The speculation won't go away. Several companies apparently have bid to acquire Novell. Some pundits think VMware is among the bidders. Why's that? The short answer involves a mutual enemy called, um, Red Hat (assuming you believe the rumor). Here's the chatter.

First, let's look at recent developments:
  • March 2010: Novell rejects unsolicited takeover bid from Elliot Associates, a private equity firm. But Novell says it's willing to listen to other takeover offers.
  • May 20, 2010: Novell apparently sets a deadline for companies to submit potential takeover bids for Novell's business.
  • June 9, 2010: Novell and VMware announce virtualization partnership involving vSphere and Novell SUSE Linux.
  • June 22, 2010: The VAR Guy learns Red Hat has hired a Novell veteran to assist the Red Hat Enterprise Virtualization (RHEV) partner push. Also, Red Hat CEO Jim Whitehurst predicts RHEV will leapfrog VMware the way Red Hat Linux leapfrogged Sun Solaris.
Clearly, the stage is set for a Red Hat vs. VMware showdown. Red Hat is willing to partner with Microsoft in its quest to overtake VMware. And Red Hat sees the line between Linux and virtualization blurring.

The $2 Billion (Or More) Question

The VAR Guy wonders: Does VMware see the market similarly? If so, does that mean VMware is willing to pay $2 billion or more to acquire Novell? Plenty of open source pundits are speculating about a potential VMware-Novell merger or acquisition.

The VAR Guy's prediction: No such deal will happen. Sure, blending VMware with Novell SUSE Linux into a single company is an intriguing thought. But is VMware really willing to take on the rest of Novell's business -- identity and security management, groupware, etc? Hmmm... Difficult to say.

Novell would need to convince VMware that the Novell Intelligent Workload Management strategy (which encompasses all Novell products) can plug into the VMware organization.

By the way, neither Novell nor VMware comment on M&A rumors. And in this case, The VAR Guy believes the speculation is pure rumor. Though our resident blogger will eat crow if such a deal happens...

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