In the last 18 months, Novell has moved dramatically into the open source arena with, among other things, the strategic purchases of Ximian and SuSE Linux.
vnunet.com caught up with chief executive Jack Messman at Novell BrainShare Europe in Barcelona.
How do you think you have delivered on your promises from this event last year? And what are your main strategies?
Let me just start on Linux. When we were here last year we'd just completed the acquisition of Ximian, and we had decided in January last year that we were going to take NetWare into open source.
We'd announced we [would] have those networking services that were a part of NetWare working on both the NetWare and Linux kernels. [From Ximian] we got some very neat little product lines and technologies, and one of the key things we got was some of their DNA in our organisation. We started thinking more like an open source company.
So then we [acquired] SuSE. Our strategy is we want to be the leader in Linux. SuSE Linux Enterprise Server is the best technology on the market in Linux today.
That's why you've heard IBM announce that all their hardware will use SuSE at the same time. That's not an easy feat. Typically, you'd announce two or three of your products at the same time. We got the whole product line. Then you saw Oracle say: "All our products will run on SuSE Linux."
There's a reason for that. We can get to the next version of the Linux kernel right away because we've got some unique development capabilities, [including] this auto-build technology that allows us to be very quick. We now use Linux in mission-critical applications. It's proven to be all the things our customers want: reliable, stable, scalable.
But ultimately the way open source works [means] we'll contribute back into open source the many things we do to improve Linux, so they will get back to our competitors.
[We have] a worldwide technical service and support organisation to Linux. It didn't exist prior to our acquiring SuSE.
We've been doing operating systems for 20 years, so we knew how to support [them]. So when we announced we were buying and supporting SuSE Linux, that was very, very well received.
[We have what we call] up-the-stack services already in NetWare and working very well. We've now got these proprietary services working on Linux that nobody else has.
We asked the hardware and software vendors did they think our putting the networking services and NetWare on Linux would be a big deal. They said yes.
[Lastly] indemnification. Last year, SCO was making a lot of noise about "there's Unix in Linux". But the history is that we sold Unix to SCO, and when we did that we kept the copyrights and patents. They have sued in the courts that they own the copyrights.
As a real belt-and-suspenders approach we took back our Unix licence from [SCO] and used that for our customers and business. [But] if our customers are worried there is any Unix in Linux, we indemnify them against that. When you buy Linux from Novell you are getting indemnified against SCO's actions.
You said Novell had done a poor job with small and medium businesses (SMBs). How are addressing that?
We have a channel that [performed] poorly. Our partner channel is really interested in Linux because they call primarily on SMBs. We think SMBs would like to reduce their costs and Linux is one of the ways of doing that.
And we have consultants. One of the first things companies want to know is "how do I migrate?" We can help them do that.
[And] we're migrating ourselves. We decided the best way to show our customers was to do it ourselves. Right now we are about halfway through [the desktop migration].
We expect that a company of our size - 6,000 employees - we'll save a couple of million dollars in [Microsoft desktop] licence costs annually. We will also be able to delay the next hardware upgrade because Linux throughput and efficiency is so much better.
That means the Linux desktop will probably be adopted first where its applications are very oriented towards processing and throughput. The biggest resistance to the Linux desktop - other than applications that aren't available yet - is user reticence.
What about roadblocks such as making more applications available on Linux?
Legacy [software] is a key area. Most software is written internally in a corporation and there are products in the marketplace that will allow you to run legacy applications without change. That will slow the adoption on the desktop because the applications that work on servers will be ported earlier.
But most major software vendors are porting. Four-hundred and seven software programs were certified [on Novell] in the last quarter, an increase of 93 per cent, [and] 300 technology partners signed up, up 92 per cent. So that's some of the momentum building in the marketplace.
Are your identity products still bringing in more revenue than Linux?
They are now, and will be [again]. Our identity software and services is a $120m business. All our Linux is probably somewhere in the $50-$60m range.
In the short run, the Linux business will grow faster and probably pass the identity management business. In the long run, we get more money out of identity management because it's got more products, more consulting, and it's not open source.
Open source is pretty, but you have to sell lots of units to make money in the product line because all you're getting is the maintenance revenue, not the licensing revenue.
So [our legacy software] is key to what we are doing: making the transition from where we are to where we want to be.
Is Novell itself attractive as an acquisition?
I think [what we have done] makes us more attractive but there are a couple of inhibitors to someone wanting to buy. If IBM or HP bought us they would hurt their market because, if IBM buys Novell, HP is not going to buy SuSE Linux from IBM and vice versa. That's a stumbling block for any hardware vendor.
With software vendors that's possible but we're one of the largest. Maybe [Oracle chief executive] Larry Ellison would come after us, but [Oracle is] more an application software than infrastructure software company.
But you can't worry about those things. I hope we will make the company more attractive to our employees and shareholders. If that makes it more attractive to an outside buyer, that's just the price you pay.
How about Microsoft?
I don't think Microsoft would be allowed to buy us because the government would see that as trying to eliminate a competitor and perpetuate their monopoly.
What keeps you awake at night?
What keeps me awake at night is simply executing on a day-to-day basis. I think figuring out the strategies is relatively easy compared to making it actually happen.
It's one thing to get this technology; it's another to sell it and market it and handle it.
Ximian taught us some new ways of thinking about software development. I guess the biggest opportunity is to change our culture to be more customer-focused and open source-oriented. Some old habits continue and we're slowly eliminating those.
Novell has always been an engineering-driven organisation that created great products, some of which nobody wanted or were created ahead of the marketplace.
We created directories, the basis for identity management, nine years ago. When we did, people didn't see the need. So we need to be more customer-driven. That's a cultural thing. We have to listen to customers and make sure we develop products they need.
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