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Sun's Possible Acquisition of Novell

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Sun's Possible Acquisition of Novell

Although Sun only recently had its first growth quarter since 2001, including a US$350 settlement from Microsoft in litigation surrounding Microsoft's use of Java, Novell is generally perceived as financially strong at the moment, and would probably command a high price if it were bought soon.


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Industry observers have taken positions on rumors that Sun Microsystems (Nasdaq: JAVA) might buy Novell. "I don't find the speculation credible," analyst Dan Kusnetzky, vice president of operating systems at International Data Corporation, said. Kusnetzky said such a merger would face problems from potential regulatory issues, possible corporate culture clash and a lack of synergy between the two product lines.

"There are obvious potential regulatory hurdles regarding their product lines, and beyond that, there would be serious corporate culture issues," he told LinuxInsider.

"For one thing, with Sun, all things seem to lead to Solaris and Sun, even when they participate in group initiatives. And I get the impression that views that dissent from Scott McNealy's views get weeded out," Kusnetzky explained.

"Novell, on the other hand, likes to be the glue that holds things together, and they seem to focus on taking a bland, quiet, technologically superior solution and marketing it to technical people," rather than having stronger, more vocal leadership touting its products, as Sun does, Kusnetzky said.

"I think they might have a hard time melding the two cultures," the analyst said. "Sun might end up in a position similar to IBM's (NYSE: IBM) when it acquired Rolm many years ago. Soon after, the most talented researchers and executives left, leaving IBM with a husk of a company," he commented.

Still, some observers familiar with Santa Clara, California-based company's corporate culture say that the two might share some common history and values.

"Both of them have a history that includes Unix and Unix-like systems, and they're both technology-oriented," former Sun consultant Loren Hart, now head of software development at San Jose-based Data Ace, said.


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