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Doc Searls/SuitWatch: Novell eats SuSE. Now What?

Dave Aiello wrote, "In the latest edition of the Linux Journal newsletter called SuitWatch, Doc Searls reports on the acquisition of SuSE by Novell and what it means for the IT industry and the Linux community. A number of leading Linux business people and market analysts are quoted, including Craig Burton, Phil Windley, Ian Murdock, and Dave Aiello (that's me)."

"Here's the portion of the newsletter where I'm quoted:"

Dave Aiello, president of CTDATA: http://ctdata.com/ (a Linux-savvy company that builds database-driven Web sites for companies in the New York Metro area) sees the buy as an Open Source community play:
I think you have to look at the SuSE acquisition in the same light as the release by IBM of Eclipse as a free product. A network effects calculation is being done here. I think IBM looked at Eclipse and said, this product has greater value to us if it's in the hands of [the] Open Source community than if we keep selling it. If we keep total control of it, we have to enhance it, market it, and provide for the development of ancillary products from our own resources.

If the product is backed by an Open Source community, the founders
get the benefit of free labor, free product enhancement ideas, and
ancillary product branches that they don't have to support unless
the company has an overwhelming interest.

I think this is what's happened with Netscape->Mozilla and
WebSphere Studio App Developer -> Eclipse. It is what Red Hat hopes
will happen with Fedora, and ultimately, what IBM is hoping for
with SuSE. I think IBM's ultimate interest is in having a credible
alternative to Red Hat that they have substantial influence over,
without having the overhead of developing internally.

This is more about addressing customer CIO level concerns about not
repeating the Wintel single source market than about the fact that
IBM doesn't like Red Hat's Enterprise Linux strategy, per se.

Dave Aiello continued, "If this doesn't make complete sense to you, I'll provide a little background. When he was writing the piece, Doc asked me what I thought and told me that he needed a response ASAP. So, he got a stream of consciousness. In a followup email to him, I said:"

I think it's interesting that most people {that you quoted in your SuitWatch piece} were talking about Novell's reason for doing the deal and not really addressing IBM's reasons. Maybe I assumed too much in the community's knowlegde of IBM's interest in SuSE. Correct me if I'm wrong, but, wasn't SuSE the first distribution that supported some IBM hardware platforms? I know Red Hat Enterprise Server supports the IBM midrange servers and mainframes now, as does SuSE. But, wasn't SuSE the only distribution that ran on the IBM iSeries and pSeries for a long time? These are the midrange machines that otherwise run AS/400 applications. This is a really valuable segment of IBM's hardware business, even if the machines are part of legacy architectures, more or less.

Dave Aiello continued, "So, I'm saying that the support that the SuSE distributions give to certain IBM hardware architectures is worth more to IBM than the $50 million that IBM just invested in convertible preferred stock in Novell."

"Back to the newsletter. Doc has done an excellent job of pulling together wide-ranging opinions. He's weaved them together with some personal insights and given us a good idea where he stands on the issues that are apparent in this acquisition."

"The jury's going to be out on this transaction for a long time, partly because it's so complicated. Wasn't it great, back in the old days when Allied Nut Company bought United Bolt? That was when deals were clean and you could truly measure the outcome a little way down the road."

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