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Novell revenue up as SUSE investment shows promise

Novell revenue up as SUSE investment shows promise

Networking and Linux vendor Novell reported a profit of US$57.1 million for fiscal 2004, which ended Oct. 31, compared with a loss of $161.9 million in the prior fiscal year.

In an announcement Thursday, the company said it earned net revenue of $300.6 million in its fourth fiscal quarter, compared with $286.7 million in the year-ago quarter. Net revenue for the full fiscal year was $1.16 billion, up from $1.1 billion in the prior year.

Novell's Australian and New Zealand operations had a good fourth quarter, reporting a 6.5 per cent increase in revenue growth on the previous quarter.

The financial uptick comes one year after Novell acquired German Linux vendor SUSE Linux and created an open-source strategy and road map for its longtime NetWare networking applications.

Novell said it brought in revenue of $12 million from its SUSE Linux business in the fourth quarter, including $7 million in subscription revenue from SUSE Linux Enterprise Server. That was a sequential increase of 68 percent from the third quarter, according to the company.

"We are pleased that our revenue and net income remain strong during our ongoing transition to a growth company against the backdrop of a challenging IT market," Jack Messman, chairman and CEO of Novell, said in a statement. "Our key growth initiatives of Linux and identity management continued their strong performance."

One key, Messman said, is that Novell's Linux offerings "are allowing us to reach more and more new customers at a pace not seen at Novell for many years."

Novell Asia Pacific President, Rhonda O'Donnell said Linux was also playing a key role in attracting new customers and opening new markets for Novell within the region. "The highlight of the quarter was the success of our Linux roadshows which were attended by over 3000 customers and partners across the region, highlighting the demand for our SUSE LINUX solutions," O'Donnell said.

While the company sees a bright future for its Linux investments, Messman foresees challenges for Novell. "...Fiscal year 2005 will be another rebuilding year for Novell as we make significant investments in our solutions, systems and people to try to grow our newer businesses in order to counterbalance the continued decline in our NetWare business."


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