New license revenues for key Novell product falls

Novell's first-quarter 2006 revenues from licensing its key Open Enterprise Server (OES) operating system bundle fell 41 percent from the previous quarter, the software maker reported Thursday. Overall revenues also fell compared to the same period a year earlier.

For the quarter that ended Jan. 31, Novell had US$9.9 million in revenue from licensing OES, a bundle comprising its SUSE Linux Enterprise Server with its formerly dominant NetWare operating system. That's down from US$16.8 million in OES licensing revenue in the fourth quarter of 2005. Maintenance and services revenues from OES were US$33.1 million, up from US$29.7 million in the previous quarter.

Novell released OES 1.0 in March 2005, so year-to-year comparisons for OES are difficult to make.

With OES, the company is trying to transition its NetWare users to SUSE Linux by providing them with familiar tools and services on a Linux kernel.

The next version of Open Enterprise Server, formerly code-named Cypress, merges an upcoming version of NetWare with version 10 of SUSE Linux Enterprise Server. It is aimed at attracting Windows users and is expected by the middle of this year.

From all of its products, Novell reported revenue of US$274 million, down from US$290 million in the year-earlier quarter. Net income totaled US$2 million, or zero cents per diluted common share, compared to US$392 million, or 90 cents per diluted common share, for the year-earlier quarter. That quarter in 2005 included a one-time gain of US$448 million from a settlement with Microsoft.

As expected, new NetWare license revenues continued to fall, dropping to US$6.7 million. That's down 68 percent from US$20.8 million in the year-earlier quarter.

One bright spot for the company was its Identity Management software, which saw new license revenues rise 66 percent to US$11.6 million from same period a year ago.

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