Sun Exec Sparks Novell Acquisition Rumor
by Duncan
August 5, 2004
Enterprise Linux> The rumors about a possible Sun Microsystems acquisition of Novell could portend a new era in the business of technology: Blogging for dollars. Whether or not the deal goes through, the rumors sparked by Sun COO Jonathan Schwartz’s Web logs are likely to affect stock prices of the major industry players. read more>
Both companies have an affinity for Linux. But these vendors carry too much baggage and too much losses to make a good merger.
Even though it lost more than $160 million in 2003, Novell still has a market cap of $2.64 billion. More than three-quarters of Novell’s revenue comes from software maintenance fees, mostly from the Novell NOS, and not from Linux licenses. Because there is little overlap between Novell’s NOS-dominated business and Sun’s hardware focus, there’s little opportunity for consolidating expenses–not a good thing for two companies that lost a combined $500 million in their last full fiscal year.
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