Linked by Thom Holwerda on Sun 5th Mar 2006 13:34 UTC, submitted by Moule
Novell and Ximian "It was not the best of quarters for Linux vendor Novell. When Novell announced its financial results for its first fiscal quarter, which ended Jan. 31, 2006, it reported revenue of $274 million [EUR 227 million], compared to revenue of $290 million [EUR 241 million] for the first fiscal quarter 2005. This was a decline from the previous quarter in which Novell had reported $320 million [EUR 266 million] of revenue."
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RE: Novell = Sun
by segedunum on Sun 5th Mar 2006 19:44 UTC in reply to "Novell = Sun"
segedunum
Member since:
2005-07-06

Novell bought SuSE - open sourced SuSE Linux and now scratching their heads on how to get people to pay for Novell Linux Desktop when OpenSuSE is free.

That conflict in how they're presenting their software to customers, and what customers are actually paying for, is a big problem for them. It also means they can't concentrate on making the software they have much better and stop people from migrating from Netware to Windows, and to a lesser extent, Red Hat.

Novell bought Ximian - didn't know how to make Red Carpet or Mono work, ton of money down the tubes.

That's about the size of it. Their fixed costs are huge and their revenue, although significant, is just being eroded.

Selling software that has absolutely no value-added anything over free versions, or over competitors, is an absolute no, no in the open source world. The days of packaging up the kind of software Novell produces and charging fees, or worse, the dreaded 'service and support' are very much over. You need a much cleverer business model, or you need to create a lot of value added tools above the distribution and open source software that you're packaging up. You can't expect to just package up open source software and maintain several hundred million per quarter in revenue, or simply throw your existing, dying proprietary software into the open source mix (i.e. OES) and expect anything to be different.

Novell are going out of business, althought Sun probably have a bit longer left.

Reply Parent Score: 0

RE[2]: Novell = Sun
by Jamie on Sun 5th Mar 2006 20:02 in reply to "RE: Novell = Sun"
Jamie Member since:
2005-07-06


Novell are going out of business, althought Sun probably have a bit longer left.


Its a bit too early to write Novell off just yet. They do have a strong position in government circles (along with Sun and RedHat) so they will always have a fair chance to win over a few million government desktops.

You cant however expect them to reap billions as they are fairly new to the Linux market and it will take time for them to become established and set their stall.

A better business plan, more consolidation (gnome vs KDE) and making investments in areas likely to generate the most income would be a lot wiser than what they are currently doing byt there is still plenty of time for Novell to change direction.

Reply Parent Score: 2

RE[3]: Novell = Sun
by segedunum on Sun 5th Mar 2006 23:31 in reply to "RE[2]: Novell = Sun"
segedunum Member since:
2005-07-06

Its a bit too early to write Novell off just yet.

I'm sure that's what Messman's saying. Unfortunately, it doesn't wash. The situation has been the same for years, and it hasn't changed since Novell bought into Linux three years ago. There's no evidence of a changed product line (they're still trying to sell essentially the same stuff) and their whole strategy is near identical to before they bought Suse - except with slightly different software.

I expect that's as a result of political resistance within the company by Netware and NDS/eDirectory loyalists, plus blind faith by management that maintaining the status quo plus this magical Linux and open source formula will reap benefits. It won't, and it's Messman's job (as well as the new boy's) to be strong and sweep that aside. If they can't they're in trouble.

You cant however expect them to reap billions as they are fairly new to the Linux market...

I'm not expecting them to reap billions, and neither are their shareholders. However, they have very little chance of that. They're also not a Linux company, which is why they're losing out to Red Hat. Their core products use Linux (OES for example), they're not open sourced (eDirectory vs OpenLDAP etc) and it is not a Linux distribution as everyone knows it.

and making investments in areas likely to generate the most income

I'm sure that's what Messman is saying to his shareholders as well, but that's extremely vague. What are the areas likely to generate income, or more specifically, likely to generate income that is not declining?

there is still plenty of time for Novell to change direction.

Well they've still got time as they can just about teeter on living off their cash pile. However, it's not something that will keep them alive as a company or please shareholders.

I know some people around here really don't like to be told that, hence the ridiculous modding, but there it is. If you have something sensible to say (apart from this ridiculous "Novell have time, they're open sourcing and focusing on the desktop" rubbish), you can all be my guest.

Reply Parent Score: 2