Gus Robertson told ZDNet Australia Novell's decision to pay US$210 million to acquire SuSE Linux -- with Big Blue also due to pump US$50 million into the supplier for a 2 percent stake -- vindicated Red Hat's performance in building the open source market.
Red Hat is presently the leading Linux vendor worldwide, with SuSE the second-largest, specialising in the sale of server-based Linux software.
The acquisition is Novell's second key purchase in the Linux space following its acquisition of Ximian -- a desktop Linux supplier -- in August this year.
Robertson's comments came as Novell's Australian and New Zealand general manager David Lenz, touted the benefits of the acquisition in building the Linux presence in the government sector here.
Lenz also told ZDNet Australia Novell planned to make its full Linux product suite available to federal, state and local government agencies via its GITC (Commonwealth government licencing program) within the next few months.
He emphasised that the move reinforced Novell's plan to "move forward aggressively and ... continue to do so" in the Linux space despite a campaign by SCO to tackle both suppliers and commercial users of Linux over alleged intellectual property breaches.
Red Hat's Robertson, however, sought to distinguish his company from Novell, saying users would have to decide for themselves whether they would be comfortable with a company which offered both proprietary and open source solutions side-by-side. Novell has in recent times insisted that it plans to maintain support for its ailing Netware product line, with Linux an addition to its portfolio.
Robertson said Red Hat has "been in the industry for 10 years, [providing] product, support, consultancy and training in open source".
On whether Novell had spoken to Red Hat about an acquisition or an investment, Robertson said no such talks had happened "to my knowledge".
He downplayed the impact of the acquisition in competitive terms, pointing out that Red Hat had 82 percent market share of Linux in the U.S. and more than 50 percent share worldwide.
Robertson added that the company had a very significant presence in Australia, with local offices including engineering, support, sales and training staff, "while our competitors don't". The company aims to grow its revenues in the South Asia Pacific by 100 percent from 2002/03 to 2003/04.
Tumult for users
The acquisition comes at a sensitive period for Red Hat, which has shifted its original Red Hat Linux product -- distributed for free, with charging only levied for optional technical support -- into a separate project group known as Fedora and is focusing its energies on its Enterprise Linux product.
The company recently released Red Hat Enterprise Linux 3.0, specifically designed for enterprise users who require stability as a key feature. Red Hat sells RHEL as an annual subscription that includes the software, support and bug fixes, generating a business-sustainable revenue stream.
While the release of RHEL 3.0 has confirmed the growing corporate maturity and profile of Linux, many users are concerned that the Fedora/RHEL divide has frozen out those requiring a degree of stability but also low-cost access to Linux. Fedora is being made available for "bleeding edge" development, heightening its potential but prospectively lowering its stability to levels below that required for business use.
However, at least two Australian enterprise users have contacted ZDNet Australia to register their complaints about the process by which Red Hat is trying to migrate corporate users over to RHEL.
One user complained that the move compromised his just-completed move to get management to agree to go down the Linux path.
The company recently confirmed it would discontinue maintenance and errata support for RHL 7.1, 7.2, 7.3 and 8.0 as of 31 December, with support for RHL 9 extending only until the end of April 2004. However, in an e-mail to customers -- which makes no mention of Fedora -- Red Hat said: "With the recent announcement of Red Hat Enterprise Linux [3.0], you'll find migrating to Enterprise Linux appealing.
In an attempt to secure the business, Red Hat is offering a two-year for one-year deal on RHEL WS or Basic if the purchase is completed before 28 February 2004. Robertson declined to comment on the issue, citing the confidentiality involved in offers to individual customers.
The company has also created a Migration Resource Centre to help companies plan their transition.
Stephen Shankland contributed to this report
