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Computer Network Firm Acquires Boston-Based Linux Software Maker

Posted on: Monday, 4 August 2003, 06:00 CDT

Aug. 5--Computer networker Novell Inc. has acquired Boston-based Linux software maker Ximian in the latest move by Novell to establish itself as a major supporter of the freely available operating system that has become a popular alternative to Microsoft Windows.

Neither company would disclose the size of the deal, though Novell said that it paid cash for Ximian and that the purchase will have no material impact on Novell's financial condition.

Novell recently launched an effort to tie its future more closely to Linux. The company, which invented the concept of linking personal computers into networks in the 1980s, dominated the field until Microsoft Corp. began adding networking capability to its Windows operating system. Since then, Novell's market share has steadily declined. Though the company is officially based in Provo, Utah, its top managers work out of offices in Cambridge.

In June Novell said it would begin making its major networking features compatible with Linux as well as with Netware, Novell's network operating system software.

"It gives our customers a choice," said Novell CEO Jack Messman.

"They can now pick the operating system they want."

While Linux has become popular as a server operating system, it still has not been widely adopted for use on individual users' desktop machines. Ximian specializes in the development of software to make Linux more desktop-friendly, such as GNOME, a point-and-click user interface, and Red Carpet, a system-management tool that allows central control of many Linux and Unix desktop machines inside a business.

"It'll allow us to have a presence on the desktop, but also allow us to do a very strong integration between the desktop and the server," said Messman.

Ximian's chief technology officer, Miguel de Icaza, said the acquisition solves a couple of major problems for his firm.

"A lot of times people have no idea how hard it is for a small software company to get its products distributed," de Icaza said.

Access to Novell's established distribution network should fix that, he said, and also ease customer concerns that a small company like Ximian might go out of business and leave them in the lurch. "Having a company the size of Novell definitely helps there," he said.

Mike Silver, a research director at Gartner Inc., said the Ximian acquisition underscores Novell's commitment to Linux, bolstering the company's credibility among Linux users and software developers. But Silver warned that Novell would be making a mistake if it hopes to use Ximian's GNOME desktop software to challenge the dominant position of Microsoft Windows. He noted that Novell's efforts in the early 1990s to compete directly with Microsoft in desktop operating systems and office suites were unsuccessful.

"We don't believe Novell wants to go head to head with Microsoft on the desktop again," Silver said.

De Icaza downplayed the prospect of a battle with Microsoft.

"Linux is not going to get into the desktop in the consumer market anytime soon," he said. "It's a saturated market."

However, de Icaza said there's a place for large-scale Linux desktop deployments in corporations and government agencies, and in poorer countries where fewer users can afford Microsoft software.

Linux is already ensnared in a legal controversy spurred by SCO Group, a Utah software company that claimed that Linux contains code illegally copied from SCO's version of the Unix operating system. Novell in May claimed that it owned copyrights on the Unix code, undercutting SCO's right to sue. Later, Novell admitted that it was possible that SCO might own the copyrights.

"It's still in the air as to who really owns the copyrights," Messman said yesterday. "There's sufficient confusion in the contract to support both sides' claims. We believe that this will be worked out over time."

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(c) 2003, The Boston Globe. Distributed by Knight Ridder/Tribune Business News.

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