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Novell Announces Agreement to Acquire SUSE Linux

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Posted: 4 Nov 2003

Heads Up: It's time to take a serious look at Linux. Novell is acquiring SUSE Linux, and will thus become the world's largest supplier of desktop-to-server Linux solutions and technical support. Now you can get worldwide technical support for enterprise Linux solutions from a company with over 20 years of operating system experience. With this smooth move, Novell becomes the only major software company with a Linux distribution and the worldwide technical staff to support it. Read on for the details, then take a short survey and let us know your take on it.

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SUSE LinuxNovell today announced it has entered into an agreement to acquire SUSE Linux, one of the world's leading enterprise Linux companies, expanding Novell's ability to provide enterprise-class services and support on the Linux platform. With the open source expertise of SUSE Linux and Novell's world-class networking and identity solutions and support, training and consulting services, Novell will be able to deliver Linux and all its components -- from the server to the desktop -- and give organizations a secure, reliable and mature Linux foundation. Novell will pay $210 million in cash to complete the acquisition. The transaction is subject to regulatory approval and the winding up of shareholder agreements. Novell expects the transaction to close by the end of its first fiscal quarter (January 2004).

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This latest move follows Novell's August purchase of Ximian, a leader in Linux server and desktop solutions, and further demonstrates Novell's ongoing commitment to provide customers a full range of Linux solutions. Both the Ximian and SUSE Linux acquisitions affirm Novell's commitment to promoting the open source model and developer community.

Novell today also announced that IBM intends to make a $50 million investment in Novell convertible preferred stock. In addition, Novell and IBM are negotiating extensions to the current commercial agreements between IBM and SUSE Linux for the continued support of SUSE Linux on IBM's eServer products and middleware products, and to provide for product and marketing support arrangements related to SUSE Linux. Both of these agreements will be effective when the acquisition of SUSE Linux by Novell is completed.

"Responding to customer demands for open, standards-based computing, Novell has been dedicated to a cross-platform vision for four years now, and Linux is an increasingly important part of that strategy," said Jack Messman, chairman and CEO of Novell. "The acquisition of SUSE Linux will complete Novell's ability to offer enterprise-class Linux solutions to our customers from the desktop to the server. No other enterprise Linux vendor has the operating system experience and the worldwide technical support capabilities that Novell will be able to deliver. Novell is bringing our significant resources to bear to help customers adopt Linux with more confidence, giving them the freedom of choice Linux provides without the anxiety over whether an open source solution can truly be relied on for mission-critical functions."

"Novell understands the power of open, standards-based computing, and has been moving in that direction for some time," said Richard Seibt, CEO of SUSE Linux. "Novell's global reach, marketing expertise and reputation for security, reliability and global enterprise-level support are exactly what we've been seeking to take SUSE Linux to the next level. We've also been impressed by the incredible loyalty and competence of Novell customers and business partners, and we're looking forward to joining forces to help customers gain the benefits of Linux and to help Novell continue to expand its role in the open source community."

SUSE Linux Offerings Complement Novell Linux Services

SUSE Linux offers a range of Linux server and desktop solutions designed to meet the diversified needs of different organizations. SUSE Linux Enterprise Server 8 for midsize to large companies provides a range of core networking services with the high-availability and scalability features needed for mission-critical environments.

SUSE Linux is the leading enterprise Linux company in Europe. In addition, through its relationships with Conectiva and Turbolinux, SUSE Linux has been a leader in Latin America and Asia, as well. SUSE Linux is also one of the top providers of Linux to enterprises in the United States and North America. Novell's extensive global sales and channel programs, proven and reliable technical support capabilities, as well as ongoing Novell and SUSE Linux relationships with key partners like IBM, Oracle, SGI, Fujitsu-Siemens, Dell, Intel, AMD, SAP, HP and others, provide a powerful business network to promote more rapid Linux adoption around the globe.

Novell's Linux Strategy

The acquisition of SUSE Linux will be an important step in Novell's efforts to accelerate enterprise adoption of Linux. Novell began building solutions for Linux in early 2000, when it made its flagship eDirectory technology available on Linux. In April of this year, Novell announced it would make all the services that run on its NetWare operating system run on both the NetWare and Linux kernels in the future with the full range of Novell's worldwide technical support. In August, Novell acquired Ximian, with its leading Linux desktop management solutions and its visionary leadership to promote Linux desktops and to enable Microsoft .NET* applications to run on Linux.

In September, Novell announced the open beta of Novell Nterprise Linux Services (NLS), an offering that runs on SUSE Linux and Red Hat* and provides a variety of networking services for Linux environments. IBM, HP and Dell have all licensed the NLS technology for resale to their customers. With SUSE Linux, Novell expands its reach to developers and ISV's looking for a complete Linux solution. Today's announcement of Novell's plans to acquire SUSE Linux strengthens Novell's already proven set of Linux offerings by allowing Novell to distribute the underlying Linux platform itself, in addition to the many valued-added services for Linux that Novell already offers.

"We chose SUSE Linux because they are a clear market leader in Linux technology for the enterprise," Messman said. "With this acquisition, Novell will be the only billion-dollar software company with a Linux distribution and a worldwide ecosystem around it. A worldwide technical staff of over 600 has been trained to support Linux. The acquisition of SUSE Linux completes our technology stack from the desktop to the server."

Beyond the technology, the acquisition also will expand Novell's strategic commitment to the open source community. The combination of SUSE Linux and Novell will deliver not only complete enterprise Linux software solutions, but also worldwide channels and industry-leading partnerships. The combined company will help promote a thriving, global open source ecosystem that creates innovation and choice for developers, users and organizations alike. Novell is firmly committed to open standards and maintaining the existing open source kernel development efforts. From advocacy and development resources to events and support of open source efforts like kernel projects, XFree86, ReiserFS, KDE, GNOME and Mono, Novell stands side-by-side with the open source community.

Press Conference Invitation

Novell and SUSE Linux will hold a press conference today (4 Nov) at 11 a.m. EST (5 p.m. CET) to discuss the transaction in greater detail. The press conference can be heard live at

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Novell, NetWare and Ximian are registered trademarks; eDirectory, exteNd, Nsure and Nterprise are trademarks; and Ngage is a service mark of Novell, Inc. in the United States and other countries. SUSE is a registered trademark of SUSE Linux. *All third-party trademarks are the property of their respective owners.

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