| Novell to buy XenSource? Altiris? |
Jan. 04, 2007
Matt Asay, formerly the man in charge of Novell's Linux and open-source strategy, thinks that Novell may be getting ready to buy up Altiris or XenSource sometime soon.
In his blog, AC/OS, Asay wrote on Jan. 3 that "Word on the street is that the company has $200M or so burning a hole in its pocket, with Altiris and XenSource as potential acquisition candidates."
"Both deals could make sense, albeit for very different reasons" to Asay. "Altiris had a small profit in 2005, and will improve on that in 2006. It's pricier ($750M market cap), but is local to Novell's Utah office (makes geographic sense) but has nice overlap with Novell's ZENworks product line."
What might really make Altiris Inc. interesting to Novell probably wouldn't be its server and service management programs, but its virtualization solution: Altiris Software Virtualization Solution. This is a well-regarded virtualization manager that does an excellent job of managing multiple virtual applications.
Altiris also has a close partnership with VMware Inc., perhaps the leading virtualization company today. The Salt Lake City, Utah-based company recently released improvements to its virtual server deployment capability for VMware ESX. Altiris is also a member of the VMware-led Virtual Desktop Infrastructure Alliance. This group, with its focus on virtual desktops, could help Novell with thin-client desktop customers.
So to Asay, "Novell could get a profitable company and roll up more of the systems management market with a nice virtualization bonus. That deal makes sense, though it's pricey."
XenSource Inc., the commercial entity behind the open-source Xen virtualization program, is attractive for other reasons. "XenSource makes sense from a different perspective," continues Assay. "If Novell were looking for a good way to dump a barrel full of flies into Red Hat's ointment (which has made virtualization a pillar of its strategy), snapping up XenSource might well be it. XenSource wouldn't be cheap -- as Dave [Rosenberg] reported, XenSource recently raised money at a $100M+ pre-money valuation. Not bad for a company with piddling revenues."
Both Novell and Red Hat Inc. have invested a lot in including Xen in their Linux distributions. While there are other open-source virtualization programs, such as OpenVZ, Xen is unquestionably the most popular virtualization program for Linux.
While other Linux distributors could, of course, continue to use Xen, Asay thinks that Novell being in charge of the open-source project could greatly benefit the company, because the "'source of code' matters as much or more as 'source code' in open source." Thus, "XenSource could be a huge differentiator for Novell in the Linux space."
"So, will Novell buy one or both or neither? Not both, but I'm guessing Ron [Hovsepian, Novell's CEO] wants to get one. In terms of the biggest risk and potentially biggest reward, XenSource would be it," concluded Asay.
When asked about these possible purchases, Novell's senior manager of public relations, Kevan Barney, told Linux-Watch that "Novell does not comment on rumors about possible acquisitions."
-- Steven J. Vaughan-Nichols
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