Novell's strategy laid bare
Published: 17 Feb 2005 13:50 GMT
But how are you doing on revenue?
The key reason for getting into the Linux business in the first place was figuring out what to do with the decline of NetWare. We won't know whether that strategy is working until we ship the OES (Open Enterprise Server) product at the beginning of next month. We hope that will arrest the decline of NetWare. We're expecting that's going to happen. Even though revenues are up 2 to 3 percent, embedded that is a 10 to 15 percent decline in the quarter from NetWare. If you separated out NetWare, the rest of the business grew at 10 percent.
One of the goals of the SuSE acquisition was to combine it with Novell's marketing power in North America to take on Red Hat. How is SuSE doing in North America now?
Red Hat had a seven- or eight-year lead. I don't think people switch that quickly in the infrastructure market. I think the differences we have are just starting to show up in the marketplace. We've only owned SuSE for 13 months.
The best advertising we did last year was the acquisition of SuSE Linux. Now we're in the process of bringing out the differentiators. The SuSE Linux kernel (the heart of Linux) is the same for everybody, so the question is what do you have that makes the difference? We've got worldwide service, we've got a consulting organisation, a software stack with file and print and messaging and directory, we offer indemnity that Red Hat can't offer, because we used to own Unix. And we have a patent portfolio they don't have.
We've been gaining every month. The progress hasn't been as good as I liked. Pricing has come down, so we don't see the growth that we would have. We've signed some [computer maker] partners, and it takes a while for them to get to speed. The number of software partners increased significantly from 46 in 2003 to 531 in 2004. We have 1,100 applications certified on SuSE Linux.
With our sales force, we've reorganised how we go to market. We were focused on maintaining the revenue stream from NetWare. Now we're focused on selling new stuff like Linux and identity management. We're in the middle of a two-year transition in our sales force. And the channel (sales partners) is really interested in Linux. They made a lot of money switching NetWare customers to Windows customers. Now they're interested in switching Windows customers to Linux customers.
You don't seem eager to enter the embedded Linux market (for computing devices such as mobile phones or slot machines).
We've got so many opportunities. Do we want to take on another one? I'm not disparaging of the market.
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