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Sad end for Novell: Sold to Attachmate

Surprise buyer doesn't look good for Novell or open source

By Joe Brockmeier on Mon, 11/22/10 - 10:43am.

The waiting is over, and the winning suitor has finally been revealed: Novell is being sold to Attachmate for about $2.2 billion with other bits being sold to CPTN Holdings for $450 million. It's a sad end for a once-great company, and could have some unpleasant side-effects for other open source companies and communities.

Disclaimer: I was employed by Novell from February 2008 through January 2010 as community manager for openSUSE.

Though many (myself included) had Novell pegged for sale to VMware, the company is being sold mostly to Attachmate with "certain intellectual property assets" being sold to a consortium backed by Microsoft. It's unclear what those assets are, but Novell holds more than 460 patents (according to a quick skim of the USPTO patent database online) and the copyrights to early UNIX, among other IP.

Attachmate plans to run Novell as two business units: SUSE and the rest. This comes as no surprise as SUSE is the only part of Novell that has been seen as a growing business. The rest of the company is based on legacy products that haven't gotten much traction in the market.

If you're not familiar with Attachmate, there's a good reason: The company doesn't have a very high profile. It's a private company owned by several investment groups, Francisco Partners, Golden Gate Capital and Thoma Bravo.

Apparently the onslaught of attention brought on by the news of the Novell sale was enough to take down Attachmate's Web site — which gives you an idea just how much attention the company usually gets on a regular basis. The company's product line at the moment consists of terminal emulators, systems monitoring, an SSH client for Windows and UNIX, and a PC X server. Nothing particularly exciting, some bread and butter utilities that enterprise customers will pay for.

What the company is decidedly not known for is innovation of any kind. It looks like it's picked everything up via acquisition or mergers. This doesn't bode well for product development or a continuation of investment in any sort in the openSUSE community. Novell has already scaled back from its heyday when it had recently acquired SUSE and Ximian and was keeping a lot of FOSS developers on its payroll. These days the company is tightly focused mostly on the areas where it needs to make SUSE succeed in the enterprise and integrating work being done in the larger FOSS community. Note how much Novell has slipped in kernel contributions in the "Who wrote Linux?" reports, for example. At the risk of sounding pessimistic, I don't see much investment in openSUSE going forward or anything but minimal investment in open source innovation from Attachmate. (Please, feel free to prove me wrong!)

The IP assets being sold to the CPTN Holdings are even more ominous. You don't pay $450 million for something you don't plan to use, typically. As far as I can tell, CPTN isn't producing anything — which means that "use" may be in the form of patent licensing shakedowns. The Microsoft/Novell deal is set to expire in the next year, so this may be Microsoft ensuring that Novell's patents don't wind up in someone else's hands — but hoping for a purely defensive stance is probably overly optimistic.

If there's any silver lining, it may only be that Novell wasn't sold to Oracle. And I'm not entirely sure that would have been worse.

The news is still very fresh, and I'm trying to get comment from Novell about what the IP assets consist of. Look for more on this as it develops. In the meantime, what do you think Attachmate means for Novell? Let me know in the comments.

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