Dana Blankenhorn has been a journalist, writer and part-time futurist for over 30 years.
"...slow growth for vendors who are selling Linux support contracts, like Novell and Red Hat."
Umm... no. Red Hat grows fine. They grow double digits every quarter, if fact, last quarter was 20% growth off revenue and 30% growth of profits.
Novell is declining because they chose to side with Microsoft and pay them royalties for unnamed patents. They even run Microsoft's anti-Linux errands. Spreading .NET across FLOSS world. So it is not strange that nobody wants to buy from them, like nobody wants anything from SCO.
Novell shares jumped 6% this morning as word spread it would sell itself in two pieces, perhaps in a couple of weeks.
A short item in the New York Post says only a “strategic buyer” will buy the Linux part of the business, while a private equity firm will take the rest.
There’s only one problem with this news.
It’s not news.
Way back in March, around the time Elliott Associates wrote the company offering to take it out for $1 billion, Matt Asay (then at CNET) said this was the likely outcome.
Novell’s present price of $5.90/share, by the way, puts it 15 cents per share above the original Elliott bid, which came to $5.75/share.
Anyone looking for what is actually going on should also look at another data point, rumors yesterday that Red Hat is on the block.
What’s happening is based on something Matt (again) reported over a year ago. While Linux is booming, most of its gains are coming from unpaid adoption, not support sales. This means slow growth for vendors who are selling Linux support contracts, like Novell and Red Hat.
In that kind of environment it’s natural that brokers, analysts, and other bottom-feeders would get busy. And there’s nothing easier than calling friends at the Post and telling them something is about to pop.
Whether it does or not, or when it does, the bread here was baked long ago, and is in fact getting quite stale. The success of Linux is not tied to the success of any particular vendor. The success is assured.
There are plenty of patent agreements around so that even an Oracle can’t try to take it back at this point. Linux, whether you see it as free as in beer or free as in liberty, is free. And it’s going to stay that way.
But it’s hard to make money with free. Stock traders don’t make money from free. So they’re going to spread their FUD.
Just don’t you worry about it.
