Novells open source evolution a case study in adapting open source business strategies /

by Du Preez, Jacobus Andries.

Novell International was a l e a ding n e t work o p e r a ting s y s t e m p r o v i d e r i n t he 1 980’s a n d 1 9 9 0 ’ s . In t h e mid 1 9 9 0 ’ s Novell l ost market s h a r e i n t h e n e t work o p e r a ting s y s t e m market. To c o u n t er t h i s l o ss, Novell made a s t r a t e gic decision t o g o o p e n i . e . t o ma k e u s e o f o p e n s t a n d ards a n d open s o u r ce b u s i n e ss s t r ategies. Since t h e n Novell h as managed t o s u c cessfully c h a n g e from b e i n g a p r o p r i etary n e t work o p e r a ting s y s t em p r o v i d e r t o b e ing a l e a der i n Linux a n d o p en s o u r ce s o l u t i ons. I t s p rimary b u siness model makes u s e o f a s u b s c r i ption s t r ategy, s e l ling s u b s c r i ptions t o its Linux d esktop o perating system c a l l e d SuSE. This h a s b e e n i n s t r u mental i n t u r n i n g their b u siness a r ound. For e x a mple, c o mparing t h e financial results o f Novell’s fourth q u a r t ers o f 2 0 0 4 a n d 2 0 0 5 s hows a n increase of 4 1 8 % in Linux r e v e n u e to $ 6 1 m. N o v e l l h a s p r o v e n t h a t t h i s o p e n s o u r c e b u s i ness s t r ategy i s feasible a n d p r ofitable.