This blog post was written by Pam Derringer, SearchEnterpriseLinux.com’s news writer.

Red Hat Inc.’s enviable earnings boost for 2007 is a clear reflection of the market’s growing confidence in open source software, according to Stephen Elliot, a research director at IDC.

Rather than a signal of one player’s increasing dominance, Red Hat’s $523 million in revenue last year – a hefty 31% increase – shows that open source “is a trend that continues to move forward.

“There seems to be enough of a market to go around,” Elliot said. “Each company has its own strategy,” he said, citing Novell Inc.’s recent acquisition of PlateSpin Ltd., developer of innovative virtualization and management tools. “The trend [toward open source] continues to go forward.”

“Red Hat’s revenue growth shouldn’t be surprising.” he continued. “The current economy creates almost a perfect storm in terms of timing because midsized companies are looking at lower-cost options now.”

But it’s not just a tougher economy that has boosted open source companies. A key factor in the growth of companies such as Red Hat and Novell is their single-minded focus on product development and customer support, Elliot said. Another critical growth component is the ability to spot new technologies such as virtualization or enterprise management and incorporate them quickly into their own offerings, he said.

An ongoing challenge for open source companies is continued improvement in interoperability, not only with Windows products but also among their own offerings, Elliot said.

The growing adoption of open source “will continue to move the needle forward … and continue to chip away at [proprietary software adoption] with some success,” he predicted. “Open source isn’t right for everything but [its increasing acceptance] will drive additional discussions where open source wasn’t previously thought of as a viable alternative.

This blog was contributed by SearchEnterpriseLinux.com expert Sander van Vugt.

At Novell Inc.’s annual BrainShare user conference in Salt Lake City, I talked to Guy Lunardi, one of the most important guys behind Novell’s SUSE Linux Enterprise Desktop (SLED). I had one pressing question for him. I showed him my new Dell XPS laptop, which has a lot of fancy stuff and runs out of factory Windows Vista (since that is the only OS that will allow me to use all the fancy stuff). So I asked him, “When will I install SUSE Linux on that?”

He responded, “Sander, if you go to a shop, buy a Vista DVD and install it on your laptop, do you think it will all work?” The answer was of course not.

When you introduce new hardware, one of the major issues is driver support. “Currently we are talking a lot with the people that develop the devices that are in these new computers to make sure that Linux drivers will be available,” Lunardi explained. “We help them wherever we can and it’s only getting better. It helps that we have some major customers like the Peugeot car manufacturer in France that demand specific functionality. They ask [for] a feature, we’ll make sure they get it and the result of all the effort will be in our new software.”

So there have been lots of developments recently. As a result, when it comes out later this year, openSUSE 11 will be as good as Windows Vista in supporting devices. “But,” Lunardi assured me, “you’ll always have to complete the installation of your operating system by downloading and installing additional drivers. That’s the case for Linux, [just] as it is the case for Windows.”

Fair enough. I’ll give it a try when openSUSE 11 comes out.

The Novell-sponsored openSUSE Build Service recently added support for Red Hat Enterprise Linux and CentOS. This community project provides a development platform for future openSUSE Linux distributions . This is in addition to distributions including Debian, Fedora, Ubuntu and others. With this build service framework, developers can make packages with increased compatibility across distributions. The openSUSE build service with additional distribution compatibility is available now.

The management of the openSUSE Build Service has a direct line to Novell for influence of future releases. More information on the new compatibility can be found at the openSUSE news site.

What are Red Hat, Novell and Canonical going to have to do in 2008 to in order to dominate the desktop and server Linux market?

Let’s take a moment and assess the situation. Red Hat is the dominant force in Linux right now. They own the enterprise market. SUSE is also supported by many IHVs as a ready-to-install operating system (OS), but does not have nearly the market share as flouted by the fedora. Ubuntu is the little Linux OS that could and, in the last three years, it has gripped the desktop Linux market with a stranglehold and will not let go.

It seems that each distribution has found a niche: Red Hat and Ubuntu are the leaders in their markets, and SUSE is a comfortable runner-up. However, history has shown us that businesses are not content to stay still too long or play second fiddle. So, what will Red Hat, SUSE, and Ubuntu have to do in the new year to gain new ground?

Red Hat

I’ve been using Red Hat Linux since the mid-90s. They are arguably the most successful proprietors of Linux ever. Red Hat figured out what many companies are just now figuring out about virtualization: it’s not always about the core technology, it is about how you support and manage that technology. Red Hat provides a better support and management structure for their products than any other Linux vendor. It is no wonder they dominate the enterprise market.

On the flip side of the coin, Red Hat has long since been usurped as leaders on desktops. There was Slackware, then Gentoo and now Ubuntu. Sure, Red Hat sponsors the Fedora Core project, but it does not have the market share to be considered in the same game as Red Hat. In the coming year, Red Hat needs to get rid of the Fedora Core moniker and reel its desktop community back in under the auspices of the Red Hat name. Red Hat is associated with stability and the enterprise: they need to create a desktop product that also has these associations. True, Red Hat offers its Enterprise Linux Desktop product, but it lacks the bleeding-edge features of Fedora Core that make the latter so appealing to the desktop crowds. Red Hat must figure out how to transition the passion of the Fedora Core audience back into the house that the Fedora built. Once Red Hat is able to recapture those users, then it can finally offer a datacenter-to-desktop computing solution that can dominate servers and workstations everywhere.

Novell SUSE

Novell has been one of the most prolific innovators in the IT industry for over the past two decades. Unfortunately, the company that should be a global IT leader today has suffered one bad management and marketing decision after another. Case in point: all this nifty, gee-whiz technology called Compiz for desktops originated with Novell. Do most people know that? I doubt it. They’re probably more familiar with the rift between Beryl and the original Compiz developers (and subsequent kiss-and-make up).

The reason that Novell barely gets credit for its work is that its marketing team never leads with anything remotely innovative. If they played it any safer they’d be asleep! Remember iFolder? Unless you’re a fan of information synchronization software you probably do not. iFolder was a Novell project that offered unparalleled functionality in the arena of client compatibility and server features. What happened to it? Novell did not know what to do with it and open sourced the code in order to wash their hands of the project.

In the next 52 weeks Novell needs to do what they do best: innovate. Then they need to do well the thing they do worst: they need to lead with their innovation. They need to create a mass marketing campaign around SUSE Linux and its new innovative features that will leave the other vendors in the dust. Novell needs to stop playing the shrinking violet and give a new generation of Linux users a reason to hold Novell SUSE Linux high above the other distributions.

Canonical Ubuntu

Ubuntu has become the desktop user’s Linux of choice in the past three years and shows no signs of slowing down. Canonical understands what Novell does not, and that is marketing. The marketing machine behind Ubuntu has been working non-stop. Additionally, it does not hurt that Mark Shuttleworth, Canonical’s founder and CEO, is as charismatic as Steve Jobs and is forming deals with independent hardware vendors that results in Ubuntu being offered by the likes of Dell on their laptops and desktops.

Canonical is correct in that their next move should be to penetrate the server market. From their server and JeOS versions of Ubuntu to their alliances with IHVs in hopes of getting Ubuntu officially supported on server hardware, they are doing everything correct. However, they could be doing more. Canonical is in the unique position of having herds of passionate users behind them. (Actually Apple is in the same position, but they seem to have forgotten that they are a computer company.) They have a loyalty base not seen on this side of OS X. Canonical needs to leverage this loyalty and create a vertical initiative that will provide even more features to its desktop users as long as the servers said users are connecting to run the Ubuntu OS. Think Bonjour for Ubuntu. There is no reason that Canonical cannot achieve this with Open Source projects either. From integrating Beagle with ZeroConf to collaborative TomBoy notes-sharing technology. It is all possible.

The ultimate achievement would be when Canonical finally creates an Active Directory-like system to integrate its server OS and desktop OS into a single, manageable environment.

A three-way see-saw

The Linux market is currently a three-way see-saw. Any of the big three vendors could change the balance of things. Do you have a different outlook? I’d love to hear it!

In the past 24 hours, the Red Hat Enterprise Linux (RHEL) beta became available through Amazon’s Elastic Compute Cloud (EC2) service. While RHEL has been available in limited beta for a few weeks, this public beta announcement came on the heels of Novell’s launch of SUSE Linux Enterprise Real Time 10, its latest enterprise OS offering.

Red Hat executives made the announcement of their partnership with Amazon a few weeks ago. Now users of Amazon’s Web service can participate in the testing of Red Hat’s latest enterprise-level Linux offering with AMIs (Amazon Machine Images) within the Amazon EC2 environment with email-based support for the public beta, according to the the Red Hat Online Services Team. The decision to take RHEL into the cloud is part of a larger company deployment strategy.

The launch of SUSE Linux Enterprise Real Time 10 is arguably the bigger announcement. Novell’s new SUSE is a real time operating system, which allows critical processes to take priority over processor tasks. The new release gets many of its bells and whistles (e.g. sleeping spinlocks, interrupt threads and high-resolution timers) from real-time patches developed by the Linux community.

Among Novell’s Real Time partners is Sun Microsystems, whose open source Java will benefit from the collaboration — and from competition between Novell and Red Hat. In light of Red Hat’s new strategy and the announcement that Red Hat would also be collaborating with Sun on Java, I wouldn’t be surprised if Red Hat were trying to create more Java developers on their end. What do you think? Email me or leave us a comment.

Over at InternetNews.com, Sean Michael Kerner picked the brains of several analysts to see which of them saw any effects, positive or negative, from the year-old partnership between Microsoft and Novell.

If you’ll remember, in November 2006 the two companies entered into a controversial partnership that — in theory — would allow interoperability between Windows and SUSE Linux as well as a patent covenant. The covenant ensured that Microsoft would not sue Novell’s SUSE Enterprise Linux Server users over alleged intellectual property infringement by open source applications.

Suffice to say, the analysts were mixed on whether or not the partnership was anything more that a temporary revenue boost for Novell (Novell noted that as of the end of the third quarter of its fiscal year, it had invoiced more than $105 million in SUSE Linux Enterprise certificates through business collaboration with Microsoft).

Our good friend Charles King, founder of Pund-IT, saw some glimmer of hope for Novell, but as one of two pro-Novell analysts (and I use that label very lightly in this case), even he wasn’t so sure. In fact, OS business gains are still very hazy for Novell, and King could only point to the firm’s 50% revenue gains in the Open Platform Group.

“This can’t be traced directly to the company’s deal with Microsoft, but the agreement may have had an impact,” King told InternetNews.com. “The financial effects for Microsoft appear negligible (or so company CEO Steve Ballmer has said), but the Novell deal arguably paved the way for the company to pursue other agreements with open source players.” (InternetNews.com)

Other analysts, including SearchEnterpriseLinux.com regular Gordon Haff, of Illuminata Inc., couldn’t identify any gains for Novell (or losses for Red Hat) that tied in directly with the Microsoft partnership.

Two corporations fire off a mean press release with 30 new customers and the opening of an interoperability lab — where’s the beef?

I realize it’s only one year in, but I think it would behoove Microsoft and Novell to flesh out what it is they mean when they talk about “interoperability frameworks” and the like. Revenue numbers from Novell for its OS business wouldn’t hurt, either.

Working with vendors is tough. You need their help, they want your money. Hopefully, whatever it is they help you install works and the price meets you both somewhere in the middle (as in your side of the middle, right?).

Sometimes this process is a headache, but sometimes a project can really surprise you—things just work and upper management is just peachy keen with how the whole thing looks on the balance sheet.

In that vein, SearchEnterpriseLinux.com wants to help its readers discover the best of the best in Linux products for the enterprise in our prestigious SearchEnterpriseLinux.com 2007 Products of the Year awards. We’ve been asking readers and vendors over at SearchEnterpriseLinux.com to nominate a favorite product they’ve used or to nominate their own new product, and now we’ve opened it up to the Intertubes here at the Enterprise Linux Log. Regardless of where you fall — vendor, user or general Linux guru –the deadline is drawing near!

Our editorial team and a select panel of industry experts and analysts are currently accepting submissions online until 5 p.m. PST on Nov. 9, 2007 in a range of categories, including: Server Linux platform product (either a distribution release or a new, integrated server Linux offering); Security applications/tools for Linux on the server; Virtualization product for Linux on the server; and Linux administration tools. You can access the 2007 POY submission page in the link above.

To qualify, new or significantly upgraded products must have been shipped after October 31, 2006, and before November 1, 2007. Submit your entry today and let us know what you think are the top data center products on the market!

Novell Inc. today announced a “restructuring” designed to eliminate costly American engineering jobs and re-create them in India, where labor costs are significantly less.

On Oct. 9 these layoffs were only a rumor, as we reported it here on the Log, but today it’s cold, hard fact.

Novell laid off 250 workers in the United States as part of an ongoing restructuring program to slash costs, company spokesman Bruce Lowry said Friday. Many of the jobs will be moved to Bangalore, India, where labor costs are lower than in the United States, he said. “While it’s not a one-to-one match of jobs lost in the U.S. to jobs gained in Bangalore, the most significant impact was on product development,” Lowry said. “The most important piece of that was, in fact, hiring engineers in India and reducing engineers in the U.S.” The company has previously told investors that it will take $35 million to $45 million in restructuring charges this year. Costs associated with these layoffs are included as part of that $35 million to $45 million, Lowry said.

The estimate earlier this month was that Novell would lay off 50-60% of its Workgroup division, although this brief from Reuters said nothing of which department these layoffs came from. This leads me to believe that the $35 to $45 million restructuring mentioned above is nowhere near complete.

I had a great call with First American Title Holding Co. about Novell Open Enterprise Server 2 the other day. Why was it so great? Because it surprised me. I went in expecting one thing and got another. For a reporter, that’s great. It’s an education. It’s like waking up thinking it’s Sunday when it’s really Saturday. Or something like that.

One of the goals I had going in was to get details about First American’s new SUSE Enterprise Linux deployment, as well as some additional bits of file serving goodness from the OES2 they installed on top of it. As it turns out, the creme de la creme was the virtualized NetWare servers they were running using Xen paravirtualizaiton. Many NetWare shops simply cannot migrate off that OS, as the applications are customized and cannot run any other way.

Xen: Ready for OES2’s launch?

With the launch of OES2, Novell is trying really hard to entice those last few NetWare shops to make the leap to Linux. They’re doing this by enticing them with virtual NetWare servers running in Xen. That said, was Xen mature enough for First American’s mission critical NetWare applications? Would it perform as well?

At first glance, things were not looking too good.

Kurt Johnston, a lead engineer on the First American migration, wasn’t optimistic. “I did not have high expectations for Xen,” Johnston told me in a call last week. “With Xen being as young as it is, I was expecting it to be very difficult to install and configure a new domU onto dom0.” Johnston and his boss, IT director Dan McDougall, were also wary of performance issues they had read about in trade magazines and had heard from other users throughout the year.

But they were soon pleasantly surprised, and so was I. Xen wasn’t VMware ESX Server, but it was close enough–at least for First American. That, at least to me, was the surprise. It’s been a 24 hour VMware lovefest for the past two years or so, and I hadn’t been up on the subject enough to see any changes in that dynamic. When I talked with analysts in 2006 and ‘07 I had always heard Xen had plenty of potential, but like any new technology it needed work. Illuminata senior analyst Gordon Haff, speaking to me for the same article, told me that much of the work needed to prove that potential had been completed throughout 2007. It was a collection of hard work and bug fies; not any single thing, he said.

“The fact is, [Xen] was rather simple to install. It was the ease of installation and configuration that surprised me. I was expecting to use quite a bit of [a command line interface],” Johnston said. Fortunately for First American, there was very little CLI, if any. No headaches, no problems–save one.

There was one issue worth noting about Xen, according to Johnson. He said one thing he would like to see in Xen is in “the paravirtualization side of things”:

“I’d like to be able to somehow mask certain virtual machines and only allow certain LUNs [logical unit numbers] on the SAN [storage area network] to serve and see certain virtual machines, via Xen.  I’d like to be able to build in a limit to the different servers to see only specific LUNs on the SAN.”

He went on to say that having the ability to visualize the host bus adapter (HBA) and use Xen to manage virtual Fibre Channel ports would allow LUN masking of these ports and give the ability to grant access to only specified LUNs.

This capability is also still an issue in VMware environments as well, but a support update for N_Port ID Virtualization (NPIV) in VMware ESX 3.5 was announced earlier this month.

Fixes from XenSource, Novell

But what about XenSource, the corporate entity behind the Xen hypervisor? Or Novell, which was the first commercial Linux OS vendor to bake Xen into its OS? Was a fix forthcoming for those Novell OES2 customers, like Johnston and McDougall, that wanted the same functionality in their environments? Simon Crosby, CTO of XenSource, responded to that question regarding support for N_Port ID Virtualization (NPIV) via email this morning. He said:

“It’s planned ASAP for XenSource products (Q1 08). The Xen project doesn’t have a storage roadmap - just the hypervisor. Whether any vendor puts a particular storage technology into its product is up to that vendor.”

Novell is working on a multi-vendor fix: “We are working on N_Port Virtualization together with Qlogic and Emulex,” said Holger Dryoff, vice president of management and marketing at Novell. “This will be available in one of the future service packs of SUSE Linux Enterprise Server 10 and therefore to OES 2 customers as well.”

I find all of this interesting because it will mean more choices. More choices means competition, and competition means happier customers. Happier customers are more apt to speak to the press and tell their stories. Whether the technology ultimately makes the customers happy, well, that’s what we’re here to find out.

It was but a rumor last week, but today it looks like it’s all true: Novell is set to layoff a large chunk of its Workgroup division.

The number last week was an estimated 50-60%, but that’s still unconfirmed right now. What we do know is that an inside source at Novell said the layoffs are happening now, and specific departments are not yet known.

Regardless of your personal feelings about Novell the business, there’s nothing good to be gleaned from this news today.

Blogger and Alfresco guru Matt Asay tries anyway:

I’m no fan of Novell, but I hate layoffs. I’m sincerely sorry to see this happening. The good news, however, is that there are much better companies to work for out there. Like all of them. Just ask Greg Collier. He left Novell a year or two ago to join Mozy/Berkley Data Systems, which was bought by EMC recently. Or Chris Stone, now CEO of Streamserve. Or John Vigeant who left Novell and joined XenSource (you know what happened next). Or Charlie Martin who is now sitting at MuleSource. Chris Cooper (my old boss) left to be a VC with UV Partners. Bill Mason went to Red Hat and is now at Zmanda. Etc.

Over at Linux news aggregation site LinuxToday, comments (always starting with the standard “I don;t like layoffs either, BUT…̶ have already started to compare Novell to Enron.