The speculation won’t go away. Several companies apparently have bid to acquire Novell. Some pundits think VMware is among the bidders. Why’s that? The short answer involves a mutual enemy called, um, Red Hat (assuming you believe the rumor). Here’s the chatter.
First, let’s look at recent developments:
- March 2010: Novell rejects unsolicited takeover bid from Elliot Associates, a private equity firm. But Novell says it’s willing to listen to other takeover offers.
- May 20, 2010: Novell apparently sets a deadline for companies to submit potential takeover bids for Novell’s business.
- June 9, 2010: Novell and VMware announce virtualization partnership involving vSphere and Novell SUSE Linux.
- June 22, 2010: The VAR Guy learns Red Hat has hired a Novell veteran to assist the Red Hat Enterprise Virtualization (RHEV) partner push. Also, Red Hat CEO Jim Whitehurst predicts RHEV will leapfrog VMware the way Red Hat Linux leapfrogged Sun Solaris.
Clearly, the stage is set for a Red Hat vs. VMware showdown. Red Hat is willing to partner with Microsoft in its quest to overtake VMware. And Red Hat sees the line between Linux and virtualization blurring.
The $2 Billion (Or More) Question
The VAR Guy wonders: Does VMware see the market similarly? If so, does that mean VMware is willing to pay $2 billion or more to acquire Novell? Plenty of open source pundits are speculating about a potential VMware-Novell merger or acquisition.
The VAR Guy’s prediction: No such deal will happen. Sure, blending VMware with Novell SUSE Linux into a single company is an intriguing thought. But is VMware really willing to take on the rest of Novell’s business — identity and security management, groupware, etc? Hmmm… Difficult to say.
Novell would need to convince VMware that the Novell Intelligent Workload Management strategy (which encompasses all Novell products) can plug into the VMware organization.
By the way, neither Novell nor VMware comment on M&A rumors. And in this case, The VAR Guy believes the speculation is pure rumor. Though our resident blogger will eat crow if such a deal happens…
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IF “the VMware-sphere” are seriously concidering Novell I seriously doubt that VMware will be the company that purchase Novell. You’ll have to move up the foodchain. To EMC.
Cisco owns 6 % of VMware and with the latest trades EMC owns about 28%.
EMC has the capability of allocating the spectrum of Novell patents and software between its “subsidiaries” (ownership may vary) thus avoid giving away any of it for free.
By this they will be able to keep and streamline the Novell brand and let Novell keep on with core, profitable business. Linux that is.
Jack: Nice job pointing out some of the larger entities that may influence all this. The VAR Guy likes readers who further the discussion with new perspectives… like yours. Still, our resident blogger things the VMware/Novell rumor is based purely on the partner announcement from a few weeks ago.
-TVG
lets hope emc or vmware does not buy novell.
they are nothing but microsoft companies and could give a hoot about open source and what it means.
emc is crap software and cannot wait till we get it off of our linux boxes and start using it’s own multipathing software.
I would love emc and vmware to go silently into the night and far far away.
emc and vmware are nothing but microsoft companies and will do anything to destroy open source. citrix buying xen was nothing but the same thing microsoft has done through the ages. buy better technology and kill it or make it so expensive or bad nobody wants it anymore.
so now I am sure microsoft has all the “partners wink wink” out ready to buy novell since they beat sco in court. microsoft wants someone friendly to get a hold of the unix copyrights. even thought it won’t do them any good it will give them just another limb of power in their minds.
someone tell me why when you buy esx vmware server you have to have windows box to get to the conosole of a linux vm that is running on the server. why don’t they make software for linux so a company does not have to buy a windows license. sick of this crap it is so 1980′s but microsoft still sticks with this stragety.
Would oracle still be interested in Novell? Larry was looking at it about 4 years ago.
http://www.tomshardware.co.uk/oracle-confirms-sights-set-on-novell,news-19821.html
Suezz: The VAR Guy doesn’t necessarily agree with your various vendor descriptions but our resident blogger appreciates your readership.
Kris: Oracle buy NOVL? The VAR Guy doubts it. Oracle has never been much about infrastructure software. Seems like databases, middleware and applications keep Oracle happy.
All readers: The VAR Guy had to chuckle just a bit when he read CRN’s July 2 “coverage” of VMware and Novell possibly hooking up. The CRN report looked very familiar to our resident blogger… Can’t reporters at least Credit The VAR Guy when they’re lifting, um, re-reporting his material?
-TVG
In this economic climate, I not sure anyone would pony up $2B+ to buy Novell, unless they wanted to sell off the pieces like Elliott Associates (New York hedge fund) probably would have done if their $2B offer had been accepted and approved. Elliott Associates also owned 8 percent of Novell’s outstanding shares at the time they made the offer, so they had some skin the game.
Historically, Novell has been linked to a number of mergers. Past suitors included Lotus (almost happened), IBM, Sun and the infamous Microsoft-Novell merger, which when it failed created a lot of personal animosity between Ray Noorda and Bill Gates.
The rumor regarding VMware and Novell seems completely off the wall. If Novell was a one-product company, like it was back in the days when NetWare ruled, I could understand it. The Novell of the 21st century has a lot of “moving parts” and acquiring the company would put VMware into all sorts of businesses they may have no interest in being involved in, which would mean selling off what they didn’t want in order to keep what they wanted. But to do that they would have to pay “full value” for Novell by buying the entire company. It just doesn’t make sense.
Aside from Novell Identity Manager, Novell Cloud Security Service (just shipping) and Novell Cloud Manager (shipping in Q4 2010) and PlateSpin, just what would VMware want with the remainder of Novell’s product lineup? If it was April 1st I’d write this off as just another high-tech April fools joke. But since it is July, I think it was just a really bad and unfounded rumor.
Tim: The VAR Guy agrees. In his original blog post, The VAR Guy said he thinks the VMware-Novell rumor was only that… a rumor. But our resident blogger said the same thing about Oracle-Sun more than a year ago. No way would Larry Ellison acquire Sun… Boy was The VAR Guy wrong on that one.
-TVG