"With our balance sheet, we're considering all our options," Sun Chief Operating Officer Jonathan Schwartz said in an interview Sunday in US regarding the possibility of acquiring Novell. "What would owning the operating system on which IBM is dependent be worth? History would suggest we look to Microsoft for comparisons," he said.
IBM famously relied on Microsoft for an operating system for its personal computers. Schwartz said in a Sunday blog posting that IBM relies on Novell's SuSE Linux as a competition to keep No. 1 Linux seller Red Hat from growing too strong.
But several factors could reduce the likelihood of such an acquisition. First, though Sun has cash and marketable securities of US$7.61 billion, Novell isn't cheap, with a market capitalisation of US$2.64 billion as of July 30.
And the Santa Clara, California-based company had an opportunity to buy SuSE Linux for much less in 2003--indeed, it made an offer that Schwartz said forced Novell to increase its US$130 million bid. Novell ultimately paid US$210 million, receiving a US$50 million investment from IBM as part of the deal.
In addition, Sun's Java Enterprise System servers software heavily overlaps Novell's software line. Schwartz said Novell's non-SuSE products are "far less interesting."
Novell and IBM couldn't immediately be reached for comment Sunday night.
The possible acquisition was first reported by the Wall Street Journal.
Since taking over as Sun's No. 2 executive, Schwartz has worked on several radical changes at Sun, for example, bringing its server software to rival operating systems and bringing its Solaris version of Unix to Intel's Itanium and IBM's Power processors.
Acquiring SuSE Linux, which runs on IBM's Power servers and mainframes, could speed Sun's effort to spread Solaris to other servers, Schwartz said.
Eventually, Sun plans to make Solaris open-source software.
Why on earth by Novell?
Sun are being clueless, thrashing wildly, in panic.
Sheesh. Didn't they learn their lesson when the blew $2 billion on Cobalt, buying a Linux product which they did nothing with, and which didn't help them sell more Sun kit?
Are they insane to think that that will give them ownership of the Linux platform which is so important to IBM? Don't they know that the whole codebase is GPL, thus equally owned by IBM as by Novell?