The $136 Million Linux Company You Don’t Know
Few people realize it, but a certain software company has generated $136 million in Linux-oriented sales during the past four quarters. Plus, the mystery company’s Linux sales essentially doubled in 2Q 2009 vs. 2Q 2007. Impressive. So why isn’t this mystery company a Wall Street darling? Here’s the scoop from The VAR Guy.
First, some fast stats: The mystery company’s Linux-oriented sales essentially doubled from $19 million in 2Q 2007, to $37 million in 2Q 2009. That growth is revealed in the following chart…
Mystery Company’s Quarterly Linux Sales, US Dollars (In Millions)
Big Growth, Little Buzz
With that type of Linux sales growth, you’d think The VAR Guy’s mystery company would rank among the hottest players on Wall Street and in the IT channel. But in reality, the mystery company’s stock has fallen roughly 50 percent over the past two years, according to Yahoo Finance. Ouch.
So what’s gone wrong? Three words: Perception And Legacy. The VAR Guy’s mystery company is Novell.
Novell’s Bigger Challenges
The chart below shows Novell’s bigger challenge. The data compares Novell’s total quarterly revenues (in red) vs. Linux revenues (in blue):
No doubt, the red/blue chart sum’s up Novell’s biggest challenge. Despite fast Linux sales growth, the open source operating system is still only a small fraction of Novell’s overall quarterly sales.
So when analysts, media and IT partners read about Novell’s overall financial performance, they hear about mixed revenue and net income results. But they often fail to realize just how quickly Novell’s Linux business has grown.
Memo to Novell: Start showing the quarterly Linux sales growth more clearly in all of Novell’s open source marketing and partner materials. Your progress may wind up surprising quite a few partners — and you may even win over some skeptics.
Microsoft And Red Hat, Oh My
Of course, The VAR Guy has graciously danced around some conspiracy theories suggesting the Microsoft-Novell relationship represents the bulk of Novell’s Linux sales growth. At this point, The VAR Guy doesn’t believe the alleged conspiracy… SUSE Linux is selling because customers want it, not because Microsoft is buying it.
Also, our resident blogger hasn’t offered up stats for Red Hat’s quarterly sales growth. No doubt, Red Hat’s top line and bottom line results are more impressive than Novell’s results. But cut The VAR Guy some slack. The point of this blog entry was to show how mixed perception of Novell’s business may not match the reality of Novell’s SUSE Linux sales.