Novell chief: 'Our Linux performance did not meet our expectations'
Summary: Novell's fiscal first quarter results were a mixed bag and Linux invoices fell sharply as the company failed to sign big deals.For the first quarter ending Jan.
Novell's fiscal first quarter results were a mixed bag and Linux invoices fell sharply as the company failed to sign big deals.
For the first quarter ending Jan. 31, Novell reported non-GAAP earnings of $24 million, or 7 cents a share, on revenue of $215 million. Those results were a penny better than Wall Street estimates. Net income for the first quarter was $11 million, or 3 cents a share.
On the surface, Novell's quarter told a familiar tale. Open platform sales, which are dominated by Linux offerings, were $35 million, up 24 percent from a year ago. Other units had a mixed performance. Novell CEO Ron Hovsepian said that "invoicing was below our expectations in this weak economy."
Hovsepian elaborated on Novell's earnings conference call. Linux, viewed as Novell's growth engine, sputtered in the quarter. Hovsepian said:
Our Q1 Linux performance did not meet our expectations as our pipeline coverage and conversion was overly reliant on direct sales and sales cycles lengthened. Going forward, we are focused on building our pipeline with and through partners and we will be aggressive on pricing to gain market share.
Matt Asay put it best: Novell will be putting its Linux on sale.
Novell CFO Dana Russell noted:
Linux invoicing was $23 million, down 42%. As we have stated before, 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. Today we have invoiced $199 million or 83% of our original $240 million agreement.
Add it up and it appears that the Microsoft reselling agreement that put Novell's Linux business on the map has played itself out. Meanwhile, an aggressive pricing strategy--for services attached to free software--can't be good for profit margins going forward.
On the bright side, Novell said it is rolling out SUSE Linux Enterprise 11 later in the quarter. That rollout may improve Novell's Linux invoicing fortunes.
Needless to say the Microsoft agreement gravy train was the big topic among analysts covering Novell. A few nuggets gleaned from Novell executives:
- Russell said that "customers certainly are price sensitive" and Novell expects that the prices for Microsoft-Novell Linux certificates are not going to hold.
- Demand generation for Novell's Linux business is the company's responsibility--not Microsoft's. The big problem was that Novell was relying on big deals that failed to materialize.
- Invoicing for Novell's Linux certificates appear to be moving back to historical norms, said Russell. If that's the case then the first quarter hiccup will be an aberration.
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Talkback
The Price
With the recent Red Hat/MS agreement (which doesn't compromise the community) Novell has lost their "interop" advantage.
Red Hat didn't sell their soul to Redmond and they are doing just fine. Solid business model.
Umm, maybe
Novell's best advantage is offering an alternative to dealing with the DeadRat salesdroids. I remember when DeadRat demanded that Ford audit their systems and pay for licenses - during a prove-out period. Needless to say, Ford went with SuSE and DeadRat lost a chance at a couple thousand recurring annual licenses. That must have hurt . . .
RE: Umm, maybe so
"The beginning of wisdom is to call things by their right names."
^o^
<br>
???
But I AM! :)
....
Novell Inc. (NOVL) 10:09am ET: <strong>3.31</strong> Up 0.01 (0.27%)
Red Hat Inc. (RHT) 10:08am ET: <strong>13.94</strong> Down 0.01 (0.07%)
^o^
<br>
RED rat?
Personally I was just flabbergasted when DeadRat made demands and threats to Ford - while we were in an RFQ prove out. Totally unnecessary and very stupid. This is how I remember DeadRat - although it probably was just a really bad salesdroid. I can't fathom why any company would do something like that.
....
PS. Pls. don't patent it. I don't want you to sue me. :(
^o^
<br>
Due to "enterprisation" of the product.
"Enterprisation" killed the consumer version.
By contrast, the latest Ubuntu 8.04 and 8.10 work flawlessly, allow media playback and are FAST. No issues, it just works. I was expecting many usability improvements from Novell following their agreement with Microsoft, including media codecs and help with SAMBA. Instead, Ubuntu has a better SAMBA implementation, no media playback issues and didn't need a Microsoft agreement to get there. I also haven't paid for Ubunut (YET, however i will start now).
While I'm currently still using SLED10.1 on my laptop, I'll be moving to Ubuntu before the end of next month. I'm tired of thinking of my 1.83Ghz Core Duo laptop with 2GB ram as a slow machine. Firefox should pop up, VMWare workstation should pop up. GEdit, Thunderbird, Banshee, FSpot and K3B should all pop up. Instead they take 7-25 seconds to load. C'mon!!!
Honestly, I can't tell you HOW the Novell-Microsoft agreement helped ME. I really can't. And that's a problem for Novell.
I'm running EEEBuntu on my Asus netbook and if Ubuntu on my laptop runs anywhere near as well, I'll be a lifelong user.
Goodbye Novell. Suse was nice but just not enough and I'm tired of waiting and paying while I'm waiting.
to be honest
I have been with Ubuntu since their first LTS release, now I'm sticking with it and won't upgrade until their next LTS release, April 2011
RE: Novell chief: 'Our Linux performance did not meet our expectations'
I can go to my local Barnes and Noble and pick up a Fedora, Suse or Ubuntu disk right now. If I pay attenion I can get Mint, PC/OS, Mandriva, etc... They are in the various Linux magazines on the shelf. The magazines are cheaper than a box copy. $15.00US for a UK magazine (most of the Linux magazine are from there) versus $50.00US or more for a box copy. So bandwidth is not a stopping block.
Randy
Reverse Midas Touch
I will say that I run SuSE 9.3 Professional on one box (hardware appears too old to upgrade) and OpenSuSE 11.0 on two other boxes. Two of these are older dual Athlon CPUs, and one is an AMD quad core Phenom. I'm having no apparent performance or stability issues with them. I like the distros, KDE, and I like the SuSE online update facility.
That said, Novell seems to be faltering with Linux. The early signs: departing original SuSE engineers, were not encouraging. Can Novell make money at anything?
Novell is M$'s lapdog
That tells it all!
M$ kept Novell on life support just to spread OSS FUD.
With M$ bankrupt, Novell won't last a single week without allowance money.
The real Linux made by Red Hat is what we need.
RE: Novell chief: 'Our Linux performance did not meet our expectations'
did you miss a shock treatment?
[i]Novell was supposed to be the saviour of linux...[/i] Saviour of Linux from what??
[i]If Novell can't do it then nobody can. This is the destiny of linux, doomed for failure.[/i] mmmm RedHat is doing fine, check their stock... Fact is, Linux is growing and growing...and growing, but you can keep repeating "doomed for failure" until you feel better.
No did you?
Its not, you just think it is. Trust me, there are better operating systems out there than what linux has to offer.
[i]Saviour of Linux from what??[/i]
From failure! Novell was supposed to be the company that would bring linux to the masses and make this the year of the desktop. They failed.
[i]mmmm RedHat is doing fine, check their stock... Fact is, Linux is growing and growing...and growing, but you can keep repeating "doomed for failure" until you feel better.[/i]
Red Hat's financial status hasn't looked good since the company started. Linux is not growing, recent reports say its declining. And with a 4x higher return rate of that than its competitors proves my point.
Have you ever posted anything of interest or value? (nt)
Yes, see my previous post. Have you? (NT)
Ah, I see. Your reality field is badly distorted.
Ive found the same thing
So i dont use it anymore.
I thought after 17 years and the vast number of coders writing for linux it would be slick slick slick.
But I constantly find it lacking in innovation, and knowing that it is based on and very similar to the very old UNIX OS and not something new and containing its own innovation and design..
Mabey if Linux was not more interested in a ideology and was a little more interested in quality and functionality AND originality then it would meet more peoples expectations.
Try listening to the people for a change, and provide what the market asks for and desired.
Sure MS is not perfect, but Linux is REALLY not perfect, FOSS/Linux does not care about the user experience.
And one day they might work out that next to NO ONE cares if they can see the source code and after all thts the only real freedom you are hawking.
17 years and 0.85% market share, and once you get bigger or able to make some money the people who own the patents you stole to do it will come calling.
(when its worth it, ie when you finally get some money if you do).
0.83% market share is VERY THIN ice !!!