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Novell missteps not affecting SuSE

As rumors fly that Novell may be tightening its budgetary belt, analysts and users seek to diagnose what a weakened SuSE could mean to the Linux community.

Novell layoff rumors swirled this week, but analysts were quick to dismiss any doomsday scenarios involving the SuSE Linux operating system.

Current users of SuSE should not panic even if the 20% workforce cuts cited in recent news reports come to fruition, said Charles King, principal analyst for Pundit-IT Research, Hayward, Calif.

To date, the official response from Novell Inc. has been that it does not comment on rumor or speculation, but the company did state in a conference call this month that "some cost-cutting moves" were on the horizon.

Even in the unlikely event that Novell does fold, King said, the SuSE Linux brand is attractive enough to be picked up by another vendor.

"I don't see Novell going anywhere anytime soon, but if [they] bobble this, I see it reflecting more badly on Novell than on SuSE," King said. "Then, if Novell can't get it together, SuSE may be an interesting bit for another vendor to acquire."

If that happened, King continued, Novell CEO Jack Messman would probably be looking for another job. However, the popular SuSE Linux distro -- which has consistently ranked third on the distro ranking site -- will continue to retain user support, he said.

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Old concerns, new forms

November will mark two years since Novell announced its intentions to acquire SuSE Linux AG and set the Linux and open source community abuzz in the process.

Back then, users were generally pleased with the news that Novell would be taking over the reins for SuSE.

There were also those like consultant Kenneth Milberg, however, who said the news was positive for open source but cautioned that Novell's spotty history with WordPerfect, NetWare and UnixWare could hurt SuSE.

Today, if the layoff rumors are realized, it appears that the concerns of consultants like Milberg could be partially correct, King said. While Novell could suffer after making layoffs, he believed SuSE could endure because it has a well-established user base and a devoted community of code contributors in its OpenSuSE project launched by Novell last month.

The OpenSuSE project combines contributions from the open source community with versions of Novell SuSE Linux. The most recent distro, SuSE Linux 10, was released in early October.

Tony Iams, a vice president and senior analyst with the Rye Brook, N.Y.-based Ideas International, agreed with King's assessment that Novell and SuSE shouldn't suffer much at the hands of its users should harder times arrive in the next few months.

"I would be less worried about community relations; there's no ill will toward Novell," Iams said. "If you're in the OSS [open source software] business, you need to maintain strong relations with the community, but that's not where the problem's been -- it's been with their business ventures."

Users should not be worried much by these transition pains at Novell, Iams said, and should instead focus on the fact that the SuSE platform has consistently been considered a technologically superior Linux distribution, especially in the small and midsized business (SMB) space and desktop environments.

"Novell has invested a lot in the technological innovations that are necessary to really succeed in that kind of environment, and, of course, they have a strong, loyal base of NetWare users -- many of whom are very interested in Linux right now," Iams said.

Even if layoffs occur, the cultural clash that existed at Hewlett-Packard when it acquired PC manufacturer Compaq will not repeat itself, he said.

Focus: NetWare

It is in the NetWare customer base where Novell may have taken the hit responsible for this month's media speculation that layoffs and shakeups are imminent, both analysts agreed.

NetWare is Novell's signature network server operating system. Initially, very successful in installing its products in large and small office LANs, Novell has redesigned NetWare to work as part of larger and heterogeneous networks, including the Internet.

In March, a report released by Yankee Group senior analyst Laura DiDio was highly critical of Novell's approach to NetWare. The report, which surveyed 100 existing Novell customers, found that eight out of 10 would migrate from NetWare to Windows by 2006 and that the product was widely panned by users and dismissed by Messman at the Novell BrainShare event.

Even as Novell promoted strong internal NetWare numbers, Iams said it was fair to criticize the vendor for focusing its efforts more on NetWare than on acquiring completely new customers interested in the Linux operating system.

"[It] is a fair point, but, on the other hand, that's the low-hanging fruit, the installed base. Going up the line to new customers [is] something that Novell has been doing but certainly they have much more competition there," Iams said.

The competition is market leader Red Hat, which, according to Iams, has been making steady inroads into ground held by NetWare. The most recent NetWare loss for Novell came this week as Red Hat signed a deal with India's Canara Bank to provide software for 10,000 desktops and 1,000 servers.

Silver lining

Even as Red Hat makes these inroads, however, the silver lining for Novell could be what Iams described as a strong showing in the SMB and desktop space.

Novell has made no secret of its plans to attack the SMB market. The company last year rolled out the Market Start program, designed to accelerate open source adoption and provide SMB access to the Novell open source infrastructure.

"The part that is most interesting to me is that [Novell] has had a strong base in the channel that derives from their NetWare business," Iams said. "These are channel partners that have been very effective at driving Novell products in the SMB environment, and have been much more successful than enterprise-level Red Hat."

If Novell were to make cuts, however, there are those in the Linux community who would not see it as an indicator that Red Hat would become too powerful or a "Microsoft" of the open source world.

David C. Niemi, a consultant and longtime user of Linux, believes there was no chance Red Hat would become too strong for its own good should Novell weaken.

"It is a common occurrence for certain people to predict that Red Hat will turn into a Microsoft. It resurfaces whenever Red Hat does anything remotely controversial or even when Red Hat seems to be getting particularly successful," Niemi said. "I think this is a very silly idea, as Red Hat is through-and-through an open source company and would have to turn over 90% of its staff to change that."

Another user, Russell Pavlicek, a senior Linux architect at San Jose, Calif.-based Cassatt Corp., said the nature of open source would not allow one company the luxury of a monopoly.

"A competitor does not have to create an entire operating system, but instead create added value. The operating system is free for all to use, including potential new competitors. The challenge is not to compete with years of engineering, but to compete with customer value.

"In essence, any organization can become a competitor if they can find the business niche which needs filling. Any open source company that rests on its laurels will soon be challenged by a company which is hungry and filled with better ideas," Pavlicek said.

So, if Novell flounders, Pavlicek said, it does not leave Red Hat without competition -- it leaves a hole for a new competitor to fill some need that Red Hat might be overlooking.

"A successful open source company needs to focus on the business of making technology work for the customer, not on the business of just making technology," Pavlicek said. "The latter can breed monopolies, while the former can breed customer value."

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