Open-source technology revives Novell
By Staff -- Manufacturing Business Technology, 4/1/2005 7:00:00 AM
Linux is proving to be a virtual lifeline for Novell, whose NetWare operating system for desktop PCs and local area networks has been steamrolled by Microsoft Windows.
Novell's association with Linux began with its January 2004 acquisition of SUSE, a distributor of Linux code and services. Today, the SUSE version of Linux is the flagship product in Novell's Platform and Application Services unit. In its most recent fiscal quarter, Novell recorded $15 million in revenue from SUSE Linux—a $3-million increase over the previous quarter.
"Although it arrived relatively late to the Linux marketplace, Novell has moved swiftly to support Linux with a stable of products and services," says Mary Hubley, research director at Stamford, Conn.-based Gartner.
"We're seeing significant growth," says Peter Joseph, director of corporate strategy at Novell. "Our aim is to grow the market for Linux and open-source software in general, rather than remove players from the market."
Joseph expects overall Linux sales to grow roughly 44 percent a year through 2008 as users adopt Linux for more mission-critical applications. One estimate cited by Joseph sees the proportion of Linux servers in data centers rising from 2 percent today to 10 percent by 2007.
Joseph also believes Novell is poised to capture a good piece of that market.
"We can offer a single Linux distribution, from the desktop to the mainframe," he says. "It's the same Linux kernel and code base right across every platform: 32-bit, 64-bit, and mainframe. Red Hat [another Linux distributor] products aren't as scalable."
Al Gillen, a research director at Framingham, Mass.-based IDC, advises caution in interpreting Linux vendors' claims. "The raw numbers are deceptive," he says. While SUSE shows strong sales growth, explains Gillen, the prevailing market trend is moving away from a retail-based sales model to an enterprise-based sales model, and SUSE trails Red Hat in enterprise sales.
"We expect SUSE Linux to start to close the gap," Gillen concludes, "but Red Hat continues to have the larger presence in the enterprise market."
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