10.25.07
UBS’s Abhey Lamba Gets it Wrong on Novell
Novell is a coupons lifeline
A week or so ago I had a discussion about analysts (particularly their hidden motives and lack of understanding). Let’s set aside technical understanding, which the MBAs of the 90s no longer think they should have. That understanding can also be ascribed to business models, which evolve endlessly.
“Free software is distributed, not sold.”My father agreed with me and since he’s in finance and investments he should probably know. Analysts are rarely worth listening to. Let’s face the fact that many of the figures and a lot of the analysis is being sold or served to fit an hypothesis and data is intended to be incomplete and therefore biased. Particularly, where Free software is concerned, the conventional rules of economics are broken. I have had arguments with analysts over the fact that Linux adoption, for example, cannot be measured using sales as a criterion. Free software is distributed, not sold. It can be sold, sometimes. But that escapes the big picture.
Last month UBS unleashed some ‘findings’ that were not favourable to Linux and many other analysts, who actually understand the rules of this game, rebutted fiercely. So here we have another finding which can be considered misinformed. It is based on the following observation.
UBS analyst Abhey Lamba this morning picked up coverage of Novell (NOVL) with a Neutral rating. “Novell’s business is in a state of transition, as the company’s legacy business is declining, and its new ventures, like the Linux business, have yet to gain meaningful traction,” Lamba writes.
They seem to be completely missing the point that we made back in September when the press merely parroted Novell PR. Novell is fooling the world with figures that are inflated by coupons that will not last. Surely, many analysts are unaware of this. They are unlikely to take this into consideration when plotting their graphs.
Image from Wikimedia
Highlight: Novell was the first to acknowledge that Microsoft FUD tactics had substance. Novell then used anti-Linux FUD to market itself. 
Highlight: Xandros let Microsoft make patent claims and brag about (paid-for) OOXML support. 
Highlight: Linspire's CEO not only fell into Microsoft arms, but he also assisted the company's attack on GNU/Linux. 
Highlight: Microsoft craves pseudo (proprietary) standards and gets its way using proxies and influence which it buys. 
Highlight: The invasion into the open source world is intended to leave Linux companies neglected, due to financial incentives from Microsoft. 
Analysis: Xen, an open source hypervisor, possibly fell victim to Microsoft's aggressive (and stealthy) acquisition-by-proxy strategy.