| Swiss government switches 3,000 systems to Linux |
Dec. 13, 2005
Novell Inc. Tuesday announced an agreement with the government of Switzerland to replace the software in 3,000 of its servers with the company's SUSE Linux operating system. Operational efficiency and cost were key factors driving the Swiss government's decision to move to Linux, according to Novell.
Novell did not disclose the value of the contract but did say it was the first formal procurement of any Linux platform by the Swiss government.
"Linux has been gradually introduced into various government departments in recent years, but this is the first formalized procurement process regarding the introduction of Linux at a federal level," said Jurg Roemer, Delegate for Information Strategy of the Swiss Federal Government.
"The agreement we have reached applies to the entire Federal Government and will see the adoption of Novell's SUSE Linux throughout the Swiss federal administration."
Since Novell acquired Germany's SUSE Linux two years ago, it has made a handful of noteworthy enterprise Linux deals to go with many smaller transactions. Last August, for example, the company announced an agreement to supply 250,000 of its Linux desktops to Argentina.
Deal comes at crunch time
The Swiss deal comes at a crucial time for Novell, which has had a difficult 2005 -- especially in personnel turnover, layoffs, and investor-management relations.
On Nov. 1, under pressure from a vocal group of investors, Novell replaced Jack Messman as company president with former VP Ron Hovsepian, although Messman retained two other titles -- CEO and chairman of the board.
Novell engineer and SUSE Linux co-founder Hubert Mantel announced his resignation on Nov. 10, saying "This is no longer the company I founded 13 years ago." The company also laid off 600 employees and may divest some of its holdings.
In its fiscal fourth quarter ending Oct. 31, Novell generated $61 million in revenue from Linux, having sold 65,000 subscriptions. The company lost $5 million during the quarter on $320 million in total sales.
Good news for Novell
"We've had some growing pains this year, as we move from the classic software company, selling VMware and other products, to a Linux software company," Novell Director of Marketing for Linux and Open Source Charlie Ungashick told DesktopLinux.com.
"But we've had some shining stars in that overall picture, too. Our new Open Enterprise Server brought in $31 million in revenue in its first quarter alone, and that's really helping us gain marketshare," Ungashick said.
Ungashick would not specify what operating systems the new SUSE Linux server software would be replacing in Switzerland, saying only that "typically these deals involve an upgrade from Unix servers" and often lead to software sales in other areas.
"The announcement ... is good news for Novell and may lead the purchase of other Novell technologies, such as identity management and systems management," Stacey Quandt, Research Director for Security Solutions and Services of the Boston-based AberdeenGroup told DesktopLinux.com in an email.
"It is notable that issues of operational efficiency and lower cost were drivers for the Swiss government's decision to deploy Linux, because this means that the ability to reduce IT spending and improve performance are high-level priorities," Quandt said
"The fact that Switzerland is literally in SUSE's backyard is likely to have influenced the sale. The truly good news would be if Novell is also able to execute Linux sales in high-growth markets such as Brazil, China, Korea, India and Russia," she added.
Typically, an enterprise deal like the one with Switzerland takes three to nine months to close, Ungashick said.
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