Novell is preparing a corporate restructuring, claims Linuxtoday. The company is said to start cutting jobs in the company's European offices soon, following weak financial results over the first quarter of 2005.
Novell is stuck between a rock and a hard place: it relies heavily on its installed base of Novell Netware to bring in revenues, but sees a bright future in Linux. The open source operating system however doesn’t offer much revenues for now.
Last quarter showed that Novell's strategy of subsidising a Linux transition with Netware sales is severely flawed. Users are abandoning Netware at a faster rate than expected while the Linux business won't grow as fast as the company planned.
But job cuts aren't much of a solution for this problem. Linuxtoday claims that the cuts will focus on Europe. That can mean two things: reorganising SuSe Linux or scaling back the "non-development" part of the organisation (sales, marketing, support).
Since Novell has put its future on Linux, messing with SuSe would come close to suicide. Decreasing sales, marketing and support similarly could scare away prospective customers.
Instead of focusing on cost cutting, Novell needs to turn up the heat against Red Hat by becoming a true open source player - it currently mostly provides lip service to the movement's ideals by selling Linux but keeping the source code for new projected proprietar .
Surely Netware is nice because it pays the bills, but it's time Novell starts taking the future a little more serious.
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