Novell Said to Be Looking to Sell SUSE Linux to VMware

By Lucian Parfeni on September 17th, 2010 13:24 GMT

Novell, the company behind the popular SUSE Enterprise Linux distro, hasn't been having a great run lately. The latest rumor is that the company is trying to sell off its Linux business, one of the most serious bidders being VMware.

According to the Wall Street Journal, Novell has been in talks with several companies, two of which are serious about acquiring at least some parts of the company.

Novell as a whole is up for sale and has been for the past few months since it has been looking for interested buyers. VMware is particularly interested in SUSE Linux.

The virtualization technology company doesn't have a Linux distribution of its own even though it relies quite heavily on Linux for its products. VMware already has a deal with Novell and is working with SUSE Linux, so the distro would make a perfect fit.

VMware is not interested to sell SUSE Linux directly, rather, it would integrate it with its existing virtualization products. SUSE Linux is already offered by VMware as an option for guest machines to its customers.

Novell brought in $605 million in revenue in the first three quarters of its fiscal year with a net profit of $56 million. The company is valued at $2.1 billion, but it has $1 billion in cash and equivalents.

Outside of its Linux business, though, Novell is not a particularly active or innovative company, relying on its portfolio of legacy networking products, particularly the NetWare suite, for revenue.

Novell acquired SUSE Linux for $210 million in 2003. It's unclear how much Novell wants for the Linux business now and the two sides are currently discussing details of the sale, like how to split up the company's assets.

Talks may not finalize however and it will still be at least a few weeks until any sort of official announcement.
VMware is interested in SUSE Linux
   VMware is interested in SUSE Linux
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