Private Equity Firm bids for Novell

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Novell has announced that it is considering a bid by Private Equity Firm Elliot Associates to acquire it. At a price of $5.75 /share it will be an acquisition worth $1.8 billion. The price is almost 21.1% premium of what Novell’s share was selling earlier. The news has sent Novell’s share sky high in latest trading.
If this deal goes through Novell will become a private company.
Novell has been struggling to prop its legacy Netware based business with Suse Linux portfolio. Though it has not been completely successful in doing so, as evident from its falling sales quarter-on-quarter, the Linux division has shown some impressive growth. It has break even in the last quarter. But still Novell ranks a distant second in the Enterprise Linux market behind Redhat which sure is leader in that area.
Though the overall revenue of Novell might not be attractive, it still has a cash flow of around $981 million in its hands which might have attracted Elliot Associates. Can the equity firm turnaround the struggling company after takeover without burning the cash? The possibilities look  grim. But if Elliot is able to spun off Novell’s struggling divisions out and concentrate on it Suse Linux based offerings then it will still might squeeze out profits from Novell.
Elliot might not be alone in its bid soon. Most analysts expect Dell or Cisco or VMWare or even Microsoft (though highly unlikely) to offer competing bid to takeover Novell soon. That might make sense for those companies as they have enough cash and a Enterprise Linux product in their offering will sure add up to their top line.
For me the only concern is the takeover might have significant impact on the community based development of Suse Linux. If Novell is to go down, that will make Redhat a monopoly in Enterprise Linux arena which is not good for innovation. Also the efforts for interoperability between Windows and Linux done by Microsoft and Novell might also be jeopardy. That might affect the customers as well.

Oracle hints on Sun SParc Assets Part II

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With US DoJ approving Oracle-Sun deal, Oracle is slowly revealing its plans for Sun H/W assets. Here is another teaser/advt that Oracle runs about Suns hardware assets. I have seen this on most prominent web sites. It looks Oracle is willing to keep the Sun’s Hardware business with itself and is ready to invest more on developing the same.
There is another angle to these teasers. The recent decision by EU to investigate possible antitrust issues in the deal has delayed it. It might take till mid January to complete the investigation. Already IBM and HP are grabbsing Sun’s customers utilizing the uncertainity of the deal. The antitrust scrutiny can be dealt by either selling out MySQL or promise future development of MySQL. (I really love the words used by the Eurpean commissioner in his statement “The commission has to examine very carefully the effects on competition in Europe when the world’s leading proprietary database company proposes to take over the world’s leading open source database company“ Oracle wants to thwart customers jumping ships and hence trying to clear the uncertainity by promising that it is still committed with Sun’s Hardware.

Its not me alone but most of the experts still feel that Oracle might sell Sun’s Hardware business to HP. And that makes real sense.

Oracle hints on Suns Sparc Assets

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Here is a teaser that Oracle runs on its site. It might be a hint on what Oracle is planning with Suns Hardware assets.

Lets just wait till Oct 14 on the real intentions of Oracle.

Its time to quit

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This business blog speaks more about Sun than any other company though thats not its intention. Lets put aside the reasons behind that. Sun has posted record loss this quarter. Nobody has any clue that how is Sun going to make any money in the already troubled market. Jonathan with all his love for Open Source havent satisfied the investors who have seen their investments melt like snow in the last few months. Is it time for him to quit…?

Sun says its my SQL

>Suns acquisition of mysql didnt surprise me at all. Given Sun’s recent flirting with Open Source movement this is a logical outcome. But what surprised me is the cost of this acquisition. A staggering 1 billion dollars. Now how could Sun gets the maximum returns out of it..? Sun might want to convert the popular “LAMP” Linux Apache Mysql Php into SAMP Solaris Apache Mysql Php. But how does it going to monetize the effort and resources its going to pump into the further development of this free database software which is not that popular in large entertprises..? Charging for support and hardware does not seem to increase the topline of Sun in the short term as far as I see. Lets wait and watch.