Novell And Red Hat On Track For Growth - InformationWeek

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Software // Enterprise Applications

Novell And Red Hat On Track For Growth

Linux vendors attempt products designed to extend beyond the basic operating system, a move they hope will result in bigger profits.

Novell last week said it remains committed to both open-source and proprietary operating systems and management software. Red Hat Inc., Novell's chief rival in the Linux and Linux-management-software markets, reported strong revenue and profit for fiscal 2004 and said it will continue packaging Linux with open-source software modules that support the operating system.

Novell's Open Enterprise Server software, introduced last week at the vendor's BrainShare conference, is a combination of NetWare 7 and SuSE Linux Enterprise Server 9 --the first product to combine the technologies--as well as networking services designed to interoperate between the two systems. The company's upcoming ZENworks 6.5 resource-management application will let businesses manage Linux and Windows 2003 server, desktop, and handheld environments. Novell also is contributing SuSE's YaST (Yet Another Setup Tool) Linux systems-management tool and Novell's iFolder personal storage and filing app to the open-source community.

Novell will be profitable this year, chairman and CEO Jack Messman says. Keeping that promise will require that the company balance development in its declining NetWare business with investments in Linux software and services.

Novell's strong software portfolio shouldn't be overlooked, because it runs on both SuSE and Red Hat Linux, IDC research director Al Gillen says. Novell also has decades of experience managing services and channel organizations, which Forrester Research principal analyst Jonathan Penn says will help it support large customers.

Red Hat ended 2004 with revenue up 39% to $126.1 million and a profit of $14 million, an increase from 2003's $6.6 million loss. It, too, wants to grow its business beyond the base operating system. It debuted software for managing Linux provisioning and configuration in January and last year acquired storage-infrastructure vendor Sistina Software.

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