Novell still on the acquisition hunt

Novell's acquisition of the number two Linux distributor, SuSE Linux, still leaves gaps in its Linux portfolio, the company has admitted.

Earlier today, Novell revealed that it is to acquire SuSE in a deal worth $210m (£125m), and that IBM will invest $50m in Novell stock.

Novell said its moves to Linux have been driven by customer demands for open standards-based computing. With its NetWare operating system ageing, Novell is keen to re-invent itself.

"SuSE doesn't complete our portfolio but it gives us as much of the stack that matters," Chris Stone, vice chairman in the office of the chief executive, told vnunet.com.

"The goal is to have a complete server-to-desktop implementation, which has been the goal long before Longhorn was anywhere near the planet. With this acquisition we're almost there."

In August, Novell bought server and desktop open source software provider Ximian and is preparing a Linux desktop based on Ximian developments, including its Gnome desktop graphical user interface.

Novell's chairman and chief executive, Jack Messman, promised in September that Novell and Ximian would be the "catalyst" for desktop and enterprise Linux, and that the company would become the single point of contact for Linux support. Novell also pledged to train 1,000 support engineers.

Analyst Forrester has cited support as the biggest drawback for firms looking to move to open source software. But Novell is not the only company looking to boost the visibility of qualified Linux support: Oracle is also providing support through its relationship with market leader Red Hat.

Mike Davis, senior researcher at analyst Butler Group, told vnunet.com that Novell's acquisition of SuSE provided a viable alternative to the Oracle/Red Hat tie-up. "Effectively, SuSE and Red Hat are now development shops," he added.

Davis also believes that IBM's involvement is the most telling element in the deal. "This is a good shakedown and is good for Linux," he said.

"It means Linux is here to stay. IBM has a great need to maintain viable and strong distributions. They didn't want just one distribution."