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Issue of December 2003 

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Novell to acquire SuSE Linux

Novell announced a $210 million plan to acquire SuSE Linux, a distributor of the open-source operating system. The move has been applauded by the industry in general. Even Microsoft has responded positively, and IBM plans a $50 million investment in Novell.

Once the acquisition is completed (probably in January 2004), it could impact certain companies. For one, SuSE, the number two Linux distributor, will have a stronger position. That will directly impact Red Hat. Outside the Linux camp, other operating system makers may also have one more reason to worry.

More importantly, this acquisition will give Novell a new opportunity; it has so far been servicing a base of NetWare users.

Novell CEO Jack Messman said, "Linux no longer needs to stay at the periphery. It can come into the core of the business. It can come into the data center."

Novell's existing product line-up includes a desktop and a server version of Linux, as well as a number of utilities for managing and configuring Linux-based machines (from its Ximian purchase and developed in-house for its ZENworks product line). The combination of Linux, add-on management products and Novell's support and training services should offer corporate customers a viable alternative to products that are based on Microsoft's Windows operating system, according to analysts.

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