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 Channel Futures

Open Source


Novell Attacks Red Hat With Linux Migration Offer

  • Written by The VAR Guy 1
  • November 11, 2008

Novell is reaching out to Red Hat customers and Microsoft channel partners with a new offer. The strategy: Train Microsoft solutions providers to replace Red Hat Enterprise Linux with Novell SUSE Linux. Here’s the scoop on the strategy.

Officially, Novell says it has a:

“new subscription and support program designed to aid customers making the transition from their existing third-party Linux* distribution to SUSE® Linux Enterprise Server.

The SUSE Linux Enterprise Server Subscription with Expanded Support program includes a three-year subscription to SUSE Linux Enterprise Server that provides technical support for a customer’s existing Linux deployments for up to two years while they make the transition to SUSE Linux Enterprise.”

Straight Talk?

Now for let’s cut to the chase. The VAR Guy spoke with Justin Steinman, VP of solution and product marketing at Novell, to get his unfiltered take on the Red Hat-to-Novell initiative. Here are some highlights.

  • Attacking Red Hat: Novell took 3 percent market share from Red Hat last year without any formalized programs in place, Steinman claims. With this new initiative in place, Novell hopes to take another 3 percent to 5 percent market share from Red Hat in 2009, he adds.
  • Seeking Microsoft Channel Partners: Moving customers from Red Hat to Novell SUSE Linux is not a direct sales play.  Rather, Novell is seeking to recruit and train Microsoft solutions providers that can accelerate migrations from Red Hat to Novell.

“Whenever you’re going to migrate from A to B there’s a services opportunity,” says Steinman. “There are Red Hat solutions providers out there, but there are also Microsoft solutions providers looking to add a Linux practice. This is a way to start that practice.”

  • Tools of the Trade: Novell will offer solutions providers a range of migration tools, technology guides and best practices to train partners on proper Linux migration strategies.

Novell says the migration program is available today and it involves a worldwide migration initiative.

Spin City?

So, did Novell really steal market share from Red Hat last year? And can the company really hope to take 3 to 5 percent market share from Red Hat over the next 12 months?

Frankly, The VAR Guy doesn’t have the answers to those questions. He does know that Novell has been growing faster than the overall Linux market. And Lenovo recently introduced servers with Novell SUSE Linux rather than Red Hat Enterprise Linux.

But let’s not weep for Red Hat. That company topped financial estimates in its most recent quarter, and many corporate CIOs see Red Hat as the most valuable software partner in terms of delivering bang for the buck.

Still, Novell’s close alignment with Microsoft — initially criticized by The VAR Guy — seems to be paying dividends as Novell finds itself in more and more corporate data centers. Now, Microsoft solutions providers could give Novell another boost in the IT channel.

How will Red Hat respond? The VAR Guy just sent the company a note, and he’s hoping to instigate an open source brawl that benefits customers and the channel. Competition, folks, is a good thing.

The VAR Guy is updated multiple times daily. Don’t miss a single post. Subscribe to his newsletter, RSS and Twitter feed.

Tags: Agents Cloud Service Providers MSPs VARs/SIs Open Source

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16 comments

  1. Avatar The VAR Guy November 11, 2008 @ 10:06 pm
    Reply

    Update: NOVL will announce Q4 results on Dec. 4, which will help to clarify SUSE Linux momentum in the market. Also, The VAR Guy has reached out to Red Hat to give them equal time.

  2. Avatar Not a fan now November 11, 2008 @ 11:18 pm
    Reply

    Now really. Where are the numbers? Two years into the agreement and Novell has shown no significant increase in revenue where Red Hat has shown double digit growth in subscription revenue.

    With the reduction in partner facing staff, yet another change in the programs, and the revolving door in the channel VP slot do you really think Novell is poised to execute this year differently than any other? Not to mention having someone like Justin Steinman with NO experience in open source except for his tenure at Novell and no background in marketing, he’s not likely to feed you anything of substance.

    MS partners make a ton of money from a crappy OS and the MS hype. Do you really think Novell has enough money to pay them to move? Novell will continue to show lackluster performance and failure to execute. Ubuntu will take the 2nd spot in the server space within two years and Novell will have no more sales staff after this fiscal year since they have almost cut through the bone.

    Short the stock…oh wait, it can’t go down much further.

  3. Avatar Matt Asay November 11, 2008 @ 11:45 pm
    Reply

    I agree that the Microsoft agreement has been good for Novell, but 3-5% market share from Red Hat? Not a chance. You just have to look at Red Hat’s growth to find the suggestion weird.

  4. Avatar The VAR Guy November 12, 2008 @ 2:09 am
    Reply

    Matt: It’s hard for The VAR Guy to argue with the man who walks down The Open Road. Our resident blogger isn’t siding with Novell or Red Hat. And he hopes to hear Red Hat’s side of the story soon. Stay tuned.

  5. Avatar The VAR Guy November 12, 2008 @ 2:43 am
    Reply

    Two Updates:

    1. From Novell: The company points to market share numbers from IDC, suggesting Red Hat’s worldwide Linux server market share was 62.1% in 2007 down from 64.2% in 2006. In contrast, IDC says Novell’s worldwide Linux server share rose to 29% in 2007 from 26.1% in 2006.

    2. From Red Hat: A spokeswoman says Red Hat has “no comment” on Novell’s claims and business strategy. Frankly, The VAR Guy enjoyed the response. It was was for Red Hat to take the high road and compete in the market rather than in the media.

  6. Avatar Dennis Byron November 12, 2008 @ 12:22 pm
    Reply

    Var Guy,

    Did Novell says whether IDC was measuring server software (money or instances??) or actual servers with a particular brand of Linux pre-loaded or ?????. I don’t doubt the market-share statistic (in fact I think it may be low) but I think it is skewed by the fact that one large “customer,” Microsoft, is buying all those licenses.

    Also it’s good for Novell to have training/sales programs but I am not sure Linux-Linux migration programs are going to matter much here. The big movement in the market is still Unix to Linux.

    Dennis

  7. Avatar The VAR Guy November 12, 2008 @ 2:17 pm
    Reply

    Dennis: Great questions. Here are a few answers. The IDC data is based on “worldwide Linux server operating environment new license paid shipments/subscriptions and nonpaid deployments by vendor, 2004-2007.”

    The VAR Guy assumes the sales numbers include the MSFT license purchases from Novell. But note: Novell Chief Marketing Officer John Dragoon has stated that even without the Microsoft license purchases, Novell’s Linux business would be growing as fast as — or faster than — the overall Linux market.

    Whenever The VAR Guy sees research reports — especially when open source is involved — he treats them as “educated guesses” rather than facts. The world has changed. Measuring operating system shipments/preloads in the 1990s was pretty easy. But now a range of factors (downloads, free options, virtualization) makes it very, very difficult to accurately gauge market share figures.

    Overall the best way to gauge success is to watch Novell and Red Hat revenue figures tied directly to Linux, The VAR Guy believes.

  8. Avatar Rufus Polson November 12, 2008 @ 5:06 pm
    Reply

    Whether they can do it or not, this strikes me as exactly the kind of thing that has people mad at, and suspicious of, Novell. Traditionally Linux vendors have concentrated on increasing the Linux market share at the expense of other competitors such as Microsoft Windows, Solaris etc. rather than on eating one another. Now we have Novell specifically announcing that its objective is to team up with Microsoft to take market share from another Linux vendor.
    People who like open source are not going to be enthusiastic about a Linux vendor that prefers to get Microsoft’s help to cannibalize the existing Linux market rather than expand Linux’s presence. I would be one of them.

  9. Avatar Sum Yung Gai November 12, 2008 @ 9:31 pm
    Reply

    Rufus, we’re not Novell’s target. CXO’s are. They don’t give a rip about the ethics/morals of Free Software or even Open Source. If someone’s gonna give ’em a freebie or close to it, they’re gonna take it. And if it’s a Microsoft partner doing it, that gives these CXO’s a warm fuzzy.

    –SYG.

  10. Avatar Ian MacGregor November 13, 2008 @ 12:55 am
    Reply

    Aha, the plot emerges.. Microsoft is attempting to kill off Red Hat. I knew there was a reason Microsoft wanted Novell.

    Any friend of Microsoft is an enemy of mine. The enemy of my enemy is my friend. I’ll stick with Linux.

  11. Avatar matthorany November 14, 2008 @ 4:29 pm
    Reply

    I don’t think this is an attack from Novell at all. It’s not like they are putting out a publication that says “Red Hat” stinks, use us instead. But they are offering migration tools and an incentive to people who are considering it. It’s a good move for Novell in my opinion. OES 2 on SLES10 is a super solid product in my opinion. It’s the backbone of our data and distribution center. Maybe it would have been the same if we had gone Red Hat, but would the support be there? Novell has a pretty nice support package not to mention extensive documentation on their website. That alone is a deciding factor in my opinion.

  12. Avatar HurdyGurdy November 14, 2008 @ 9:18 pm
    Reply

    I have learned that if you accidentally make the wrong play in Microsoft Solitare, you can click Game/Undo and this will reverse your last play. I thought since I was on this blog about something that has no money in it, I would add my two cents. Actually, you are much better spending your time playing Solitare waiting for that money call to come in, instead of talking to your Novell rep, instead of reading up on the latest Novell features, instead of discussing the benefits of Novell with the enduser, etc. As these activities prove to be a complete waste of time for the small VAR. See, I just wasted time on this board, when my time would have been better spent playing Solitare. I make the same amount of money either way. Well I guess it is back to playing solitare waiting for the money call to come….

  13. Avatar HurdyGurdy November 15, 2008 @ 12:16 am
    Reply

    Is it OK to be a big fan of ‘Not a fan now’ due to the stellar post above? I thought I knew alot about this stuff, but this poster really knows their stuff. I can also brag that I did make money on this stock, but the last trade I made on it was hair-raising. I bought it at 10, it went down to around 5, forever, and then shot up for a brief time to 12. I bailed around 11 or 12 and never looked back. I do not believe it has been above 10 since.

  14. Avatar The VAR Guy November 15, 2008 @ 12:32 am
    Reply

    HurdyGurdy: you are permitted to be a big fan of “Not a fan now” if you continue reading TheVARguy.com

  15. Avatar HurdyGurdy November 15, 2008 @ 11:14 pm
    Reply

    I like your energy, wit, and enthusiasm VARGuy, but tell me what I can sell or recommend to my customer that will benefit both the customer and myself, the reseller. Novell doesn’t benefit either right now the way I see it. They need a formula for success for the small reseller and not only do they not have a plan for the small VAR, there continues to be a threat that some bigger Novell reseller is going to call my customer and offer lower pricing, and the only solution, at hand, is to switch the enduser to Microsoft. They need a 1-800-I-AM-GOING-TO-SWITCH-MY-NOVELL-CUSTOMER-TO-MICROSOFT-UNLESS-I-CAN-GET-A-BETTER-MARGIN phone line, kinda like the batphone. That way the small reseller can at least call this number and hopefully get a sympathetic Novell representative that can actually do something. And if not, then at least they would have a better feel of how much business they are losing. But they have needed this hotline number for the last decade, so maybe it’s too late now. Maybe there will be an Open Source company that understands the reseller channel that will take over the reins from Novell. Novell created the reseller channel, but, unfortunately now they are a minor/marginal player, and without this buddy/buddy thing going on with Microsoft they could be gone. I wonder how long the buddy-buddy thing with Microsoft will last. Only time will tell…

  16. Avatar The VAR Guy November 16, 2008 @ 2:49 am
    Reply

    HurdyGurdy: The VAR Guy thinks Novell needs to buddy up with ISVs more closely so that SUSE Linux has a stronger application story that will drive CIOs from Red Hat to Novell. SAP is one such example of a company that aggressively supports Novell. More outspoken partners like that are needed.

    Oh, and thanks for the nice plug about The VAR Guy’s energy, wit and enthusiasm. Our resident blogger enjoys a good laugh as much as the next (VAR) guy.

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