Novell News

Oracle announced a free version of its database software today, Oracle Database XE. Novell has worked with Oracle to make sure our customers can experience Oracle Database XE with Novell’s Linux products.

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?

As you hear us talk a lot at Novell about being open and standards-based, it’s worth noting that we are actively involved with many of these standards bodies. On the identity and security side of things we are very active in the Liberty Alliance, OASIS and The Open Group. You may have seen a new committee from OASIS today that has been established to define security policies for Web services, specifically SOAP messages. This is of particular importance to the adoption of federation, as these standards establish trust between business partners so they know that the information they are exchanging is secure. Novell’s involvement in this supports our commitment to security and interoperablity.

I’ve seen it reported in the media that Novell is scheduled to announce year-end results on October 31. Just to clarify…. Novell’s fourth quarter and fiscal year 2005 end on October 31. As is normally the case, the actual announcement of results for the quarter will come three/four weeks after the completion of the quarter. So please don’t expect financial results for our Q4 on October 31! Thanks.

There are all kinds of articles out today on layoffs at Novell. CNET/ZDNet, eWeek, Newsforge, Boston Business Journal and others have run stories reporting a variety of headcount reduction, product and corporate moves. Novell has not made any statement regarding restructuring. The information and allegations in these articles are not based on official comment from Novell. As Jack Messman acknowledged in our Q3 earnings call, we will be making some cost reduction and efficiency moves. When the details of those moves are finalized, we will announce them. Until then, we will not be commenting on what’s out there in the media.Following up on Friday’s post, here’s the BusinessWeek article online.

There’s a feature story in the print edition of BusinessWeek this week on Novell. It’s not online yet, so I can’t provide a URL. The piece echoes recent criticism of Novell from elements in the financial community, but also credits the company’s strategy and highlights the importance of Novell’s success to broader Linux success. My take on the bottom line of the story: The company continues to face challenges in its transition to open source and open standards, but the game isn’t over, and Novell can succeed. Regardless of your take on the substance of the article, the fact that Novell is featured in a BusinessWeek story is, in itself, significant. It reflects Novell’s return to relevance in the IT sector. BusinessWeek wouldn’t write about us if we didn’t matter. If someone has said in 2002 that BusinessWeek would be writing a story on Novell in 2005, crediting our strategy and linking our future success as critical to an important industry trend like open source, most observers would have laughed. We have made strides – big ones. We know there’s more to do. We want to make the next BusinessWeek story one about the success of Novell’s transition.

I like Dana Blankenhorn’s argument about the open source threat to Microsoft. Open source is a development model, first, but it’s also a business model fundamentally altering the economics behind software. Dana highlights the law of mass production, and makes a solid point. But there’s another interesting economic dynamic at play. As more solutions become open source based, we’re moving from a world built on a software licensing model to one built on a subscription model around services and upgrade protection. As Novell’s CEO Jack Messman has said on multiple occasions, this is what we’ve all called “maintenance” in the traditional software world. With the decline in NetWare license revenue over the last several years, Novell has already grown accustomed to living on higher maintenance revenue and declining license fees. This makes the move to suscription revenue under an open source model less disruptive to us than it might be to companies still heavily dependent on license revenues. You can figure out who those companies might be.

SGI has announced a couple of interesting customer wins in the past week, interesting for several reasons, not least of which is their use of Novell’s SUSE Linux Enterprise Server. Sikorsky Aircraft Corporation has replaced UNIX systems with SUSE Linux Enterprise Server running on SGI hardware to help design the latest and greatest helicopters. And Belgian weather wizards are using SGI’s Altix supercomputer running Novell’s SUSE Linux to analyze weather and improve forecasting.

We had a press release out of Australia this week on an Identity Management deployment with St. George Bank. It’s a significant deal because St. George is one of Australia’s largest banks with 2.9 million customers and 7,300 employees. The bank has grown over time through a few mergers and acquisitions, so it was important to them to create a security platform that integrated their different systems and that could be centrally managed. In addition to managing access for employees, St. George Bank will use the solution to authenticate customers and provide them with self-service capabilities for managing their passwords.

HP is increasing its internal use of Linux, and has signed a site license deal with Novell to use our SUSE Linux based solutions. This is pretty exciting news, given both HP’s role in the industry and the sheer size of HP as a company. On a separate note, Matt Asay, who co-founded the Open Source Business Conference and works for Novell, will be a regular blogger on InfoWorld’s Open Resource blog