Not many in the IT industry were ready to believe that Novell Inc. was betting its return to enterprise computing prominence on a freely obtainable operating system.
But seeing is believing. At Novell's recent annual BrainShare user conference, CEO Jack Messman declared that 2004 was the year for Linux and subsequently staked his company's future on it.
Novell, whose NetWare network server operating system lost the bulk of its market share to Windows NT in the 1990s, went into BrainShare fresh off its prominent acquisitions of No. 2 Linux distributor SuSE Linux AG and Ximian Corp.
Since then, Novell has been a model citizen in the open source community, releasing three important tools to open source and setting the stage for an interesting tussle for title of top Linux distributor with Red Hat Inc.
"Red Hat is no longer an obvious choice as a distribution," said Justin Hahn, a Unix and Linux consultant in New York. "With Novell in the market, there is definitely the sense there is a vendor that is here to play and here to stay."
Novell adds engineering, sales and support muscle that SuSE could never have promised its customers, despite its strong European presence and standing in the industry. Novell also has a solid product lineup that it can sell on top of its Linux platform.
Yet observers are anxious to see whether Novell can pull off a profitable recovery. Selling Linux is a zero-profit game, one that Novell and analysts acknowledge. Vendors can only make money supporting and servicing Linux or selling applications on top of it.
"They are making a huge bet and are changing the direction of the company," said Gary Hein, vice president of the application platform strategies group at Burton Group. "It's theirs to lose. They have all the pieces, so they just have to execute and develop the market wider to sell [Linux]."
Hein argues that Novell's biggest challenge going forward will be selling its identity management, collaboration and desktop software and services on top of Linux.
"It's similar to the double-sell; you have to sell the platform and the solution to an IT decision maker," Hein said. "It's a huge risk for Novell. What if Linux does not meet the challenges of the market? Novell is dead in the water."
Then late last year, Novell announced its intention to acquire SuSE, giving it solid desktop and server products to pursue the enterprise Linux market.
Further proving its commitment to Linux, Novell has released SuSE's YaST (Yet another Setup Tool) systems management and configuration tool to open source, along with the Ximian Connector for Exchange, which connects Evolution systems to Exchange servers, facilitating the introduction of Linux desktops into a Linux environment. Novell has also released iFolders, a file-sharing system to open source.
But these are more than gestures of goodwill to the community. Novell has turned these products loose for the industry to contribute development and features that will eventually be sold and supported as Novell products.
"These are very significant gestures. They're a sign that Novell understands the Linux paradigm very well, and that they're committed to it," Hahn said. "It would have been somewhat distressing had they taken a proprietary tack. By doing this, they have signaled very clearly that they mean to cooperate in the market, not co-opt it."