Novell, Red Hat Join IBM’s Strategic Alliance Program

IBM Corp. is strengthening its existing partnerships with the two leading Linux distribution companies, Novell Inc. and Red Hat Inc., the company announced Wednesday. The two vendors have joined the likes of SAP AG and Cisco Systems Inc. as the top ten partners in IBM’s highest level of partnership, its strategic alliance program.

Under the extended relationships, IBM will work more closely with Novell and Red Hat on both Linux and other open-source software. IBM is in the process of building a new dedicated sales channel that will operate worldwide and focus on selling Linux subscriptions from Novell and Red Hat, according to Scott Handy, vice president of worldwide Linux and open source for IBM. This is something that customers have been asking for, he said on a Wednesday conference call. IBM has already hired sales staff in the Americas and will roll out the new channel to Europe and Asia starting Jan. 1, 2006.

“A lot of customers want to buy a Linux subscription in combination with IBM hardware, middleware or a SupportLine agreement,” Handy said. IBM will sell one-year and three-year Linux server subscriptions from Novell and Red Hat together with IBM servers, middleware or SupportLine services products. The services component would support both IBM and non-IBM hardware. “We will have a single point of contact with customers,” he said. “It will make their buying experience easier.”

In its recent Linux efforts, IBM has particularly concentrated on emerging markets in what it dubs the BRICK countries — Brazil, Russia, India, China and South Korea. Through their enhanced partnerships with IBM, Red Hat and Novell should gain more access to those markets, Handy said.

Another element of the closer partnerships is an alignment around open-source software beyond the Linux operating system, according to Handy. “We tapped into the energy and momentum around Linux and then built on top of Linux,” he said. “Now, we see the opportunity to be able to do the same thing with open source beyond Linux.”

Under the terms of the strategic alliance with IBM, Novell will distribute the Apache Geronimo open-source application server as part of its Suse Linux Enterprise Server operating system, Handy said. As for Red Hat, the company has committed to certifying IBM’s version of Geronimo, which is called WebSphere Community Edition (WSCE), for its Linux operating systems as well as supporting IBM in the promotion of the open-source Apache Geronimo application server and the Apache Derby database, he added.

“Six years ago, we made a US$1 billion bet on Linux,” Mark Elliott, general manager, global solution sales, IBM sales and distribution, said on the call. He was referring to the commitment IBM made in 1999 to invest $1 billion in Linux. That was also when the company embarked on its first partnerships with Red Hat and Germany company Suse. Suse was acquired by Novell in January 2004.

Both Elliott and Handy noted a milestone for IBM in the company’s most recent financial quarter. In the third quarter of fiscal 2005, IBM topped $1 billion in revenue from Linux-related sales of software, hardware and services for the first time. This was in part due to the partnerships with Red Hat and Novell, according to Handy. To date, IBM has 12,000 Linux deployments among enterprises worldwide, he added.

IBM continues to take an even-handed approach toward the two Linux players, according to Handy, despite Red Hat outselling Novell. “We have very healthy business relationships with both companies,” he said.

By China Martens – IDG News Service (Boston Bureau)