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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Moulinneuf
Member since:
2005-07-06

"The financial statement (and the previous one a few months ago) suggests that Novell's Linux/OSS side is doing OK."

If all you watch is revenue. But revenue is not everything. Explain why they canned a lot of the GNU/linux developper then ? If its growing and the rest is in decline you cut the rest not whats improving. Reality most of what they bought whas hyped and not making real money or recurring profit.

"The core of the problem ... the company which is doing badly"

No , the problem is they invest to heavily , too soon in what dont bring that much in return. They still dont use everything and integrated everything they bought into a lean solution. They also have too many competiting solution inside the same company.

"Essentially, Novell bet ... the rest of the company."

No , they tought they bought the #2 company in a new and improving market , that they themself only touched partially. A good example would be if Wallmart had bought Apple to get into computer when they wehre down a bit. Apple is a real #2.

"For whatever reason, that bet hasn't paid off. The result is steady decline and shareholder unrest."

Trowing money at a problem and buying a lemon you tought whas a futur cash cow , is never going to help you be more profitable.

"Since Novell are sitting ... company be broken up for hard dollars. "

It dont make sense yet , they will ask that they spend less on R&D and push for better ROI.

"This is the stock market for you and has nothing to do with the quality of SuSE Linux."

Its a Novell protfolio , what they do and invest in them as impact on Novell bottom line. If they report 1 dolar investment for 5$ revenue the stock market will make the share value improve. For now they invest
100 000 for 1$ in revenue.

"Even if SuSE's sales doubled, the situation would be little different."

No it would mean that Novell just as to wait longuer , it all depends if they invest another billion to get that 54 milion more or they are just seling products on there own.

The stock market value of a share dont decide a company
futur , the management can use that 1.7 billion in many ways. One of wich could be to drive down the share price value of Red Hat and buy them at lower price. merging with Red Hat when they have enough voting share. Or they can offer to buy more other GNU/Linux company. etc ...

You still fail to recognise the problem , which make your fabulation and delusion absurd.

Novell did not make 54 million , how much did they make , do you even know ? What made that money ? wher ethat 1.7 Billion come from ? , this means that the rest made it and since they did not invest anymore in it , its highly profitable , hence the problem is the GNU/Linux division.

Reply Parent Score: 1

segedunum Member since:
2005-07-06

If all you watch is revenue. But revenue is not everything.

Yes it is in Novell's case. It is staying static and gradually declining while their fixed costs are unaltered.

No , the problem is they invest to heavily , too soon in what dont bring that much in return.

Yer. After three years shareholders and investors have no time for that. That's called a hopeless case.

It dont make sense yet , they will ask that they spend less on R&D and push for better ROI.

Breaking the company up does make sense. There is absolutely no hope of a return on investment. You could wait five to ten years for that to happen, and it probably won't because the current situation won't change.

No it would mean that Novell just as to wait longuer

Wait how much longer? Their investors have waited three years and their situation hasn't improved from even before the Suse aquisition.

it all depends if they invest another billion to get that 54 milion

Oh, sh*t! And how much sense does that make, oh fountain of wisdom? You were saying something about ROI? Divide 54 million (whatever that is) into a billion and work out some timeframes.

Novell did not make 54 million

Oh they didn't?! Well that was your figure, and I just assumed it was the revenue for Novell's Linux and OSS income, which is wrong by the way. It was 56 million according to the article.

how much did they make , do you even know ?

Do you know? Read the aricle?

What made that money ? wher ethat 1.7 Billion come from ?

That's the cash pile that Novell are currently living off ;-).

this means that the rest made it and since they did not invest anymore in it , its highly profitable

Is it really?! Wow.

hence the problem is the GNU/Linux division.

Is it? There are parts of their Linux division that are a problem, but the point is that their cash cow business of Netware, eDirectory and other software is declining and they've badly handled how Linux was going to solve that because the situation is the same. It's not the problem of the Linux division itself at all - it's about the management and leadership, or lack of it.

I think Novell should employ you. You would fit in well ;-).

Reply Parent Score: -1