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Re: [News] Novell Shrinks Significantly After Microsoft Deal

7 <website_has_email@xxxxxxxxxxxxxxxxxxxx> espoused:
> Roy Schestowitz wrote:
> 
>> More Novell layoffs in '08
>> 
>> ,----[ Quote ]
>> | More layoffs are expected next year at Novell Inc. after the Waltham,
>> | Mass. software maker disclosed in a federal filing Thursday plans to
>> | extend a restructuring effort in a two-year strategy to shore up
>> | profitability.
>> `----
>> 
>> http://www.heraldextra.com/content/view/247987/
>> 
>> Just like Linspire. Other companies should watch and learn what Microsoft
>> does and what those stupid deals mean.
> 
> 
> All those open source companies that do deals with micoshaft
> are living on borrowed good will of the open source developer
> community. The leaders of such projects tend to spliff a lot
> and think they can do what they like, but as soon as they
> do it and sell open open sourced software down the river,
> they have lost all of the good will backing them. The open
> source developers take their ideas and good will elsewhere
> where they can find more freedom and fewer spliffing assholes to work with.
> 
> All those doing deals with micoshaft not only damage
> their own products but their own futures as well.
> Look at companies that have gone to the brink like
> Mandriva that came back with the good will of the
> developer community. Now look at all those
> doing deals with micoshaft with few chances of making a
> come back.
> 

I fully agree with you, and would take that a little further.  Those
open-source companies whose heritage was open-source are those who have
avoided accepting support from Microsoft.  If we consider those which
have not, SCO was originally bought by the Caldera OpenLinux group,
although there appeared to be some kind of internal management coup
during the takeover which left the SCO people in charge of the new,
larger, group.  This meant that those in charge were those who
understood proprietary software models rather than open-source ones.  

Novell is a similar case, where the faltering but popular SuSE
distribution was bought by a declining proprietary software house, in the
hopes of propping up their declining proprietary business with the
proceeds of a growing open-source business. 

Unfortunately, for this strategy to work, the sensitivities are very
tight, the new business has to grow at >= to the rate of decline of the
proprietary business, worse, the new business itself will directly
damage the old one, thus increasing the rate at which the new
cannibalises the old.

Since the revenues of the old are very likely to be higher than that of
the new, if declining, typical business short-term planning will favour
the limiting of the new and a "walk back slowly" approach on the old.
This makes it very unlikely that the new business environment will ever
meet the >= rate of decline in its own growth.

The result?  The board will panic, and look for other options.  Should
Microsoft turn up at exactly the right time, a deal might look extremely
attractive as a means of reducing the risk of the new not balancing the
old, but providing a cash-injection for the interminimum period.

Unfortunately, that strategy also has a gaping chasm in it, which is
that the free software world is more than a little wary of the goals of
Microsoft, and might well reduce its support for the new business, as
well as for the old.

Of course, if the board then chooses to sue IBM, then all goodwill will
surely evaporate...

-- 
| Mark Kent   --   mark at ellandroad dot demon dot co dot uk          |
| Cola faq:  http://www.faqs.org/faqs/linux/advocacy/faq-and-primer/   |
| Cola trolls:  http://colatrolls.blogspot.com/                        |
| My (new) blog:  http://www.thereisnomagic.org                        |

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