Enterprise Linux Log

Mar 3 2010   7:13PM GMT

What does Novell buyout offer mean for open source?

Leah Rosin Leah Rosin Profile: Leah Rosin

Hedge Fund Elliott Associates LP, which holds an 8.5% stake in Novell, offered to buy the rest of the company for about $1.8 billion on Tuesday, March 2, 2010. This follows the Q1 financial report that showed year-over-year revenues were down. However, the company’s Linux business broke even for the first time in seven years.

According to the Wall Street Journal, the share price of Novell surged on Wednesday, to $5.97, beating out the offer price from Elliott by $0.22/share.

Novell just celebrated the third anniversary of its controversial deal with Microsoft, and we noted that while the deal helped interoperability, it didn’t gain Novell many fans in the open source community.

So what does the struggle of Novell mean to the larger open source community? Does it represent a problem with the open source business model, or a failed attempt to prop up a company using a Linux business acquisition?

One self-described “ambassador sysadmin,” Andy, said on Twitter: “SUSE Linux to get bought by disinterested party for the second time? (First was Novell). It’s Red Hat’s stock that should be going up.”

Canonical COO, Matt Asay, blogged that this move provides a good opportunity for a company like Oracle to get their hands on a bigger Linux portfolio.

To me, it doesn’t seem as if the potential consumption of Novell means anything more than what the open source community has been saying for a while: Novell didn’t understand Linux, and the SUSE acquisition didn’t help the company, and the company didn’t really help SUSE.

What do you think?

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