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August 16, 2005

Novell signs Linux development agreement for China

Novell Inc is strengthening its presence in China with a new joint development agreement with the China Standard Software Co Ltd to develop new server and desktop Linux offerings for the Chinese market.

By CBR Staff Writer

The development agreement builds on a memorandum of understanding struck in April between Waltham, Massachusetts-based Novell and the Chinese government-backed CS2C to provide Linux technology, services, and marketing specifically targeted at the Chinese market.

The new agreement sees the two companies co-operating to make use of Novell’s R&D and support services and CS2C’s local experience and market presence to test and deliver new Linux server and desktop products.

CS2C was set up in October 2003 to deliver the standard Linux-based desktop system for China. In November 2003 it signed up to Sun Microsystems Inc’s Java Desktop System – a product based on Novell’s SUSE Linux – to form the foundation of a national desktop software standard.

The deal will strengthen the presence of Novell in China where the company already has the largest Linux server operating system market share, according to recent figures from International Data Corp.

The research firm’s China Linux Market Analysis for the first half of 2005 gave Novell 32.9% market share by revenue and 30% by unit shipments, indicating that its aggressive strategy to grow business in China has been successful.

In September 2004, Novell joined the China Linux Standard Group, a Chinese government-backed Linux standards group to help standardize Chinese Linux developments and promote Linux adoption, and has formed partnerships with CS2C, Huawei, AsiaInfo, and Skybility in the last year.

While Novell might have built up an early lead according to IDC, it still faces tough competition in the rapidly emerging Chinese market. Red Hat Inc opened a Beijing office in September 2004, while acquisitive Mandriva SA has noted the rapid uptake of Linux in the country.

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Western Linux distributors also face fierce local competition from the likes of Red Flag Software Co Ltd, which has produced the Asianux distribution in partnership with Japan’s Miracle Linux Corp, as well as Sun Wah Linux Ltd, which last week launched the first Debian-based Linux server distribution in Asia, and also has a joint development agreement VA Linux Systems Japan KK.

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