CRN Interview: SuSE Linux CEO Richard Seibt and General Manager Holger Dyroff

SuSE Linux CEO Richard Seibt and General Manager, Americas Holger Dyroff sat down with Senior Editor Elizabeth Montalbano at the LinuxWorld Conference and Expo in San Francisco this week to share their thoughts on the SCO controversy, Novell's purchase of Ximian and other hot topics.

CRN: Do you find that customers are holding off on adopting Linux because of the SCO lawsuit?

Seibt: Not that I can see. So far, our customers are still buying. They understand that they are safe buying SuSE Linux Enterprise Software because we have a cross-licensing agreement in place with SCO because of the UnitedLinux joint development effort. On the other hand [SCO hasn't] disclosed ... what part of the code they believe is infected. [Because SCO] hasn't done that, they feel safe. [Customers] know that the court in Germany [based on actions SuSE took] have decided that SCO is not allowed to talk about code being infected until they put the evidence on the table.

CRN: Do you think SCO should do that?

Seibt: It would be perfect if they would do that so we would know what they are talking about. We don't know yet.

CRN: Is there any reason you know of that they haven't disclosed the code?

Seibt: We can start to speculate, but I don't want to do that. At the end of the day, I read the media just as you do, and there's a lot of speculation out there anyway that [SCO has] changed their business model and now they sue companies [and] people. It's something we dislike, but so far it's not hurting the business.

CRN: What do you think of Red Hat's suit asking courts to force SCO to prove its claims and to set up a fund to help customers defray possible legal costs?

Seibt: [It's] perfect. I think it's a very good action and they have copied what we have done in Europe. We went to court together with the Linux Association in Germany and asked the court to decide that SCO is not allowed anymore to tell customers or anybody that there is infected code in Linux. If they still do that, they have to pay a fine for any case. So this is just the same as what Red Hat is doing on their home turf in the United States, and Europe is our home turf. Each of us are taking responsibility.

CRN: Do you think a company like IBM needs to come out and indemnify users against possible legal action?

Seibt: Why should they? I don't believe there is an issue. I don't think there's a need at this time to have this discussion of indemnification.

CRN: Which operating system do you think Linux is replacing more--Unix or Windows?

Seibt: On one hand it's replacing Unix, but if you look at what is happening Europe-- with the city of Munich, for example--in many cases Linux is replacing Windows, or at least slowing its growth significantly.

Dyroff: It's also not just about replacing but it's about putting new [technology] directly on Linux from the beginning. That's what we often see in [new systems using technologies such as] Web services [and] Java application servers. If people put these in their companies, they directly put them on Linux. It's not just about migrating anymore. It's about generating new workloads directly onto the Linux Enterprise Server.

CRN: But is it Unix or Windows that's being used less because of Linux? And will there be a shift in the future toward Linux replacing one or the other? For instance, as Linux on the desktop becomes more prevalent, will it be Windows that's more at risk?

Seibt: I think it's important to understand why this is happening. Look at the Unix operating system vendors. There's Hewlett-Packard, for instance, Sun Solaris and IBM with AIX and SCO. They all face competition from Microsoft Windows. ... If you think each of the named companies has to increase profitability each quarter, then it is logical that they think about what the next steps are. It's my view that the industry has decided there is one main operating system competitor to Microsoft, and that is Linux. Linux means two companies: Red Hat and SuSE, and nobody else. There will be no third distribution that will be supported by the large IT vendors. And from that perspective, even Novell decided not to compete anymore on operating systems. They now migrate all of their applications to Linux. This is a two-horse race between Linux and Windows.

CRN: What do you think of Novell buying Ximian? Does this bode well for Linux adoption on the desktop?

Seibt: I would take this as a fact that Novell is taking Linux very, very seriously, and it's another fact that they are not concerned about any lawsuit. They simply believe that Linux is something that is a huge value for the customer. Think about what CA [Computer Associates] just did. They did a survey with their customers about why customers are deploying Linux. [Customers] named five reasons: performance, reliability, scalability, security and total cost of ownership, which came in fifth. What does this mean? Everybody is talking about total cost of ownership, and no doubt this is very important, because all of us have to reduce IT budgets. But customers named four other reasons. These reasons are strategic reasons why to deploy Linux. ... This is a competitive advantage to Windows because this is not something you can get with [Windows].

CRN: Is Novell's purchase of Ximian going to have a competitive effect on SuSE because of your existing relationship with Ximian?

Seibt: We have a great relationship with Ximian and we work closely together. We will further work closely together with Novell. They have named us first when they did their press announcement about which [Linux] distribution they will support. From that perspective, I think they understand that we are operating system experts and they are NetWare and security and groupware experts on top of the operating system. So we add our abilities [to that relationship].

Dyroff: Ximian has utilities that it brings to Novell, now Novell can bring more resources into that. [Novell] can bring their knowledge of software management, which they have built up for years, into these products, and that will even strengthen our joint offering together with SuSE, Novell and now Novell Ximian Linux services. That's important for us. And one of the next steps is certainly to grow that partnership and bring it to the channel--to all the value-added resellers who have sold Novell for a long time. They are looking for new ways to grow their business again, and this is a compelling offer for the channel. We have a partner program in place, all the pieces are there and together with Novell we are able to bring these pieces together and make a huge push for Linux in the channel now.

CRN: Where historically has your channel seen the most opportunity for Linux, and how do you think that will change in the near future?

Seibt: The channel is very important for us. If we want to become a worldwide global operating system vendor--and this is what our target is--then we need to work with channel partners. Some of them, like IBM Global Services and large systems integrators, if I call that a channel, are calling on the Fortune 1000 companies. If I look at the SMB market, then we work with smaller systems integrators--local ones--and both [large] partners [and small] are very important to us. There are a lot of good reasons for the small-to-medium-size business to deploy Linux and work with a local partner for deployment and for support.

Dyroff: We have several Premier partners already in the United States, especially in the IBM partner space, like Mainline Information Systems or Techno Solutions Group. We have a very strong IBM channel currently around mainframe but also around xSeries, especially around x440 [servers], database solutions, SAP infrastructure solutions, Oracle solutions and such things. ...We also are in the process of growing the channel through the value-added distributors, working with the IBM and HP sides of Avnet and Arrow... in order to scale the channel for us. There are only a certain number of business partners we can take care of ourselves. So value-added distribution is important for us, as a partner for logistics, as a partner for finance and credit kinds of things. [They also are important] in the future as a partner for putting together solutions which then a VAR can either sell to his customers or preinstall our operating system on the hardware, which can easily happen on the value-added distributor level. The IBM channel is relatively strong, and we are starting to grow our HP channel.

CRN: Do you think hardware vendors like HP, IBM and even Sun are investing in Linux because they really believe in it or because they're losing Unix business and need a way to replace it?

Seibt: The people we talk to, they are believing in Linux, they are supporting Linux and they know that, [for example], Sun's customers want to deploy Linux. So that's the reason why they [are partnering] with SuSE and have something which is accepted in the market and not their own solution, which is not certified.

It's more difficult for Sun because they don't have any other business. They have great software but it's not yet available, or they don't charge for it. So from that perspective I think Sun is a very good partner of ours as well.

CRN: Do you think that in order to stay prosperous, you need to have more success with Linux on the desktop?

Seibt: [SuSE] was built upon the server product line, and our success is based upon this technology. Now because the customers experience the value of Linux on the server, we get a lot of demand on the client as well. What we did was, [we thought] why don't we take the same code base and make a client out of this [which is the SuSE Linux Desktop]. ... It is very important because there is a huge customer demand, and we are not talking about five or 10 per customers, we are talking about 10,000 or 100,000, and we are talking about opportunities with 250,000 clients, just to one customer. From that perspective, there is a huge opportunity. If [customers] compare that with what they get from Microsoft, if you know what most customers need--they need Office, they need [Web] browsing and they need the ability to run hosted applications because most of the applications are on the server.

Dyroff: I think it's important for the VARs and systems integrators to inform themselves about the [opportunities for Linux on the] desktop now. ... There might not be revenue in the next one to three months, but we are in the evaluation [period]. The customers will start asking, and you don't want to miss out on that opportunity.

Seibt: If you look at that from a business-partner perspective, they make money more and more on services. But the customers don't have more money, they have less money. So how do [partners] grow their business if the budget of the customer is fixed? Think about the opportunity if the customer doesn't have to pay a license on the desktop. This budget piece can go directly to services, so it is probably the most valuable opportunity for the business partner to invest in open source.