they can get the same services they got on NetWare, but on Linux, that works for them. Plus Linux provides an application platform that NetWare, for all its strengths, doesn’t deliver. We’ve grown our ISV partnerships in a huge way over the last year and a half becuase of the Linux offerings. So our developer and partner network is much stronger than it was prior to our Linux moves.

    We are protecting our customer investments in NetWare while providing a path forward to Linux. We believe this benefits customers.

  18. “We are protecting our customer investments in NetWare while providing a path forward to Linux. We believe this benefits customers.”

    Bruce – I guess I’ll take that as Linux being Novell’s future. That’s ok – all I wanted was an answer.

    Moving on to a different subject, do you know when Novell will create a Client for Windows XP 64-bit edition? I’ve got some clients who would benefit from this, and getting an answer from Novell on this is just as difficult to get on the prior subject.

    Thanks!

  19. By:Anonymous

    We do intent to do create a client for 64 bit Windows, but don’t have a timeline yet.

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