Sun wants to buy Novell
Published: 02 Aug 2004 08:45 BST
Sun Microsystems is toying with the idea of buying Linux seller Novell, saying that springing for the $2.64bn (£1.45bn) company would hurt rival IBM.
"With our balance sheet, we're considering all our options," Sun chief operating officer Jonathan Schwartz said in an interview on Sunday regarding the possibility of acquiring Novell. "What would owning the operating system on which IBM is dependent be worth? History would suggest we look to Microsoft for comparisons," he said.
IBM famously relied on Microsoft for an operating system for its personal computers. Schwartz said in a blog posting on Sunday that IBM relies on Novell's SuSE Linux as a competition to keep No. 1 Linux seller Red Hat from growing too strong.
But several factors could reduce the likelihood of such an acquisition. First, though Sun has cash and marketable securities of $7.61bn, Novell isn't cheap, with a market capitalisation of $2.64bn as of July 30.
And the company had an opportunity to buy SuSE Linux for much less in 2003 -- indeed, it made an offer that Schwartz said forced Novell to increase its $130m bid. Novell ultimately paid $210m, receiving a $50m investment from IBM as part of the deal.
In addition, Sun's Java Enterprise System servers software heavily overlaps Novell's software line. Schwartz said Novell's non-SuSE products are "far less interesting."
Novell and IBM couldn't immediately be reached for comment Sunday night.
The possible acquisition was first reported by the Wall Street Journal.
Since taking over as Sun's No. 2 executive, Schwartz has worked on several radical changes at Sun, for example, bringing its server software to rival operating systems and bringing its Solaris version of Unix to Intel's Itanium and IBM's Power processors.
Acquiring SuSE Linux, which runs on IBM's Power servers and mainframes, could speed Sun's effort to spread Solaris to other servers, Schwartz said.
Eventually, Sun plans to make Solaris open-source software.
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5 comments
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I'm only a simple guy and I'm confused. Perhaps S... Anonymous -
Sun Doesn't Get IT.
If they own Suse or not,... Peter Nicce -
Sun used to be the company of choice for the guys... Anonymous
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I've seen netware since 2.2, decent file and print... Anonymous
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Nothing in the article made any sense.
Probably j... David Champion
