Web Informant #349, 5 November 2003: Novell buys Unix, again
Remember the headlines from just more than 10 years ago about Novell buying Unix Systems Labs (USL) from AT&T for $270 million worth of stock? That was back in the days before Linus got started on Linux and when the majority of network file servers were running Netware. In 1993, DOS was still a big deal. Graphical interfaces were still only found on Macintoshes. IBM was still selling plenty of mainframes, and it still had high hopes for OS/2 and TopView.
Ten years ago, Unix was mostly a techie curiosity, being run sub-rosa by IT managers who were so early to the market that it was more of a cult following than an operating system. Ten years ago, directory services was a novel idea and relatively unknown. Indeed, the concept was so new that Microsoft spent a lot of time convincing people that they didn't need it and should wait until their product was good enough for public consumption. (One could argue that we are still waiting, and that Novell's product is still far better than Microsoft's Active Directory.)
Now Novell has a second chance, announcing yesterday that they are buying SuSE Linux for some $210 million -- in cash this time, with help from IBM. Big Blue will be buying $50 million of Novell's stock. Is this déjà vu all over again? Hard to say. The world is a different place. Linux is mainstream, cheaper and more potent than ever. The Internet made TCP/IP the protocol of choice (even Netware runs over it nowadays), and a good chunk of the world's Web servers run on Linux.
I find the whole situation very ironic. The main thorn in the side of Linux these days is SCO, which has its roots in the Canopy Group, a private venture capital firm that grew from the house that Ray Noorda built. If you recall, Noorda was the long-time CEO and chairman of Novell in the 1980s and early 1990s. Noorda was behind the first effort to buy USL from AT&T back in 1993. SCO's lawsuits on intellectual property theft stem back to the early years when Novell owned USL and are based on documents from the Noorda archives.
SuSE is a strong contender, as far as commercial Linux distributions go. And Novell is talking the open systems talk these days: showing how it can assemble a full solution from desktop to server, and tie those solutions closer together with the companies acquired during the last few years, including Silverstream/eXtend application servers, Nterprise Linux servers and Ximian desktop Linux software.
To me, the SuSE purchase is notable on several fronts. First, it is (yet another) a victory for the open source movement and shows how serious the commercial software players have become in trying to compete with -- and actually sell -- their products. The recording industry isn't the only one worried about freely distributed software. Why should enterprises pay for their application, Web, and database servers when they can get a perfectly good and free thing from the open source community? IBM has been singing out of the open source hymnal for quite some time, but this represents a very big and obvious push forward for them. If Novell and IBM can make good on their promises, they might have a shot at showing why customers should pony up some cash for Linux servers.
Second, the purchase could signal the final deconstruction of Netware's services, and the end of the Netware era as a recognizable file/print server. Some would claim that the Netware era ended somewhere around 1996, when the Web and Windows whipsawed IT departments into submission. But SuSE's integration into Novell could make it harder for anyone to recognize what Netware has become, and make it irrelevant as its services get placed on other platforms. Who cares what operating system is running on your file and print servers these days, as long as you can share these resources around your network? It isn't important. We have come to expect that all of these services can run on anything across the corporate network, and IT managers can swap out a server or consolidate them and still provide the same functions and services across the board. Netware, Windows and Linux offer the same features: file sharing, printers, directory management, et al. What matters is can I get to my applications, can I put up a new Web server that has access to my databases, and can my customers update their accounts over the Internet without having to load some special software?
Buying Unix was the beginning of many distractions for Novell, including trying to move Netware to a wider variety of platforms and adding TCP/IP protocol support to the product line. The company has never recovered from those glory days of the early 1990s. One can only hope that the second time is the charm for Novell. It has a shot with a solid foundation of Linux products in today's world that runs on TCP/IP and the Internet. The trick will be convincing people that they still need the collection of Netware services and products to get the job done, rather than going the freeware open source route.