Sun Micro's MySQL Acquisition Is Bad News for Novell

Sun Micro's (JAVA) move to acquire MySQL is bad news for the folks over at Novell (NOVL). It makes me wonder: Will Novell wake up and start buying open source application providers … or is Novell doomed to repeat the exact same mistakes it made in the 1990s? Alas, Novell in 2008 looks a lot like Novell from a decade ago. That's not good. Here's why.

In the early 1990s, Novell NetWare held nearly 70 percent of the network operating system market. But that market share plummeted because NetWare missed out on the huge server application wave. While Microsoft positioned Windows NT Server to run SQL Server, Exchange Server, Oracle, Lotus Notes and more, Novell was clueless about the application space. Anybody else remember Novell's IntraNetWare and Novonyx embarrassments? Ouch.

Here we go again. While Red Hat (RHT) — and now Sun — expand from the operating system layer into the A) middleware layer or B) application layer, Novell once again is an also-ran. Novell's SuSE Linux is a nice platform with decent growth prospects, but operating systems are yesterday's news. Novell needs to move up the software stack — fast — to stay relevant.

Similar to how Microsoft (MSFT) built its BackOffice business in the 1990s, Novell needs its own suite of server applications for SuSE Linux. Sun beat Novell to the punch with the MySQL acquisition. Stellar move by Sun, since MySQL is the de facto database for most Web 2.0 and open source application deployments. Big setback for Novell, since much of the application market begins with databases.

Of course, Novell still has room to maneuver. Plenty of open source application providers remain independent. But you've got to wonder if anyone running an open source company would be willing to sell to a Novell that has so tightly hitched its wagon to Microsoft.

Perhaps Novell could sell itself — though such statements have been made about the company ever since former CEO Ray Noorda retired in 1994. Rumored buyers over the years have included Sun, IBM and Oracle, just to name a few.

But I don't see that happening. Alas, open source continues to represent a small fraction of Novell's overall revenue. Novell also has a nice footprint in the endpoint security market and the identity management sector. But there again, sales are a fraction of Novell's overall revenue.

Novell ain't dead yet. But the flesh wounds are starting to add up. It's time for the company to get in the applications game.

Disclosure: None

Comments

[Brian Croner]

Knowing Microsoft, some versions of Microsoft SQL Server are likely comprised of portions of GNU GPL source code stolen from the MySQL archives freely available online. If you have SQL Server, considering what Microsoft gets away with here in lawless America, you already have MySQL. Maybe SUN could prove this and then sue Microsoft.

[navatala]

Novell has hitched its wagon to the idm/security market, therefore it is not surprising that they are not going out buying database companies (mySQL) or Webapplication companies (JBOSS) if they where to do this they really would be falling into the trap of the 1980s/90s by spreading themselves to thin and not concentrating on what they consider their core business. Look for them to start spending some of that 1.5 billion on security related /IDM companies.

[richardeholder]

Perhaps instead of jumping on the bandwagon you suggest, Novell has chosen to focus on technologies where they have very strong and differentiated offerings instead of entering markets with established leaders with the "open source alternative" as the only differenciator.

[dflax]

Novell is trying to get its house in order first. They have some strong offerings based on SuSe 10 and their IDM software. That's their calling. Really what has JBOSS done for RH? Nothing really, it's a drag on them long term. Let's see how well MySQL integrates into the Sun system.

[Mr_Zarniwoop]

The logic here is flawed. A change in the ownership of MySQL will have zero impact on Novell, since Sun is very unlikely to turn it into a Solaris-only product. And in fact Sun and Novell have been getting on pretty well together. They cooperate closely on developing Open Office and Sun's own Java Desktop is based on an OEM version of SUSE Linux. To acquire further up the application stack would in fact hurt Novell more, since they would thereby lose their position as neutral "Switzerland"... platform vendor and end up making enemies of other rival application vendors - something Novell really can't afford to do. If Sun wants to battle against Oracle with mySQL, fine. But that's not a game Novell can play.