It may well be a David-versus-Goliath phenomenon, where the underdog market player confronts the giant, armed with more than just a slingshot and a pebble.
With the launch of its SUSE Linux Enterprise 10 (SLE 10), which provides a complete set of enterprise tools from server to desktop, software developer Novell Inc. hopes its open source-based offering will finally break the Windows-dominated operating system market.
Capturing a “significant share of the market” or at least 50 per cent of the pie — from Linux’s current share of two-and-a-half per cent — was the ambitious pronouncement of Novell chairman and CEO Jack Messman, in an interview with ComputerWorld Canada at last month’s annual BrainShare user conference in Salt Lake City.
Messman added, however, that such a market shift was less likely to happen in this decade. “I can’t predict when that (would) occur; it’s not in the next five years…we have a long way to go, but what an opportunity.”
A sequel to SUSE Linux Enterprise 9, SLE 10 comes with pre-installed server and desktop functionalities including Xen 3.0, the open source standard for virtualization services, which allows organizations to consolidate multiple workloads on a single server. Novell said Xen 3.0 increases server utilization to almost 70 per cent.
SLE 10 also includes the open source-based Novell AppArmor, which provides application-level security for both servers and desktops.
On the desktop level, the Novell edition of the OpenOffice.org supports Visual Basic macros in Excel spreadsheets, “closing one of the chief compatibility gaps with Microsoft Office.” SLE 10 also includes an integrated application development kit, for building Linux-based apps, and middleware services including Apache, Geronimo, Java, PHP, Python, TCL/TK, Ruby and shell scripting.
Notwithstanding Linux’s current market share, Novell is poised for “revitalizing its market prospects” with SUSE Linux Enterprise, according to Darin Stahl, research analyst at London, Ont.-based Info-Tech Research.
“The market should never underestimate Novell; it has proven itself to be very resilient,” said Stahl. “The existing SUSE Linux brand offers the company a strong platform to improve its anemic marketing performance.”
He cited Novell’s improved earnings from its SUSE Linux business as clear evidence that its open source strategy is gaining traction.
In its latest quarterly financial report, Novell reported an 11 per cent decline in license revenue from the Open Enterprise Server (OES) and NetWare businesses. But this was not seen as a drawback by Novell, which claimed the drop was actually less than the license revenue losses from previous reporting periods, which averaged between 12 and 15 per cent, said Roger Levy, vice-president and general manager for Novell’s open platform solutions.
He said while NetWare licenses were plunging, OES migration was growing. Novell’s OES offering was intended as a bridge to enable NetWare customers to gradually migrate to SUSE Linux.
“The evidence shows that the OES has slowed down the decline in NetWare,” said Levy. “The growth in OES numbers shows that more and more of our customer base do, in fact, embrace the OES approach.”
But Novell does not plan to abandon NetWare support anytime soon. In his keynote at the BrainShare event, Messman announced his company will continue to support NetWare 6.5 “indefinitely.”
“We knew [NetWare customers] were concerned about the migration and we didn’t want to force them to make the decision, because if you force them and they decide not to go with [Linux], then you lose them,” explained Messman.
With the launch of the SLE 10, Novell also sees an opportunity to take a bite of the huge Windows market. The upcoming release of Microsoft’s next-generation OS Windows Vista would be an opportunity for Microsoft users to consider migrating to Linux rather than upgrading to Vista, said Novell’s Levy.
“Companies have to decide [whether Vista] is the path they want to take or should they look at the direction of going with a solution that doesn’t have vendor lock-in, has tremendous innovation built in, given the open source model…and has all of the functionality, reliability and support that they require,” said Levy.
Toronto-based Bridgepoint Health has been a Novell NetWare shop for over five years, and the healthcare centre is currently building a migration plan towards Linux through Novell’s Open Enterprise Server (OES) offering, according to Marc Lamoureux, director of information services at Bridgepoint.
Judging from a positive experience with NetWare, Lamoureux felt confident that Linux will provide his organization the same “scalability and reliability” enabled by NetWare.
“I don’t think we’ll have a problem deploying Linux; we’ll put it in, we’ll test it on a few servers and make sure it’s performing the way we expect,” said Lamoureux, adding that he expects the migration to happen within the year.
For traditional NetWare customers, Novell’s SUSE Linux Enterprise 10 announcement is a “very good direction”, according to Warren Shiau, senior associate at Toronto-based market research firm The Strategic Counsel. While SUSE Linux can also appeal to non-Novell shops, the market is not seeing any “big migration” trend in favour of open source technologies, he said.
For Linux to gain traction among the enterprise, Novell needs to maximize the potential of channel partners to bring in business, said Shiau.
“[Novell] would have to do something like Microsoft did for NT — make [Linux] a better selling proposition for the channel or at least an equivalent selling proposition for the channel,” explained Shiau.
But any dramatic shift in the market, particularly around the potential of the Linux desktop to displace Microsoft, is not expected to happen over a short period of time, he said.
Innovation is another key differentiator between Windows and the open source Linux, according to Levy. “The open source model continues to prove over and over again — whether it’s in Linux or other open source environments — that innovation is much faster by having an open community than by having your innovation dominated by a single company.”
Reacting to Novell’s comments, Microsoft Canada claimed its business model is “based on an open platform and partners.”
“We have invested in resources to engineer products that are comprehensive, easy-to-use and deliver the value out of the box,” said Elliot Katz, product manager for Windows Client at Microsoft Canada in Mississauga, Ont.
Katz added, “There are hundreds of different Windows-based PCs — from desktops and laptops, including media centre PCs and tablet PCs — at a wide range of price points and thousands of different compatible software applications for Windows.”
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