Novell acquires SUSE [LWN.net]

From:		"Kevan Barney" <kbarney-AT-novell.com>
To:		<lwn-AT-lwn.net>
Subject:		Novell Announces Agreement to Acquire SUSE LINUX
Date:		Tue, 04 Nov 2003 06:37:48 -0700


Novell Announces Agreement to Acquire Leading Enterprise Linux
Technology Company SUSE LINUX

 - Novell expands its open source commitment and will become the first
to offer comprehensive Linux solutions for the enterprise from the
desktop to the server
 - Novell will be the only $1 billion software company with a Linux
distribution and the worldwide technical staff to support it
 - Novell/SUSE LINUX to become the world's largest supplier of
desktop-to-server Linux solutions and technical support
 - Customers to gain worldwide technical support for enterprise Linux
solutions from a company with more than 20 years of operating system
experience
 - IBM and Novell to negotiate extensions to commercial agreement with
Novell/SUSE LINUX to support the IBM eServer line

PROVO, Utah -- Nov. 4, 2003 -- Novell today announced it has entered
into an agreement to acquire SUSE LINUX, one of the world's leading
enterprise Linux companies, expanding Novell's ability to provide
enterprise-class services and support on the Linux platform. With the
open source expertise of SUSE LINUX and Novell's world-class networking
and identity solutions and support, training and consulting services,
Novell will be able to deliver Linux and all its components -- from the
server to the desktop -- and give organizations a secure, reliable and
mature Linux foundation. Novell will pay $210 million in cash to
complete the acquisition. The transaction is subject to regulatory
approval and the winding up of shareholder agreements. Novell expects
the transaction to close by the end of its first fiscal quarter (January
2004).

This latest move follows Novell's August purchase of Ximian, a leader
in Linux server and desktop solutions, and further demonstrates Novell's
ongoing commitment to provide customers a full range of Linux solutions.
Both the Ximian and SUSE LINUX acquisitions affirm Novell's commitment
to promoting the open source model and developer community.

Novell today also announced that IBM intends to make a $50 million
investment in Novell convertible preferred stock. In addition, Novell
and IBM are negotiating extensions to the current commercial agreements
between IBM and SUSE LINUX for the continued support of SUSE LINUX on
IBM's eServer products and middleware products to provide for product
and marketing support arrangements related to SUSE LINUX. Both of these
agreements will be effective when the acquisition of SUSE LINUX by
Novell is completed.

"Responding to customer demands for open, standards-based computing,
Novell has been dedicated to a cross-platform vision for four years now,
and Linux is an increasingly important part of that strategy," said Jack
Messman, chairman and CEO of Novell. "The acquisition of SUSE LINUX will
complete Novell's ability to offer enterprise-class Linux solutions to
our customers from the desktop to the server. No other enterprise Linux
vendor has the operating system experience and the worldwide technical
support capabilities that Novell will be able to deliver. Novell is
bringing our significant resources to bear to help customers adopt Linux
with more confidence, giving them the freedom of choice Linux provides
without the anxiety over whether an open source solution can truly be
relied on for mission-critical functions."

"Novell understands the power of open, standards-based computing, and
has been moving in that direction for some time," said Richard Seibt,
CEO of SUSE LINUX. "Novell's global reach, marketing expertise and
reputation for security, reliability and global enterprise-level support
are exactly what we've been seeking to take SUSE LINUX to the next
level. We've also been impressed by the incredible loyalty and
competence of Novell customers and business partners, and we're looking
forward to joining forces to help customers gain the benefits of Linux
and to help Novell continue to expand its role in the open source
community."

SUSE LINUX Offerings Complement Novell Linux Services
SUSE LINUX offers a range of Linux server and desktop solutions
designed to meet the diversified needs of different organizations. SUSE
LINUX Enterprise Server 8 for midsize to large companies provides a
range of core networking services with the high-availability and
scalability features needed for mission-critical environments.

SUSE LINUX is the leading enterprise Linux company in Europe. In
addition, through its relationships with Conectiva and Turbolinux, SUSE
LINUX has been a leader in Latin America and Asia, as well. SUSE LINUX
is also one of the top providers of Linux to enterprises in the United
States and North America. Novell's extensive global sales and channel
programs, proven and reliable technical support capabilities, as well as
ongoing Novell and SUSE LINUX relationships with key partners like IBM,
Oracle, SGI, Fujitsu-Siemens, Dell, Intel, AMD, SAP, HP and others,
provide a powerful business network to promote more rapid Linux adoption
around the globe.

Novell's Linux Strategy
The acquisition of SUSE LINUX will be an important step in Novell's
efforts to accelerate enterprise adoption of Linux. Novell began
building solutions for Linux in early 2000, when it made its flagship
eDirectory(TM) technology available on Linux. In April of this year,
Novell announced it would make all the services that run on its
NetWare(R) operating system run on both the NetWare and Linux kernels in
the future with the full range of Novell's worldwide technical support.
In August, Novell acquired Ximian with its leading Linux desktop
management solutions and its visionary leadership to promote Linux
desktops and to enable Microsoft .NET* applications to run on Linux.

In September, Novell announced the open beta of Novell(R) Nterprise(TM)
Linux Services (NLS), an offering that runs on SUSE LINUX and Red Hat*
and provides a variety of networking services for Linux environments.
IBM, HP and Dell have all licensed the NLS technology for resale to
their customers. With SUSE LINUX, Novell expands its reach to developers
and ISVs looking for a complete Linux solution. Today's announcement of
Novell's plans to acquire SUSE LINUX strengthens Novell's already proven
set of Linux offerings by allowing Novell to distribute the underlying
Linux platform itself, in addition to the many value-added services for
Linux that Novell already offers.

"We chose SUSE LINUX because they are a clear market leader in Linux
technology for the enterprise," Messman said. "With this acquisition,
Novell will be the only billion-dollar software company with a Linux
distribution and a worldwide ecosystem around it. A worldwide technical
staff of more than 600 has been trained to support Linux. The
acquisition of SUSE LINUX completes our technology stack from the
desktop to the server."

Beyond the technology, the acquisition will also expand Novell's
strategic commitment to the open source community. The combination of
SUSE LINUX and Novell will deliver not only complete enterprise Linux
software solutions, but also worldwide channels and industry-leading
partnerships. The combined company will help promote a thriving, global
open source ecosystem that creates innovation and choice for developers,
users and organizations alike. Novell is firmly committed to open
standards and maintaining the existing open source kernel development
efforts. From advocacy and development resources to events and support
of open source efforts like kernel projects, XFree86, ReiserFS, KDE,
GNOME and Mono, Novell stands side-by-side with the open source
community.

Citigroup Global Markets Inc. acted as Novell's financial adviser to
the transaction. Clifford Chance Punder served as Novell's legal
counsel. Arma Partners acted as financial adviser to SUSE LINUX and its
stockholders. Freshfields Bruckhaus Deringer served as legal counsel to
SUSE LINUX and its stockholders. SUSE LINUX investors are e-Millenium 1,
AdAstra Erste Beteiligungsgesellschaft mbH and APAX Partners & CO.

Press Conference Invitation
Novell and SUSE LINUX will hold a press conference today at 11 a.m. EST
(5 p.m. CET) to discuss the transaction in greater detail. The press
conference can be heard live at http://www.novell.com/webcast.

Forward-looking Statements
This press release includes statements that are not historical in
nature and that may be characterized as "forward-looking statements,"
including those related to future financial and operating results,
benefits and synergies of the company's brands and strategies, future
opportunities and the growth of the market for open source solutions.
You should be aware that Novell's actual results could differ materially
from those contained in the forward-looking statements, which are based
on current expectations of Novell management and are subject to a number
of risks and uncertainties, including, but not limited to, Novell's
ability to integrate acquired operations and employees, Novell's success
in executing its Linux strategies, Novell's ability to deliver on its
one Net vision of the Internet, Novell's ability to take a competitive
position in the Linux industry, business conditions and the general
economy, market opportunities, potential new business strategies,
competitive factors, sales and marketing execution, shifts in
technologies or market demand, and the other factors described in
Novell's Annual Report on Form 10-K for the 2002 fiscal year. Novell
disclaims any intention or obligation to update any forward-looking
statements as a result of developments occurring after the date of this
press release.

About Novell
Novell Inc. (Nasdaq: NOVL) is a leading provider of information
solutions that deliver secure identity management (Novell Nsure(TM)),
Web application development (Novell exteNd(TM)) and cross-platform
networking services (Novell Nterprise), all supported by strategic
consulting and professional services (Novell Ngage(SM)). Novell's vision
of one Net -- a world without information boundaries -- helps customers
realize the value of their information securely and economically. For
more information, call Novell's Customer Response Center at (888)
321-4CRC (4272) or visit http://www.novell.com. Press should visit
http://www.novell.com/pressroom.

About SUSE LINUX
Established in 1992, SUSE LINUX is one of the world's leading providers
of Linux software and services. With the largest dedicated Linux
research and development team, SUSE LINUX delivers enterprise-ready
software and services that harness the innovation, speed-to-market and
independence of the open source community. A privately held company
based in Nuremberg, Germany, SUSE LINUX -- together with global business
partners -- supports customers throughout the world.

###

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Novell acquires SUSE

Posted Nov 4, 2003 14:29 UTC (Tue) by minichaz (subscriber, #630) [Link]

I keep hearing about these vacancies. There is the one created by redhat moving out of the consumer desktop space and now the European one too. So... Who fancies making some money by creating a comercial distro based on Fedora but swung towards KDE instead of Gnome? Its got to be worth a thought...

RedHat KDE

Posted Nov 4, 2003 14:43 UTC (Tue) by vblum (guest, #1151) [Link]

Happily recommending Mandrake boxes ... it used to be their business model (when they still made money)

RedHat KDE

Posted Nov 4, 2003 15:00 UTC (Tue) by davidl (guest, #12156) [Link]

Well Mandrake don't have as much money and resources as the 'other two' but they do reasonably well. Their config tools are very good. Mandrake, step up to the plate! Oh damn, that's an American saying!

RedHat KDE

Posted Nov 4, 2003 15:03 UTC (Tue) by minichaz (subscriber, #630) [Link]

Yeah... Mandrake. Been there. Unstable and full of gimmicks as I recall. I also think the birth of Fedora could damage Mandrakes Cooker community as some people jump ship. We'll see though.

Mandrake

Posted Nov 4, 2003 16:22 UTC (Tue) by virtex (subscriber, #3019) [Link]

Funny, I've been running Mandrake for years without any stability problems. My main box at work, where I do everything from email to web browsing to running multiple OSes under VMWare to developing code to running databases and web servers is running Mandrake 9.1 and has not seen a reboot since I installed it 6 months ago. And it's running as smooth and problem free as it was when I first installed it.

As for the gimmicks, would you care to elaborate? Is having a central control center app a gimmick? Maybe you're talking about things like detecting when a network cable is plugged in and automatically configuring it? I actually find these things useful. Or maybe you don't like the graphical system boot? You can disable it by selecting the "no framebuffer" at the boot prompt. What exactly is it you find gimmicky about Mandrake?

Mandrake

Posted Nov 4, 2003 17:24 UTC (Tue) by minichaz (subscriber, #630) [Link]

You know what? I'm going to hold my hand up to this one. I've not used Mandrake since... err... 6.2. I know! I've been a bad boy and tarred and feathered more recent versions without trying them. I do know others who have had problems with versions as recent as 9 but I'm willing to admit that perhaps it was them.

Tonight or tomorrow I'll get the isos and give it another go. I'll let you know how I get on. Thanks for the constructive feedback though. :o)

Is anyone else REALLY sad to see the Redhat distro in its current incarnation die?

RedHat KDE

Posted Nov 4, 2003 17:09 UTC (Tue) by lovelace (subscriber, #278) [Link]

Unstable and gimmicks? I've been running my main web/mail/shell server on Mandrake for
four years without any problems at all. There's a lot to be said for having security tools
integrated into the distribution rather than being an afterthought.

Novell acquires SUSE

Posted Nov 4, 2003 14:47 UTC (Tue) by haraldt (guest, #961) [Link]

SUSE will stay where it is for a long time yet.
These corporations are rather international by nature, and as long as a distinct area of effort isn't spread out too much, it's just a bother to try to move things.

Perhaps marketing and administration would move with some speed, but getting experienced, well-educated europeans to move, even to another continent, is easier said than done.
Most would just find something else to do.

Novell acquires SUSE

Posted Nov 4, 2003 14:53 UTC (Tue) by cdamian (subscriber, #1271) [Link]

I keep hearing about these vacancies too, but somehow I believe that RedHat wouldn't give this market up if they wouldn't have a good reason to do so.

Maybe there really is no market for a cheap desktop distribution, because you can always find a free alternative.

And RedHat are not giving up the European or KDE market, they are just going for the slightly higher priced market, which is still cheaper than the Microsoft or Sun option.

christof

Another distribution gives up the ghost?

Posted Nov 4, 2003 18:14 UTC (Tue) by stuart (subscriber, #623) [Link]

Well folks could just use (and improve) Debian.

Debian is properly Free software and has really high quality packages and package management. Apparently its installer sucks (personally I find it easier than these graphical thingumies) but that is being addressed and now Progeny have ported Red Hat's anaconda install system to Debian (i386 anyway).

So I guess my feeling is, why worry, we already have a great GNU/Linux distribution which supports the most platforms in the form of Debian so if SUSE, RedHat/Fedora and Mandrake all give up producing desktop distributions it won't matter.

Donations to SPI, I am sure, would help though :-)

Stu.

Novell acquires SUSE

Posted Nov 4, 2003 14:54 UTC (Tue) by AAP (guest, #721) [Link]

I have similar concerns. Of the Big 3, SuSe is the one I'm most likely to recommend to home users. Especially since RedHat seems to be leaving the non-corporate market.

Novell acquires SUSE

Posted Nov 4, 2003 15:03 UTC (Tue) by haraldt (guest, #961) [Link]

Or, Novell has seen it as a business strategy to make different operating system interact. Second fiddle to anyone who might like to play first is still an important position.

But perhaps Novell sees Linux as an important piece of glue in itself?

Novell acquires SUSE

Posted Nov 4, 2003 17:53 UTC (Tue) by mmarq (guest, #2332) [Link]

"Vs. Microsoft this is a tricky move, because I think even the Bush Justice Dept would look very hard at Microsoft entering the Linux market."

Microsoft is not goimg to enter the Linux Market. They will resort to the usual tricks with inhouse stuff...
Try to "embrace and extend" the WEB with a new proprietary language XAML, that will serve as a IDL(interface defining language) for the intire Desktop;..., something like mozilla XUL, (goodbye Win32API) but with the forcing power of the monopoly OS...
(and they call it innovation!!!... What about OS/400, the Mozilla XUL, or the OS2 previous IDL???)

http://www.joeuser.com/index.asp?AID=639
http://draginol.joeuser.com/index.asp?AID=622
http://www.extremetech.com/article2/0,3973,1368535,00.asp

...and also will try to make a major lock in, by DRM technologies,... and that will be fundamentaly contrary to Linux and the GPL that governs it... so no M$ Linux...

http://www.microsoft-watch.com/article2/0,4248,1371599,00.asp
http://interviews.slashdot.org/article.pl?sid=03/01/17/1430214&mode=thread&tid=137&threshold=1
http://www.wired.com/news/politics/0,1283,51274-2,00.html?tw=wn_story_page_next1

"So does this mean Novell will now screw up SuSE, whose distribution I like a lot?"

Well, they must think they have renewed themselfs, but managing diferent things like Ximian, SUSE and ancient Netware, aint gonna be easy!

Novell acquires SUSE

Posted Nov 4, 2003 21:01 UTC (Tue) by rise (subscriber, #5045) [Link]

Actually IBM is a lot closer to SuSE than Red Hat, especially at the very high end - mainframes and the largest Unix servers. Among other things the Common Criteria EAL2+ security certification was a joint effort between them. I doubt IBM could acquire Novell without severe antitrust concerns, but working tightly together to try eat Sun and HP's lunch and keep MS from gaining too much ground in the enterprise would be right up their alley. IBM builds hardware and does services (where they make most of their money), Novell does software, distro and services for them. They'll still compete in some areas, but working together to get a shared platform into accounts will benefit them both. Novell's fallen a long way, but they successfully kicked Microsoft's ass on Windows for years.

Novell acquires SUSE

Posted Nov 4, 2003 21:13 UTC (Tue) by rhricik (subscriber, #12189) [Link]

Will this lead, in time, to IBM aquiring Novell?

Back in the early 90's, when I managed a large Novell 4.x network, there were persistent rumors that IBM was going to buy Novell (and this was when Novell was at the top of the pile - so it would have been a significant investment for "Big Blue"). At one point, IBM actually boxed and sold Novell Netware under the "Big Blue" banner. Maybe it is just history catching up to itself...

Having worked with Novell and their support team over the years, I can truthfully say that they worked their butts off to help me. I never got a song and dance routine from them - just results. If they continue to do that with SuSE support, corporations are going to take a good, hard look at bringing in Linux for their projects. Corporations don't care about who has the GUIest interface, the newest gizmoes or thingamabobs or the best advertisements. They care about stability of the product, stability of the company and the support from the company. Novell is still a recognizable world-wide name. Having them back Linux can only be a good thing...

Now, if they only can prevent their automatic "self-destruct" mode and market to the "purse" instead of the geek! ("Geeks" may run the company, but the "purse" owns it!) Unfortunately, M$ has learned to romance the purse and promise the geek that "the next revision will be the greatest yet and fix your complaints"... it's really great marketing company. I have to go back and patch more MS security holes now...