From: Burak Su (buraxu@buraxu.com)
Date: Tue 09 May 2006 - 11:32:59 GMT
Will Novell be acquired by Oracle?
(Salt Lake Tribune, The (KRT) Via Thomson Dialog NewsEdge) Apr.
18--Oracle CEO Larry Ellison's comments that Novell and its Linux
holdings have been -- and still may be -- on his short list for
acquisition had investors and analysts scrambling Monday.
Stock in Novell, which has operations in Utah and is the world's No. 2
Linux distributor, closed at $7.68 per share, up 17 cents, or 2 percent.
Oracle edged up 6 cents, to $13.74, but Red Hat, the world's leading
Linux company, saw its stock slip to $28.51 per share -- down $2.04, or
7 percent.
Trading figures alone couldn't begin to reflect the buzz set off by
Ellison's acknowledgement in a Financial Times of London interview that
Oracle will either develop its own version of the freely distributed
Linux operating system, or acquire one to compete with the growing Red
Hat Inc.
Ellison said that adding major Linux distribution, such as Novell's SUSE
version, was important to fleshing out his $11.8 billion company's
current software "stack," or inventory. The goal would be to offer both
an operating system and associated programs that would better compete
with longtime market dominator Microsoft Windows.
"We're missing an operating system. You could argue that it makes a lot
of sense for us to look at distributing and supporting Linux," Ellison
said, adding that Oracle had recently considered buying the $1.2 billion
Novell to quickly fill its product line gap.
The comments came on the heels of Red Hat's $350 million acquisition
last week of JBoss, another competitor offering "middleware" -- programs
that connect various applications developed by the "open source," or
freely distributed, software community.
News that Novell might be in Ellison's sights also followed by just days
news of Oracle's $220 million acquisition of Portal Software, a
communications industry company.
Oracle spokeswoman Deborah Hellinger refused to say Monday whether her
Redwood Shores, Calif., company had made overtures to Novell in recent
months, or whether Ellison -- who also mused about Oracle developing its
own Linux suite -- was still interested in Novell.
"We are going to have to decline to comment beyond what Larry already
said," Hellinger said,
Novell spokesman Bruce Lowry also declined to say whether Oracle had
recently wooed his employer, which employs about 1,600 Utahns.
"Novell is periodically talked about as an acquisition target, and we
never comment on such speculation," he said. "We remain fully focused on
our core business of Linux and open source, and security and identity
management."
John Enck, vice president of Gartner Research, said buying Novell would
be "consistent with Oracle's direction."
"If Oracle were to acquire Novell, they would offer a complete and fully
functional out-of-the-box solution," he added. "Would Novell welcome
this acquisition? Probably not. Would that stop Ellison from doing it?
Not likely."
Dave Rosenberg, principal analyst for Open Source Development Labs,
allows that "Larry [Ellison] knows what gets attention."
"He runs a successful organization that has been making some big waves
lately. . . but from what we've seen in open source, things are really
hot," Rosenberg added. "What this shows is how important Linux and open
source have become to large software vendors and the market in general."
Red Hat, too, chose not to discuss the impact of a potential
Oracle/Novell merger.
But Bruce Perens, a Linux developer and longtime open source spokesman,
said there was little doubt an Oracle-Novell deal could shake up the
operating system landscape, where Windows enjoys an 85 percent to 90
percent share of the market.
"Novell has been interesting," Perens said, referring to the company's
co-development of SUSE with a looseknit, global network of open-source
programmers. "But it's not been as big as it could be. Oracle could
change all that."
ORACLE AND NOVELL
--By acquiring Novell, Oracle would quickly add the company's critically
acclaimed SUSE Linux operating system to its family of computer programs
and applications.
--With SUSE, the No. 2 Linux distributor, in its software quiver, Oracle
would better be able to compete with No. 1 Red Hat for leadership in the
"open source," or freely developed, software community.
--Ultimately, stronger, more complete Linux software suites could
finally put the alternative operating system in a position to seriously
challenge Microsoft's long-dominant Windows desktop environment. Windows
has 85 percent to 90 percent of that market.
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