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Novell to Acquire SUSE LINUX

Novell/SUSE LINUX to Support IBM eServer Line

Novell announced this week that it will acquire SUSE LINUX in a $210 million cash deal subject to regulatory approval and the winding up of shareholder agreements. "This is fantastic news for the Linux Community," observes LWM editor-in-chief Kevin Bedell. "With the stability and name power of Novell and IBM behind SUSE LINUX, I believe we are on the verge of dramatic growth for Linux in the enterprise. Coupled with Novell's earlier acquisition of Ximian, I believe the acquisition of SUSE positions Novell extremely well for next 5-10 years."

"What we are seeing today is a statement," Bedell continues. "It's a statement aimed at the corporate world telling them that Linux is now a stable, supported application with a long future in front of it. This is no less a statement than when IBM purchased Lotus Notes - after which Lotus Notes installations increased from about 3 million to over 105 million! It would not surprise me to see similar increases in SUSE installations given today's news."

Novell expects the transaction to close by the end of its first fiscal quarter (January 2004). With this acquisition, Novell will become the only $1 billion software company with a Linux distribution and the worldwide technical staff to support it. Novell/SUSE LINUX will also be the world's largest supplier of desktop-to-server Linux solutions and technical support.

"CA feels this move is excellent for the industry and supports the two distribution environment," commented Sam Greenblatt, SVP and chief architect of Computer Associates' Linux Technology Group. "The excellent global support that Novell brings to the open source community will help continue market adoption of Linux from the desktop to the server. CA fully supports Novell/SUSE in their integration efforts and looks forward to working with them to continue CA solution support for SUSE LINUX."

This acquisition follows Novell's August purchase of Ximian. Novell states that both the Ximian and SUSE LINUX acquisitions affirm Novell’s commitment to promoting the open source model and developer community.

Novell today also announced that IBM intends to make a $50 million investment in Novell convertible preferred stock. In addition, Novell and IBM are negotiating extensions to the current commercial agreements between IBM and SUSE LINUX for the continued support of SUSE LINUX on IBM's eServer products and middleware products to provide for product and marketing support arrangements related to SUSE LINUX. Both of these agreements will be effective when the acquisition of SUSE LINUX by Novell is completed.

"Responding to customer demands for open, standards-based computing, Novell has been dedicated to a cross-platform vision for four years now, and Linux is an increasingly important part of that strategy," said Jack Messman, chairman and CEO of Novell. "The acquisition of SUSE LINUX will complete Novell's ability to offer enterprise-class Linux solutions to our customers from the desktop to the server." Messman explained, "We chose SUSE LINUX because they are a clear market leader in Linux technology for the enterprise. With this acquisition, Novell will be the only billion-dollar software company with a Linux distribution and a worldwide ecosystem around it. A worldwide technical staff of more than 600 has been trained to support Linux. The acquisition of SUSE LINUX completes our technology stack from the desktop to the server."

"Novell understands the power of open, standards-based computing, and has been moving in that direction for some time," said Richard Seibt, CEO of SUSE LINUX. "Novell's global reach, marketing expertise and reputation for security, reliability and global enterprise-level support are exactly what we’ve been seeking to take SUSE LINUX to the next level. We've also been impressed by the incredible loyalty and competence of Novell customers and business partners, and we're looking forward to joining forces to help customers gain the benefits of Linux and to help Novell continue to expand its role in the open source community."

Novell began building solutions for Linux in early 2000, when it made its eDirectory technology available on Linux. In April of this year, Novell announced it would make all the services that run on its NetWare operating system run on both the NetWare and Linux kernels in the future. In August, Novell acquired Ximian with its Linux desktop management solutions and its leadership to promote Linux desktops and to enable Microsoft .NET applications to run on Linux.

In September, Novell announced the open beta of Novell Nterprise Linux Services (NLS), an offering that runs on SUSE LINUX and Red Hat and provides a variety of networking services for Linux environments. IBM, HP and Dell have all licensed the NLS technology for resale to their customers. With the acquisition of SUSE LINUX, Novell will distribute the underlying Linux platform itself, in addition to the services for Linux that Novell already offers.

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