Sun, Novell to Merge?

 
 
By Peter Galli  |  Posted 2004-08-02 Email Print this article Print
 
 
 
 
 
 
 

Sun considers making a move to acquire Novell—what would that mean for IBM?

Sun Microsystems Inc. is considering making an attempt to acquire Novell Inc., a move that would have enormous repercussions for competitor IBM. In an interview with eWEEK, Sun President and Chief Operating Officer Jonathan Schwartz acknowledged that the Santa Clara, Calif., company is considering making a move to buy Novell, saying that such a move could ultimately force Big Blue to depend on Sun for its Linux operating system.
Read why Linux & Open Source Editor Steven J. Vaughan-Nichols is telling Sun and IBM to quit their open-source posturing.
"Now that the Linux movement in North America on the server side has become the Red Hat movement, IBM has a problem as the bulk of the Linux deployments in this country are on Red Hat," Schwartz said. "Now that they [Red Hat] are supporting an application server, IBM now finds Red Hat competing against it in its installed base," he said, referring to reports last week that Red Hat is expected to start selling a subscription service supporting an open-source Java application server.
Those reports follow a Red Hat announcement earlier this year that it planned to start selling subscription services supporting Jonas, an open-source Java application server built by the French consortium ObjectWeb. Red Hat is planning on selling support services for Jonas at around $1,000 a year, sources said. "What would happen if Sun decided to acquire Novell? What would IBM do? If Red Hat is competing with them, they are left with only one choice: Novell SuSE Linux. And no matter how small a portion of the market SuSE represents, it runs on all of IBMs hardware. Sun could then end up as the owner of the operating system that runs IBMs mainframe. Wouldnt that be an interesting scenario?" Schwartz asked. He then went on to say that Sun had "never been more aware of IBMs dependence on SuSE Linux given Red Hats application server plans. I think that represents an extreme vulnerability for IBM that has not gone unnoticed at Sun," Schwartz said. "But that competitive opportunity is very evident to us, and Im sure is evident to IBM. Hypothetically, if Sun were to acquire Novell, that would leave IBM dependent on Sun for its operating system, and what would happen when Sun then started offering upgrades off of SuSE onto Solaris? This would be a complete replay of the IBM/Microsoft Windows play in the 1980s. The difference between humans and white mice is that white mice learn from their mistakes. IBM has been down this path before," Schwartz said. Asked whether IBM could outbid Sun in any possible deal for Novell, Schwartz said he was not sure that would be the case given how well-financed Sun is. "We have more cash on hand than IBM does. Novell is a public company, and public companies are always for sale, and its directors would have to be open to any such discussion should it ever happen," he said. The current situation leaves IBM in a very precarious position and what "we have known all along that if we stay focused on performance and innovation, and with our plans to open-source Solaris we can now start moving to upgrade IBMs installed base off AIX or to HP-UX," Schwartz said. Check out eWEEK.coms Linux & Open Source Center at http://linux.eweek.com for the latest open-source news, reviews and analysis.

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Peter Galli has been a financial/technology reporter for 12 years at leading publications in South Africa, the UK and the US. He has been Investment Editor of South Africa's Business Day Newspaper, the sister publication of the Financial Times of London.

He was also Group Financial Communications Manager for First National Bank, the second largest banking group in South Africa before moving on to become Executive News Editor of Business Report, the largest daily financial newspaper in South Africa, owned by the global Independent Newspapers group.

He was responsible for a national reporting team of 20 based in four bureaus. He also edited and contributed to its weekly technology page, and launched a financial and technology radio service supplying daily news bulletins to the national broadcaster, the South African Broadcasting Corporation, which were then distributed to some 50 radio stations across the country.

He was then transferred to San Francisco as Business Report's U.S. Correspondent to cover Silicon Valley, trade and finance between the US, Europe and emerging markets like South Africa. After serving that role for more than two years, he joined eWeek as a Senior Editor, covering software platforms in August 2000.

He has comprehensively covered Microsoft and its Windows and .Net platforms, as well as the many legal challenges it has faced. He has also focused on Sun Microsystems and its Solaris operating environment, Java and Unix offerings. He covers developments in the open source community, particularly around the Linux kernel and the effects it will have on the enterprise.

He has written extensively about new products for the Linux and Unix platforms, the development of open standards and critically looked at the potential Linux has to offer an alternative operating system and platform to Windows, .Net and Unix-based solutions like Solaris.

His interviews with senior industry executives include Microsoft CEO Steve Ballmer, Linus Torvalds, the original developer of the Linux operating system, Sun CEO Scot McNealy, and Bill Zeitler, a senior vice president at IBM.

For numerous examples of his writing you can search under his name at the eWEEK Website at www.eweek.com.

 
 
 
 
 
 
 

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