Analysts: Sun Presidents Novell Talk Totally Crazy
"Its totally crazy for him to be making a comment like that," said Anne Thomas Manes, vice president and research director for the Burton Group and a former Sun software executive. "Im sure hes going to get his hand slapped by the board for this," she said.
Novell executives had no comment on the suggestions by Schwartz. "We dont speculate about merger and acquisition activity as policy," said Bruce Lowry, Novells director of media relations.
Schwartz first suggested in his personal Weblog that IBM was "in a pickle" because of its relationship with Linux distribution providers Red Hat and Novells SuSE. He wrote that IBM is in danger of losing control of its customers to Red Hat, which accounts for the majority of the Linux deployments on IBM hardware.
"Now, if youre an IBM customer," Schwartz wrote, "youve probably receivedor should prepare to receivethe pitch from IBM incenting you to move off Red Hat to SuSe. Its clear theyre worried that Red Hats lock on customers is divorcing IBM from their customer relationships."
Within a day of making those comments on his blog, Schwartz told several publications, including eWEEK, that Sun was considering acquiring Novellspecifically because of IBMs growing dependence on SuSE, which is now a unit of Novell, as a counterweight to Red Hat.
"If Im seriously pursuing an acquisition, I wouldnt do what [Schwartz] is doing," said John Rymer, vice president of Forrester Research. "You cant take this seriously as a real acquisition. Im sure that within Sun, hes getting flamed right now."
Noel Hartzell of Citigate Cunningham, a Sun spokesman, said the company would not elaborate on Schwartzs comments. "Sun does not comment on rumors or speculation," he said in an e-mail in response to requests for clarification on Schwartzs comments.
Hartzell did add, however, that "IBM and HP have all but exited the Unix space, leaving Sun/Solaris, Red Hat and Windows. With Linux having concentrated toward Red Hat to the degree it has, and Solaris having matured to start driving real volumes on x86 (and non-Sun platforms), Sun is seeing the opportunity to up-end IBMs systems business. As IBM and HP grasp for SuSe to supplant Red Hat, they are left very vulnerable."
Schwartz in recent months has used comments to the media to push his agenda within the company, according to Sun insiders. When Schwartz told the media at a SunNetworks event in Shanghai, for example, that Sun would open-source the Solaris operating system, it was an attempt to kick-start a project that had run into internal political resistance. "They actually initiated that plan over five years ago," Manes said.
"My sense about the OS comments is that they were reflective of really serious planning inside Sun," Rymer said. "The only way I can interpret [Schwartzs] making this comment in Shanghai is that things werent moving fast enough for him, and he wanted to push his people."
That would seem to be the case with Schwartzs latest bit of off-the-cuff exposition. "Hes trying to communicate to some other party," Rymer said. "Theres something else going on here." But its not clear who the audience is for this latest trial balloon.
And the balloon doesnt have a whole lot of lift to it. "Even if Sun acquires Novell, that wouldnt have any long-term ramifications for IBM," Manes said. "If Sun were to acquire SuSE, then IBM would be left in a situation where they were beholden to Sun for the operating code.
"But its GPL [GNU General Public License] code; theres absolutely nothing in SuSEs software IBM is 100 percent attached to, and IBM could just fork the code [and do their own version of SuSE]. Or they could decide to grab any of the other [Linux] distributionsthey could even turn around and buy Red Hat."
"Jonathans just dreaming," Manes added.
"Theres an assumption Schwartz is making here that the open-source community will not tolerate IBM making a Linux of its own," Rymer said. "I dont know that its a good assumption. There might be some cultural angst," he said, but he added that some IBM customers might actually prefer an IBM-blessed Linux distribution.
Thats not to say that Sun couldnt gain advantages by acquiring Novell. Sun also would gain stewardship of a number of technologies Novell owns that would be useful in helping Sun develop an integrated stack of open-source projects, Rymer said.
The problem, Rymer said, is everything else that comes along with those technologies. "Novells got some interesting assets, but Novell is like Borlandthey have a lot of baggage," he said. That baggage includes Novells Netware network server operating system.
That baggage probably would have more of an adverse effect on Suns own long-term financial health than it would on IBMs. Dealing with the consequences of trying to migrate Novell Netware customers to Linux or Solaris-based server software and handling the rest of Novells bag of technologies and services could end up having an impact on the companys earnings, according to analysts.
And given that Suns recent profitability was based almost exclusively on a settlement with Microsoft, that might not be an attractive proposition to the companys board members and stockholders.