Novell's CEO Says He's Looking At Acquisitions

by Sam Dean - Feb. 02, 2009Comments (3)

At the end of last year, I made the prediction that we'll see substantially more mergers and acquisitions on the open source front this year. Researchers at the 451 Group have also made that prediction, and provided some good data to back it up. When I wrote about the topic, I concentrated mainly on the low market capitalizations for public open source companies and how the valuations make them acquisition targets. Now, there are signs appearing that at least one of the big, public open source companies may in fact go on the acquisition hunt itself. As PCWorld reports, Novell's president and CEO Ron Hovsepian confirmed in India today that Novell is looking for acquisitions to fill out its product line.

Speaking in Bangalore (where Novell has a development center), Hovsepian told reporters that Novell is looking to acquire open source software as well as software for data centers and identity management. The news comes on the heels of Novell's move to lay off a few of its employees (fewer than 100, out of 4,100 employees).

Novell has about $1.1 billion in cash, and Red Hat and Sun--the other two large, public open source companies also have cash in excess of $1 billion each. It's a good time to be a buyer for companies that can afford it, and Novell is coming off a couple of sensible acquisitions. In October it signed an agreement to acquire Managed Objects, which makes data center technologies. Given Hovsepian's comments today, data centers are clearly a point of focus at Novell.

Novell isn't the only public open source company looking at acquisitions. In January, Sun Microsystems announced that it acquired Q-Layer, a cloud computing company. Look for more strategic moves from these companies throughout this year, in spite of what the naysayers are circulating. These companies' share prices may be in the basement, but they still have substantial cash reserves during an economic downturn that favors open source adoption.

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by an anonymous user on Feb. 02, 2009

Shouldn't they spend the money on keeping people employed and contributing positively to the company? If they have $1B in cash in the bank, are they adding to it or burning through it?

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by Randy Clark on Feb. 02, 2009

I say they make a 'cloud' based service. Rumor has it Sun is working on their cloud. VMware is going to start looking in to the same. Microsoft has a cloud. Amazon has a cloud. Salesforce has a cloud. Facebook has a cloud. Apple has not yet opened up their own. If they want to stay relevant, they have to begin to offer some cloud offerings, or at least promote it, even if it is for people using OpenSUSE to build and manage their own clouds.

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