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Novell Acquires SuSE Linux: Page 3 of 4

For Germany-based SuSE, the roughly $35 million company will become a billion-dollar company with a worldwide support and sales staff and a customer base that includes many Global 2000 companies. "It gives SuSE a much bigger channel to sell its products and services," Kusnetzky said.

Novell, on the other hand, has now gone from a company that wasn't on Microsoft's radar to one that will clearly be in the software giant's crosshairs, Kusnetzky said.

"This means Novell is going to have to move from the slow, deliberate engineering-oriented approaches of the past, and move to Internet-speed decision making and a high focus on marketing," Kusnetzky said.

In 2002, Windows' share of new license shipments increased to 55.1 percent from 50.5 percent in the prior year, according to IDC. That latest number, however, is not expected to go much higher because of competition from Linux and its tech cousin Unix. Linux competes with Microsoft on the low-end of the server market, while the latter OS competes in the high end.

Linux's share of new paid license shipments in 2002 increased to 23.1 percent from 22.4 percent in 2001. Unix systems accounted for 11 percent of the 5.7 million total shipments in 2002. Novell Inc.'s NetWare captured 9.9 percent and other products the remaining 1 percent.