Novell's SUSE Linux futures

Novell is in trouble. As Novell CFO Dana Russell said during the recent earnings call, "Our Linux business is dependent on large deals, which may result in some fluctuations of our quarterly invoicing. This quarter, we did not sign any large deals, many of which have been historically fulfilled by Microsoft certificates."

Novell first partnered up with Microsoft to boost its Linux business. Now, it appears Novell needs Microsoft to keep its head above water. Still, Novell delivered more of a profit than the analysts had expected, 7 cents per share instead of 6 cents per share, and its open platform sales, aka Linux, totaled $35 million, up 24 percent from a year ago.

Moving ahead, Novell plans on reducing the prices of its products and pushing out the next versions of its commercial Linux: SLES (SUSE Linux Enterprise Server) and SLED (SUSE Linux Enterprise Desktop) 11. To do this, according to sources at Novell, the company does not plan on having any more layoffs.

Still, Russell did say during the earnings call that he wouldn't rule out more layoffs. Perhaps, if Novell really wants to keep its profit margins around 10%. They might want to consider at its top rather than from its developer roots. After all, does Ron Hovsepian, Novell's CEO and president, really need to make $6.9-million in 2009? I like Hovsepian, but I think cutting executive salaries instead of laying off the rank and file is the better move.

After all, to get SLE 11 out the door, Novell needs its programmers. In a conversation with Markus Rex, Novell's Senior VP of its Open Platform Solutions business unit, Rex told me that Novell continues to value the contributions of its openSUSE and that openSUSE 11.1 will be the foundation for SLE.

This means that SLE will be using the 2.6.27.7 Linux kernel. For the desktop, according to Rex, the main interface choices will be GNOME 2.24.1 and KDE 4.1.3. The older KDE 3.5.10 will also be available as an option.

The new SLES may include Citrix's newly free, but not open-source, XenServer virtualization software. Rex would neither confirm nor deny this possibility. Personally, I have no doubt that Novell will be incorporating XenServer into its line-up. It's a technical advance in its own right, it fits in perfectly with Novell's Microsoft partnership, and multiple sources have told me that this move is in the works.

We'll know one way or the other soon enough. Rex said that SLE will be out before the middle of the year.

Technically, I've always liked both openSUSE and SLE, so I'm looking forward to this release. That said, I do wish that Novell steered a business partnership course that kept it further away from Microsoft. As this last quarter has shown, being buddies with Microsoft can be both a good and bad thing.