Novell says Linux now breaking even

By Sam Varghese
Monday, 01 March 2010 10:24

Business IT - Open Source

Novell has announced results for the first quarter of 2010 and says its income from Linux has risen, compared to the first fiscal quarter of 2009 and that this part of its business has reached a break-even point.

Chief financial officer Dana Russell told an analysts' briefing: "We made a commitment that Linux would be breakeven at the end of this year, even though we don't report Linux separately this business was breakeven which is a significant milestone."

He said Linux platform products revenue was $US37 million, a rise of six percent. Linux invoicing "was fairly consistent with the last few quarters, but was up 75 percent year-over-year."

Russell said renewal of Linux distribution associated with Microsoft certificates began during the quarter, "and as expected we realised much lower invoicing than the original agreement."

Novell signed a patent-licensing agreement with Microsoft in November 2006, under which the latter had, among other things, agreed to sell certificates for Novell's SUSE Linux to the tune of $US240 million.

"Lower invoicing associated with Microsoft certificates was offset by significant growth in our non-Microsoft invoicing," Russell said.

The company reported that overall net revenues for the quarter had fallen slightly from $US215 million in the first fiscal quarter of 2009 to $US202 million for the current quarter.