The possible purchase was suggested by Sun President Jonathan Schwartz in interviews with the Wall Street Journal. So far, Novell has been mute on this possibility. Acquiring Novell would cost approximately $3 billion.
The idea of Novell being acquired by IBM, Sun or another company is spreading on the internet like wild fire after being sparked by Schwartz in his company blog on Sunday. He didn’t actually say Sun was interested in acquiring Novell but he might as well have. Both stocks have been up and then down as reality starts to smack rumor hungry investors over the head.
In his blog Schwartz comments, “IBM is in a real pickle. Red Hat’s dominance leaves IBM almost entirely dependent upon SuSe/Novell. Whoever owns Novell controls the OS on which IBM’s future depends. Now that’s an interesting thought, isn’t it?”
The Sun President goes on to say, “But if IBM preemptively acquires Novell/SuSe, the world changes: linux enters the product portfolio of a patent litigator not known for being a social-movement company. But where else will IBM go? With it’s current market cap, Red Hat seems unacquirable – but absent action, IBM’s core customers will be eroded by Red Hat’s leverage. And Sun’s ability to leverage our open Solaris platform (on industry standard AMD, Intel or SPARC), or Java Enterprise System, even on IBM’s hardware, gives us a significant – and sustainable – competitive advantage. With the demise of AIX, IBM is once again vulnerable.”
Schwartz ends it with a riddle, “Me, I’d keep a close eye on the Novell/SuSe conversation. If IBM acquires them, the community outrage and customer disaffection is going to be epic… but where else does IBM go?”
What’s interesting to me is not Schwartz comments but the power of blogs … expecially when used by heavy hitter Executives.
murdok is the CEO of Murdok, Inc. which publishes over 200 websites and email newsletters.
Rich also publishes his blog WebProBlog which focuses on internet business and marketing trends.
