Rumors have been circulating for quite some time, so it seems safe to say that Novell is for sale. What's interesting is that VMware could be one of the bidders.
Novell has pretty much been for sale the past six months or so. The New York Post first reported that a "strategic buyer" was going to acquire the Suse Linux portion of Novell's business, but no buyer was named at the time. Later a Wall Street Journal article came out naming VMware as that strategic buyer. And while the claims about a VMware purchase remain unconfirmed, many folks in the industry are jumping on the news.
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According to the WSJ article, Novell plans to sell itself off in pieces. VMware is said to be pursuing the Novell Suse Linux operating system part of the business, while Attachmate, a private-equity-backed software company, could end up buying some or all of the remaining assets, including the old NetWare network operating system.
The WSJ's sources say the three companies are still discussing how to divide the sales force, as well as how to handle Novell's patent portfolio and other intellectual properties. These complications are not only slowing down an official announcement, which reportedly could still be weeks away, but it could also cause the deal to ultimately break down.
VMware's pursuit of Novell's Suse Linux business should be considered a solid strategic play for the virtualization market leader. As the company continues to try and transition itself from a virtualization company to that of a cloud company, the acquisition should offer VMware a more complete cloud stack to answer its critics.
VMware has already expanded its software stack beyond that of the hypervisor. With acquisitions of SpringSource (a popular open source development framework) and Zimbra (a collaboration and email platform), as well as a key partnership with Salesforce.com under its belt, adding the Novell Suse operating system would go a long way to completing its software stack for running cloud services. The Novell Suse addition would also help VMware better compete against the growing challenges from Microsoft, Oracle, and Red Hat, all of which boast a deeper integration between the hypervisor itself and the OS. These competitors are pushing their own cloud computing strategies by laying claim to a complete vertical stack that also includes their own supported operating system -- an area in cloud computing that VMware lacks.