Practical Technology

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Who really bought Novell? Microsoft.


Who really bought Novell? Of course, I know that Attachmate is the company that’s on record as purchasing Novell for $2.2-billion, while Microsoft shelled out $450 million for some Novell intellectual property. But tell me, where did Attachmate get $2.2-billion? Could it have been Microsoft? I think so.

I’ve covered Attachmate over the years, so I knew who they were when the news broke that Attachmate had purchased Novell. What I couldn’t see was where the heck they had gotten the money for the deal. Attachmate’s main business over the years has been software terminal emulation. That’s a business line that’s been dying ever since the Web came along in the early 90s.

I mean who needs to emulate a mainframe 3270 terminal, a mini-computer VT-102 terminal, or even a Windows-based X-term today? There are only a handful of people who still need that kind of thing. In short, even with its NetIQ systems and security management subsidiary, Attachmate is a niche company in a declining industry segment. There’s no way they had a spare billion and change to buy Novell.

There’s also no real synergy between Attachmate’s offerings and Novell’s. From a business standpoint this is a deal that might have made sense in the late 80s or early 90s, when PC-based X-terminals were much more useful in working with Unix and Linux servers. Today, the deal, as its being presented to the public, makes no sense to me.

Unless, of course, Microsoft is the company that’s actually controlling the purse strings. Then, the deal makes perfect sense.

First, it’s a great tactical move because it keeps Novell SUSE Linux out of the hands of VMware. The last thing Microsoft wanted was for VMware, its major cloud and virtualization rival, to have a major operating system to offer to its customers. Microsoft is having a hard enough time getting its Hyper-V virtualization and Azure cloud marketing story straight without having to compete with the one-two punch of VMware and SUSE Linux.

There’s also a strategic move here as well. Had VMware, or some other strong, independent company, picked up SUSE Linux, the new owner might well have distanced itself from Novell’s partnership with Microsoft. Microsoft wants that bridge into Linux. In its ideal world, Microsoft would have everyone running Windows Server 2008 R2 on their servers, but Microsoft is practical enough to know that’s not going to happen. Thanks to its Novell partnership, it’s been able to offer customers Linux and Windows interoperability.

So, why didn’t Microsoft just buy out Novell itself? Because it couldn’t. Any such move would have triggered a long, nasty anti-trust suit and that’s not a lawsuit that Microsoft could have won.

Microsoft might have been able to get away with buying a Linux company, but don’t forget that Novell also owns Unix’s intellectual property. While the pure Unix operating systems, like Solaris and AIX, are declining in the marketplace, their descendants, which include everything from Linux to Mac OS X, are everywhere.

Instead Microsoft used Attachmate as a proxy to take Novell off the operating system chess board as an independent Linux company. At the same time, it retains enough direct and in-direct control of Novell and its intellectual property to put them into play if needed to put trouble into Red Hat, Android, or Ubuntu’s paths.

I don’t have a bit of proof for this mind you. Both Attachmate and Microsoft are being remarkably close-mouthed about what exactly they’ve bought and what they plan for their pieces of Novell. What I do have is decades of watching Microsoft bully its opposition. From that viewpoint, this seems like a logical Microsoft move.

Maybe I’m wrong. If I am, events will prove me to be off-base. I fear I’m not and this move will end up hurting all Linux companies. Time will tell.

A version of this story first appeared in ComputerWorld.>

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