Software, Interrupted

PCPro UK is reporting that Novell is considering an effort to bring a "wealth of open-source software to everyday users through an open-source apps store."

Novell believes that an open-source apps store would make life easier for customers, specifically those interested in Netbooks. This certainly seems logical, but considering that open-source applications tend be licensed in a way that doesn't require an upfront fee, it's hard to see how this represents a business model.

"I would compare what's happening on netbooks with what's happening to the smartphone," Holger Dyroff, vice president of business development at Novell told PC Pro. "There's a core experience, but then the ability to customise that experience. On the user end, all they'll see is an open-source applications store with one-click downloads of new software. Unlike the other stores though, they won't have to pay for any of those applications, which will be very attractive."

"It's a new way of marketing open source," he admits. "It's also a method of educating people about the benefits of open source."

This is not a bad idea, but it's not clear that this does anything more than market open-source applications--which is fine, but it's not clear that Novell (or any company) would generate much revenue with such an effort.

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Paula Rooney at ZDnet reported on today's announcement that rPath has entered a pact with Novell that makes creating a virtual appliance easier for developers.

While I am not shocked that rPath is working with Novell instead of continuing with their own Linux flavor, I am completely shocked that Billy Marshall, rPath CEO and former Red Hat bigshot sales guy is citing the Microsoft patent protection as the reason why. Nothing is said about Suse being better in any way. Instead its about this unproven patent protection.

rPath's Appliance Builder has been running its own Linux since the company's inception but it doesn't come with the legal peace-of-mind guarantee offered by Novell, he said. Despite Linux's widespread acceptance, potential legal issues still keep customers up at night, the former Red Hat sales exec said.

"We don't have the Microsoft patent promise that Novell provides. We can't provide that with rPath Linux," Marshall told this ZDNet blogger. "It takes a long time for people to overcome their historical biases. "

I have to think that Novell or Microsoft are going to make an investment or acquisition of rPath in the near future. Otherwise rPath sold out way too easily.

I appreciate that John Dragoon, Novell's CMO commented on my post about the company's recent acquisitions. Had I read his blog earlier I probably would have had more insight. And really, I have no desire to pick on Novell...it's just an easy target :>

The fact that John took the time to address this is an example of high-quality, new-school marketing. If you are not part of the conversation you are irrelevant.

The post is here, the full comment below for your reading pleasure.

Dave,

Allow me to offer my perspective on your opinions on our latest acquisitions being "off strategy".

Specifically, your comments re:

At this point, what is Novell? It's clearly not an open source company.
====
Response:

We've never tried to position Novell as solely an open source company. We are an infrastructure software company with a mixed portfolio of open source and open standards based software. While we may all prefer a world where the entire software stack that customers need to run their businesses be based on open source technologies...it's simply not a reality of most if not all customer environments (today). Accordingly, we offer technologies that solve certain problems independent of the business model that created and licenses them. We clearly believe, as do you, in the power of the open source model and are major contributors to it. But it's inaccurate to suggest that Novell acquisitions that aren't pure open source are off strategy or ill founded.

We are positioning Novell as the leader in interoperability....and as you know we strongly believe the preferred operating system platform be Linux...yes SUSE Linux....and we also offer a portfolio of up the stack IT management solutions....yes most NOT open source developed or based. So the message from us is how we help clients leverage and extend their IT investments...not rip and replace. Again I respect your point of view, given your passion for MuleSource, for open source as the answer to all....we just don't think the market is quite there yet.

Neither of the recent Novell acquisitions:
-Have a large volume of customers
-Are open source
-Have complimentary architectures (I think they are both Java but not sure)
==
Response:

SiteScape. This acquisition has been very well received by clients and the analysts who cover the collaboration space. It also has very significant roots in open source (ICEcorp project http://www.sitescape.com/products/icecore.php), a commitment we will maintain and extend. It's not the largest acquisition we have made but it's very important to our Groupwise franchise and was a logical next step in the partnership we had previously with SiteScape.

PlateSpin. I've said a lot about this....more at http://www.novell.com/company/blogs/cmo/

This is VERY on strategy for us. With this acquisition, we'll extend our next generation data center capabilities by giving customers the ability to manage workloads across both physical and virtual infrastructures. It very nicely compliments our virtualization platform (SUSE Linux with XEN) and our management tools (ZENworks Orchestrator). PlateSpin has been sold to a "a large volume of customers" and now we have a solution that the over 2 million SUSE virtual servers in the market place can take advantage of (not to manage VMware, Citrix, Virtual Iron, Microsoft, etc).

Finally....I'm fine if you find it entertaining or instructive to "pick on " (your words) Novell on your podcasts. I'll just use, as you are, the open forum to react to opinion represented as fact.

Thanks

John Dragoon
Novell
CMO

Link: John Dragoon's Blog

Novell announced today that they were looking to acquire PlateSpin, a Canadian company that makes software to manage virtualized servers.

I guess Novell is taking the land-grab path to get something in the virtual space but I can't see how the acquisition of SiteScape makes any sense. For that matter, PlateSpin may work in theory but regardless of what Ron Hovsepian thinks, this doesn't present a clear strategy.

At this point, what is Novell? It's clearly not an open source company.

Neither of the recent Novell acquisitions:
-Have a large volume of customers
-Are open source
-Have complimentary architectures (I think they are both Java but not sure)

When the Novell team asks why we always pick on the company during the Open Season podcasts, I wonder if they read their own news.

Irrelevant annoyance SCO got a new lease on it's miserable life, courtesy of Stephen Norris Capital Partners (SNCP).

According to a statement from the company, SNCP already has a business plan for SCO that includes pursuing its legal claims, which in the past have named Novell, IBM and others as infringing on the company's patents.

I can't for the life of me figure out why anyone would want to keep that business alive--even for the legal claims. $100m would be better invested in almost anything else.

My previous post about Novell looking to make acquisitions got me thinking about what the company could do to become relevant again. The best I can come up with is that Novell should become the dominant force in the open source .NET universe.

The deal with Microsoft must have some level of joint engineering possibility that would help Mono mature and make .NET cross-platform. If Microsoft's goal really is to create the WAMP stack, it will still require a great deal of community development to get people to write and donate applications, something Novell is good at managing.

The .NET approach is a chance for Novell to take an entire development framework that Red Hat has shown no interest in and dominate it. For the majority of the linux world, .NET is irrelevant. The Java guys who think some of the aspects of .NET are cool have no interest in running only on Windows.

There are only a few notable exceptions of successful .NET open source companies (I can only come up with MindTouch at the moment, and maybe DotNetNuke.) Novell should take their cash, buy them all and become the leader of open source .NET. It would ease Microsoft's entrance into open source and theoretically help developers who want their .NET apps to run on Linux (assuming Mono gets some help.)

There is nothing else that is strategically interesting at this point that Novell is capable of pulling off. At least this would put a stake in the ground, and would make .NET accessible to a much broader audience.

Novell got a nice influx of cash when they made their deal with the devil (er, Microsoft) and BusinessWeek says that the company is now ready to start spending some of that cash on acquisitions.

The problem is that there aren't a whole lot of companies that are complementary in a meaningful way.

Raven Zachary at 451 Group suggests that Novell might be interested in one of the open source system management vendors like Hyperic and Zenoss. This makes sense but won't bring meaningful revenue--and both of those companies will be worth a lot more down the road (especially considering Hyperic's recent customer wins.)

So, then who or what does Novell buy? They missed on virtualization with Xensource and they have no apparent SOA or app server strategy.

My suggestion? Buy up all the .NET open source companies and become the center of the open source Microsoft universe. There isn't a whole lot else that will be meaningful and since Novell already went to the dark side they should be happy as the Darth Vader of open source.

This month's Novell Linux Newsletter included a link to the Suse Team Blog which lists 40+ customers who "have decided to take advantage of the many benefits that the (MS/Novell) agreement brings to the table." And who knew that there was a whole site dedicated to the lovefest? (Hint: Not me.)

Unfortunately, the site, moreinterop.com appears to be down at the moment...probably running IIS :>

It's been a whole year since the ground-breaking Novell-Microsoft Collaboration Agreement was signed and announced. The one-stop shop for official info is here: http://www.moreinterop.com So far, despite the noise in the press, MANY customers have decided to take advantage of the many benefits that the agreement brings to the table. Here's a list of all 46 of the customers who are allowing us to mention them publicly. They include some of the largest and most recognizable organizations in the world - Wal-Mart, BMW, Costco, HSBC, Nationwide, Siemens and Southwest Airlines just to name a few...

I wonder if anyone has compiled a list of the customers who are not that thrilled with the agreement. I would also be interested in seeing the net new customers.

Link: 1 Year Later, Just the Facts

Remember back when Metallica isolated the majority of their fan base with their over-the-top stance against Napster (for the moment let's leave the stupidity of the music business and the fact that it only has itself to blame for people pirating songs out of this) and what it did to the band and the fans that supported them for all those years? That's how I am starting to think of Novell.

Metallica went from being loved by millions to being whiny about Napster, taking the focus of the band off the music and onto the ugly business of the music industry. Ultimately, instead of proving a point, the argument took on a sheen of greed. This made people not like the band.

Drawing a parallel to Novell, the company went from being a player in the Linux market, to an open source pariah as the focus changed from the software to their pact with Microsoft. Add to that the fact that Novell handled the situation rather poorly (with more obnoxious details filtering out all the time) and you find a company that lost its way. The big question if Novell can turn the ship all the way.

When we look at the market dynamics facing Novell it's fairly obvious why Novell did the deal with Microsoft:

• Red Hat has a dominant position for Linux servers with Ubuntu taking the desktop
• NetWare is pretty much dead
• Chronic management changes drained the corporate brain trust
• Microsoft needed to make a deal with a Linux vendor and Novell was desperate while Red Hat is not.

Onto the crux of the problem: Metallica's music has stood the test of time, while Novell's software has not. Metallica's last album when James was finally off the booze was better than the last release of Netware. Even with the new virtualization functions of Netware (Brad makes some good points) it just doesn't matter. Novell has already missed pretty much every chance it had for a true resurgence.