Novell's OpenSuSE commitment is tested
What now after Microsoft?
More than ever, these are testing times for Novell's Linux culture, and its relations with the community.
The recession hit sales of Novell's SuSE Linux during its first quarter, according to chief executive Ron Hovsepian. Novell's CEO blamed over reliance on direct sales.
As some have written, the benefits of the 2006 Microsoft reseller agreement that cost Novell so much good will in the community have clearly played out.
Sources close to Novell have told us those sales went well, and coupons were redeemed - Microsoft agreed in 2006 to distribute 70,000 SuSE Linux certificates. The problem, as we saw at the time, was really big customer deals failed to drop and Novell overly relied on Microsoft rather than using the breathing space it secured in the deal to stand on its own two legs.
That was relatively understandable, given Microsoft is far larger than Novell and has a broader sales operation.
So to what does Novell turn now? According to Hovesepian, focus on partners and being "aggressive" on pricing.
Translated that means Novell's going to work on more bundles and cut prices. Neither will help Novell's profits in the short term, although - if successful - they could help market share growth.
If that is the case, then hopefully - for Novell's sake - it could be in a position to make money from the increased market share once the economy recovers.
Additionally, Novell's got SuSE Linux Enterprise 11 to look forward to later this year, which should help boost the business through a round of upgrades, recession or no recession.
That SuSE Linux engine, though, is going through a testing time.
It's emerged that paid Novell employees who were involved in the OpenSuSE community are among those that are getting laid off by the company. These layoffs were part of the original round of layoffs, a Novell spokesman told The Reg.
It's not clear who exactly has gone - Novell won't identify specific employees of groups. It could be anybody from engineers and experts to the kinds of marketing and community liaison types that Sun Microsystems let go from its Open Solaris organization as part of its own massive layoffs.
If Novell is genuine in its Linux ambitions, it will have cut the marketing and liaison types first. This would make sense, given there was a flowering of such roles at a range of tech companies looking for love through engagement in the open-source community during the bubble years. We've seen this at Microsoft, IBM, and CA in addition to Sun - to name just a handful.
The worry would be if Novell has begun letting the experts and engineers go, as these are the people who build and test code, absorb technical feedback from the community on OpenSuSE and - ultimately - SuSE Linux and whose existence really gives a company status in the open-source community. It's these types of people that give the community the impression the company wants their feedback and is interested in working with them.
When word of the OpenSuSE cuts leaked, community members were already reacting negatively, saying you could see where Novell's priorities lay.
Novell is a company with 4,000 employees and the cuts it's made sound like a fraction of that head count, especially in the OpenSuSE organization.
If this is the start of a trend, then - based on those early reactions - Novell needs to be careful it doesn't sever the kinds of technical ties and back channels that have helped build SuSE Linux - the Linux disro Hovesepian is now counting on to sell at a discount. ®
"You may be thinking of user licences. "
"You may be thinking of user licences. We don't tend to have those in the Linux world."
What's a SLE Desktop licence then? At Euro47 per year, it sounds entirely reasonable compared with a classic corporate Windows desktop setup.
If I read it right, SLE Server licences vary from Euro300 per year to Euro1200 per year with a typical option being Euro600ish, depending on level of support. An organisation wanting 50 would likely want a lot more at 300 or 600 than at 1200. A reasonable quantity but hardly worth making a huge fuss about for anyone, especially if the bod on the end of the phone is making a ***t of himself asking for a discount beyond that already available through standard volume discounts
Shame Barack and El Gordo largely only see fit to spend billions of taxpayers money when it's wasted on failed bancasinos, and everyone else who needs a few quids worth of strategic investment (you, me, Bill's antivirus campaign, Novell, whoever) gets to starve.
Yes 50 licences is a lot, if they are all SLES10. You may be thinking of user licences. We don't tend to have those in the Linux world.
So starts the spin cycle of doom..
Any moron can say 'lets cut the price' so we can capture more market share. Its an old addiction that can kill a business. You continue to slash employees as you cheapen the product. As the author points out, you have thinner margins, less money to spend on necessary R&D.
It comes as no surprise or shock that companies have been funding OpenSource initiatives and that when the contributors no longer have a meal ticket, they will focus less on the Open Source community, but rather on their day job and putting food on the table.
Yes there will still be Open Source projects, but on a smaller scale, and those projects that allow for a smaller commitment from individual contributors will flourish. An example would be Dojo where one can add to the community one widget at a time.
Sun and Novell were right in cutting their Open Source staff contributors first. After all, corporations are supposed to be profit making beasts. So in lean times, you trim the fat and unfortunately, you also burn off some muscle. ;-)