Novell: Old cash cow ain't what she used to be

Novell: Old cash cow ain't what she used to be

Novell's recent quarterly financial announcements brought a good news-bad news mix for NetWare that's almost becoming the permanent snapshot for the company. Once again, for what seems like the 100th quarter in a row, NetWare was Novell's top-selling product. And once again, for what seems like at least the 20th quarter in a row, NetWare sales were down year over year.

NetWare continues to be the cash cow for the network pioneer, but that cow's getting old and the milk is drying up.

SuSE Linux is supposed to be the young calf that will take NetWare's place, but you can't get as much return for the Linux - there are too many groups willing to give it away.

Novell's plan is to foster both open source and closed source software as a "mixed source" solution that provides better tools than either "pure" open source or "pure" proprietary operations. License fees from the closed source, maintenance and support fees from the open source and training services for both are the revenue producers in the Novell business plan.

To that end, they sponsor quite a large number of open source projects with both services (Web sites, collaboration services) and human capital - software engineers paid by Novell but spending all their time developing open source applications.

It's hard to tell from the financials released by the company, but it appears that the cost of maintaining the open source movement is certainly costing more than the profits, and possibly costing more than the revenue, from all of the company's Linux connected products.

According to CEO Jack Messman - who worked for the Union Pacific Railroad 25 years ago - "When I was in the railroad business, I used to say, 'You can't get the freight to the location unless you put the tracks down.' We are laying tracks right now in many, many different ways in the company. It's going to start showing up in revenue growth and earnings going forward, or we wouldn't be doing it." That's a worthy sentiment, of course, but at some point you need to look at the tracks and see if anyone is actually moving freight over them. If not, it's time to pull up those tracks and put them to better use elsewhere.

Kearns, a former network administrator, is a freelance writer and consultant in Silicon Valley. He can be reached at

Follow Us

Join the newsletter!


Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Show Comments