Novell’s Positive Surprise
Well, The VAR Guy is eating a healthy serving of crow today. He’s been negative on Novell for a few years, and he frequently questioned the company’s open source software strategy. But according to a new piece of financial news, the Linux provider is performing better than Wall Street expected. Here’s the scoop, which surprised our resident blogger.
Novell raised its fiscal 2008 sales outlook Thursday, citing its purchase of Toronto-based PlateSpin Ltd. and fiscal first-quarter results, according to the Associated Press. The company now expects annual revenue of $940 million to $970 million, compared with an earlier estimate of $920 million to $945 million, AP reports.
The news comes at a particularly embarrassing time for The VAR Guy. A few weeks ago, he slammed Novell for failing to have a clear open source application strategy amid Sun’s buyout of MySQL. Novell Chief Marketing Officer John Dragoon responded by outlining the company’s broader middleware and security strategy, and its relation to SuSE Linux. A few days later, Novell Channel Chief Pat Bernard outlined her four-point plan for rebuilding Novell’s channel.
Now comes word that Novell’s current-year revenue will likely be higher than originally anticipated.
Does that mean Novell is a powerhouse again? Let’s not get ahead of ourself. The problem with the media (including The VAR Guy, sometimes) is that we like to put companies into clear categories: Winners and Losers. Look at the current situation over at Yahoo! Sure, Google is a far brighter star than Yahoo! these days, so the media paints Yahoo! as a loser and a has-been. The VAR Guy wishes he could build a loser company that attracts a $40 billion takeover offer.
Now back to Novell. The VAR Guy still is generally down on the company. Red Hat and Ubuntu remain the much hotter plays in the Linux market, he believes. But if you believe Novell’s latest financial forecast, it’s pretty clear that the market has embraced Novell SuSE Linux as well.
Even without the Microsoft partnership, Dragoon has pointed out, SuSE Linux sales are growing as fast as the market — or potentially slightly faster, he estimates.
This isn’t the Novell powerhouse of the early 1990s. But based on today’s financial news, perhaps it’s time for The VAR Guy to keep an more open mind on Novell’s business prospects.