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The purchase ofwill complement Novell's efforts to sell tools for managing networks of Linux servers, the company said. Novell plans to create a business unit called Novell Ximian Services.
Executives from the two companies said the union will help drive adoption of the Linux operating system in corporations.
"Ximian brings Novell unparalleled Linux expertise," Novell CEO Jack Messman said in a statement.
Novell pledged to continue fostering two high-profile, open-source efforts under the auspices of Boston-based Ximian, including the GNOME project for creating a Linux desktop and the Mono project, which will allow companies to run Microsoft .Net applications on Linux.
The deal could also rekindle decades-old battles between Novell and Microsoft, said Chad Robinson, an analyst at the Robert Frances Group. Ximian's Desktop software is one of the most popular Linux application bundles, and Novell has the resources to sell it into corporations where Microsoft's Office software dominates on PCs, he said.
"Many companies have looked to take on Microsoft from different angles but they've usually fought Microsoft on the server level," said Robinson.
Microsoft executives haveas one of the company's primary competitive challenges in the coming years.
With the Ximian purchase, Novell could mount a "a huge challenge to Microsoft on the desktop," said Robinson.
The company has tried to confront Microsoft's desktop application dominance in the past. During the 1980s and 1990s, Novell launched its own line of e-mail and personal productivity applications, but failed to loosen Microsoft's hammerlock on the industry.
Now, Novell's revenue stems primarily from its server software. But sales of its flagship NetWare operating system have stalled over the past years, largely due to the popularity of Microsoft's Windows. The company latelyin an effort to cash in on corporate interest in the open-source operating system.
The acquisition of a high-profile Linux provider should raise Novell's profile in the industry, Robinson said.
"Between Novell's enterprise Linux strategy and the Ximian acquisition, they're trying to reclaim the spotlight," said Robinson. "Linux is clearly a strategic play for Novell."
Novell has developed a series of administration and security tools for managing Linux networks. In about 18 months, it plans to offer on Linux the same networking services it offers with NetWare, including directory software for authenticating a person's identity, according to the company.
The company's backing should bolster the, an ongoing effort to create an open-source version of Microsoft's .Net development software. Once the project is completed, developers using open-source Mono tools should be able to create .Net applications that run on Linux or Unix. Ximian plans to release the first full version of Mono by the end of the year.
Applications built using Microsoft's Visual Studio .Net development tools are designed to run only on the company's Windows operating system.
Ximian also provides a suite of tools for running desktop applications, such as e-mail and calendars, on PCs that use Linux. Ximian's Desktop 2 product allows people to share documents saved in the Microsoft Windows file format.
The company has developed Red Carpet, a popular utility for automatically updating different versions of Linux on PCs.
Over time, the two companies plan to combine Red Carpet with Novell's ZenWorks product line, which can send out software updates to Windows-based desktop PCs.
As part of the deal, Novell said it will continue supporting the open-source development projects sponsored by Ximian.
Ximian grew out of the GNOME project, which was started in 1997 by Ximian co-founder and chief technology officer Miguel de Icaza. Ximian Desktop is based on GNOME, an application that gives Linux PCs graphical presentation tools.