VMware should buy Novell

August 30, 2010 12:10 PM EDT
Novell's history has been full of ups and downs. Once, with NetWare, it was the networking operating system powerhouse. Then they tried to be a consulting company. More recently, Novell has been both a Linux company and a friend to Microsoft.

VMware has long been the go-to business virtualization company. But now everyone is in the virtualization business. I think VMware should look into providing more of a complete software stack by buying its new best buddy, Novell.

Novell has certainly been looking for a buyer. While the company still has almost a billion in the bank, it's not been doing that well in the market. Red Hat, not Novell, is still the big-time business Linux company. Novell is important — the company is especially strong in IBM's mainframe Linux space. But as the last Novell earnings report showed, it's still not doing as well as its shareholders would like.

On the other hand, VMware has been doing quite well. But I continue to wonder just how long VMware can withstand the pressure from so many competitors. There's Microsoft with Hyper-V, Red Hat with KVM, Citrix with Xen, and Oracle with VirtualBox and Oracle VM. Even if VMware's software is worlds better than the competition — and I don't think it is — everyone else is offering virtualization for free or as part of a bundle.

How long can VMware keep going on virtualization alone? I'm surprised they've made it this long. I can't see how they can keep doing it.

Unless, of course, they join Oracle, IBM, Red Hat and Microsoft in providing a complete business software track. VMware could take a big step in doing that by adding Novell and its SUSE Linux lines and its associated networking programs like ZENworks and GroupWise.

VMware and Novell have already partnered to bring SUSE Linux Enterprise Server (SLES) to VMware vSphere virtual machines. During Novell's earnings call, Novell CEO Ron Hovsepian said that VMware sales staff has incentives to sell SUSE support and services to their customers. Hovsepian added that VMware and Novell would expand on what's going on with their partnership at this coming week's VMworld trade show.

Could the two companies announce a merger? There have been rumors for some time that VMware might buy Novell. I don't know much about those rumors, but I do know that it's a deal that makes a lot of sense for both companies.

Stay tuned. This may prove to be an interesting week in the Linux business.