Chris Wolf

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Chris Wolf
Research VP
6 years at Gartner
19 years IT industry

Chris Wolf is a Research Vice President for the Gartner for Technical Professionals research team. He covers server and client virtualization and private cloud computing. Read Full Bio

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VMware – Novell SUSE Acquisition Rumors: Why it Makes Sense

by Chris Wolf  |  September 16, 2010  |  10 Comments

Today the Wall Street Journal reported “VMware in Talks to Buy Novell Unit.” The rumor likely comes as no surprise to those who have followed the recent VMware/Novell OEM agreement. The agreement resulted in VMware including a SUSE Linux Enterprise Server (SLES) subscription with vSphere licenses. VMware and Novell first started talking about an extended partnership in June. At the time, VMware noted that it would include SUSE Linux with its vSphere hypervisor as well as train its support organization to offer SUSE Linux support. The fact that VMware was making an investment in its support organization hinted at the potential of a larger deal.

In addition, VMware stated that its virtual appliance authoring tool, VMware Studio, would eventually offer SUSE Linux as the default VMware appliance OS. This marked a significant departure from VMware’s own Just Enough OS (JeOS) operating system.

If the rumors are true, there are a few reasons why I think acquiring a mainstream Linux distro makes sense for VMware:

  • JeOS wasn’t seeing wide acceptance in the enterprise. Many of our clients with strict OS certification and support policies were only comfortable supporting specific Linux distros (e.g., SUSE and RHEL) within their organization. For some special purpose VM appliances, JeOS had success. However, for many use cases JeOS was not acceptable due to factors such as integration with operational software (e.g., security and backup).
  • Three of VMware’s major competitors – Microsoft, Oracle, and Red Hat – are offering a hypervisor as part of a vertical stack that also includes their own supported OS. VMware is at the mercy of OS vendors and it’s understandable that its competitors would optimize their own OSs to work best with their hypervisor offerings.
  • VMware’s Open PaaS strategy is designed to give organizations the option to deploy Java applications to a variety of cloud providers as well as to internal infrastructure. When you deploy an application internally, it has to be on an OS accepted and supported by the IT organization. JeOS wasn’t a sure bet, so VMware needed more. The logical answer is SUSE.

Acquiring SUSE Linux is not about what VMware is doing over the next 2-5 years. They’ll continue to do very well running Windows OSs as VMs. However, over the next 5-10 years, the stakes will change. Microsoft will work to more closely integrate the Windows OS and its Hyper-V hypervisor. Paul Maritz knows that as a platform for Windows apps in a market where Microsoft is a direct competitor, VMware will eventually succumb to Microsoft. VMware has to work to chip away at their customers’ reliance on Microsoft OSs and applications. Propping up partners such as Google and Salesforce is a necessary step. Building a competitive application platform (via the SpringSource acquisition) is another. Offering an accepted OS for the application platform completes the puzzle.

If VMware acquires Novell SUSE Linux, it will have a vertical offering much like Microsoft, Oracle, and Red Hat. Many of VMware’s predecessors have proven that the best technology often doesn’t win in the long run. You can ask Novell that. This strategy will not guarantee long term success for VMware (Maritz is intimately familiar with Microsoft’s ability to compete and win), but offering an OS and a vertical stack is necessary to fend off similar offerings from competitors.

What do you think?

10 Comments »

Category: Cloud Server Virtualization Virtualization     Tags: , , ,

10 responses so far ↓

  • 1 Vvlsystems   September 16, 2010 at 8:22 pm

    The real differentiator will be if Vmware has success in stabilizing and gaining the customer confidence that RH currently has through it’s strong partner and support ecosystem. Otherwise it’s just another OS.

  • 2 Doug Lane   September 16, 2010 at 9:17 pm

    Great insights, Chris. I agree that it would make a ton of sense for VMware, and I also can’t think of a better outcome for the SUSE folks. The value and relevance of SLES would be magnified overnight versus just trying to chug along as part of a private equity portfolio.

    Seems like a win/win. Hope the rumors are true.

  • 3 Vishal Ganeriwala   September 16, 2010 at 9:28 pm

    Chris, I agree with most of what you say in the article but why would VMWare buy the entire Novell assets. I think a more likely deal would be buying just the SUSE piece and let the investor bankers buy the rest of the assets and patents.

  • 4 Lodewijk van Klaveren   September 17, 2010 at 3:49 am

    Hi Chris, this a very nice balloon, not sure it will float…
    Novell’s SLES has it’s own Xen hypervizor onboard. So, if VMware is going to take over, I assume this Xen knowledge will go overboard..

    Novell’s SLES and Microsoft are connected via the Interoperatibilty initative (www.moreinterop.com). For Novell, this was a very serious boost in SLES revevu. So, this interop could be a good thing for VMware, but again, this initiative is based on Xen…

    See what the future brings…

  • 5 Chris Wolf   September 17, 2010 at 10:45 am

    Vishal – I agree with you. My point in the post was that there are compelling reasons for VMware to acquire Novell SUSE (not all Novell assets). The WSJ article hinted that there is another suitor for the remaining Novell assets.

    Lodewijk – You raise a good point. I had thought of the MIcrosoft agreement and agree that it adds an interesting dynamic. If the acquisition occurs, I think it’s a fair bet that VMware would jettison Xen. However, leveraging KVM as the hypervisor to support their CVP initiative would be interesting. I think it’s unlikely that VMware would embrace KVM as a bare-metal client hypervisor, but using KVM would make it easier for VMware to leverage existing device drivers rather than write their own. Again, very unlikely, but it would be interesting to watch unfold.

  • 6 Jeff Crawford   September 17, 2010 at 1:06 pm

    Chris-

    Great article. I have been following this situation closely as we rely on Novell products pretty heavily. What impact, if any, do you think VMware’s acquisition will it have on its’ corporate overlords Cisco and EMC (If I recall correctly EMC still owns 80% of VMware and Cisco owns 10%)? Could this pave the way for either of these behemoths to better support SUSE Linux? Finally, I am a little perplexed as why EMC wouldn’t do the deal and brag about all of the synergies with their other properties including VMware. Surely FLARE could benefit from some of the kernel programmers acquired in the acquisition and VMware would still benefit. Not to mention RSA, etc..

    Thanks for your analysis,
    Jeff Crawford

  • 7 Kaprino   September 17, 2010 at 2:18 pm

    Let’s not forget Xen main developers was bought by Citrix, so why would they want their platform of SUSE Xen? Novl’s key assets is SUSE which is a plus, Netware is dead, but maybe they have other managenet software (Zen?) is worth something?

    Cheers,
    Kaprino

  • 8 Doug Toth   September 17, 2010 at 4:07 pm

    Zen would couple very nicely with the View product suite, offering even more desktop management tools to pair up with ThinApp.

    eDirectory could displace the ADAM instances needed for vCenter and View exploitation, and perhaps provide a useful interconnect to AD. Not to mention a far more capable multi-site replication.

    Not seeing why these other pieces of Novell’s portfolio wouldn’t be brilliant additions for VMware.

  • 9 VMware View and Suse Linux Desktops   September 18, 2010 at 7:35 pm

    This makes sence if VMware wants to -once and for all- attack the desktop market with a Desktop vJeOS, which means, a virtual linux desktop (with an Internet browser)… What I want to say is that they get the opportunity to integrate VMware View w/ Linux Desktops, providing a VMware View Agent for Suse Linux Enterprise Desktop, with PCoIP capabilities… I hope someone is seeing the light, since everyone knows Microsoft is -slowly- loosing the Desktop market to Apple (which unfortunately doesn’t allow virtualizing their desktops on top of ESX/ESXi) and Linux… Great win in case this is VMware’s purchase roadmap…

  • 10 Clive Bearman   September 27, 2010 at 4:18 pm

    Hey Chris,

    It does indeed make sense for VMware to own an OS so that they can assemble a stack that could compete with MS and Oracle.

    However the WSJ article presumes that Novell’s Linux business and SUSE are synonyms, but Novell’s Linux business stretches much deeper into other software projects like Mono, OpenOffice, GNOME, KDE and a desktop distro.

    If VMware is looking to purchase Novell’s entire Linux business and not just SUSE, then that puts them in the business of supporting multiple distros on multiple processor architectures (mainframe, SPARC, Itanium and RS600) and not just x86. In addition there’s specialty stuff like Real-Time kernels and Point of Sale. Also don’t forget that the core hypervisor in SUSE is Xen and not vSphere.

    That’s quite a tangle of assets for vmware to assimilate, spin-off or unwind. In addition their hypervisor was hardware agnostic, but now they might be put in a position of playing favorites (IBM vs HP for example). Which could be a detriment to the core vSphere business.

    Finally there’s the notion of proprietary culture vs the open source world too. Novell had a hard time melding the two together (we’re currently seeing this play out with Oracle and Sun) and there’s no reason that vmware would have an easier time.

    So I were Paul Maritz and I really want a server OS then I’d take a page out of Larry Ellison’s book and fork the bits I want, hire some clever talent to support it and not worry about purchasing the Novell Linux assets.