Was it an unguarded remark by a Novell executive, or was it an over-eager journalist twisting a quote to get a good story? Whatever the reason, the press and rumour mill went into overdrive with speculation that Novell was about to dump NetWare, the operating system that had made the company what it is today.

The future of NetWare has been a perennial topic ever since it lost its huge lead over Microsoft in the file and print server market. This time round, the nub of the story was this piece of reported speech: “[Novell vice-chairman Chris] Stone said he thought NetWare support would continue for the foreseeable future, even if development does not.”

It wasn’t a death sentence by any means. Stone – as reported -- displayed more concern for user support on older systems than Microsoft tends to (compare the “retirement” of Windows NT), and presented a measured response to the realities of dealing with a declining user base. NetWare is losing market share. IDC puts its share of new server operating system licences somewhere around 12 percent, a figure that falls a few percent each year and, most significantly of all, is now lower than that for Linux.

Novell has begun to invest seriously in Linux. It is porting services to Linux such as the flagship eDirectory (part of Enterprise Linux services launched in June) and the Groupwise collaboration server (port announced this week). The next major release of NetWare, version 7.0, will let users choose between a NetWare kernel and Linux kernel – when it is delivered sometime in 2005. Even the interim release, 6.5, which ships next week, will have an option which bundles NetWare with three other pillars of the open source world. MySQL, Apache, and PHP.

The purchase of Ximian is just the lastest example, and gives Novell access to Linux gurus and very strong Linux desktop technology.

Given all this, what could be more logical than to call a halt to NetWare? By doing so, Novell could focus development on services which can reach an expanding market by running on several Linux versions. Even NetWare users are happy to see it happen. “We see the Linux strategy as a positive,” said Paul Gardner, consultant and chair of the NetWare User Association UK.

Despite this, Novell's response was to put its shields up, in the form of a prepared statement from chief executive Jack Messman: “Novell is not dropping NetWare, we're adding Linux,” said Messman. “NetWare is not going away. Period.” Messman presents the “two-kernels” plan for NetWare 7.0 as a sign of continued commitment.

However, the two kernels plan is what leads observers to think that the writing is on the wall, not for NetWare, but its kernel. When they have a migration path, users will move away from the NetWare kernel.

But not, Novell hopes, from NetWare itself, the services that run on top of the kernel (and will run on Linux in future, if the plan comes off). That’s a distinction that Brian Green, director of Novell Nterprise in the UK, stresses. “People misunderstand what NetWare is. It is a collection of services, running on the NetWare kernel,” he said to TechWorld. “The services will continue, and users will have the option to replace the kernel with Red Hat or SuSE.”

Although the two-kernels world is still two years off, he is definite about how it will work for users: “Novell will be the first point of ownership for support for anything under NetWare, whether users are running it on the NetWare kernel, on SuSE or Red Hat.”

And the long-term support for the NetWare kernel will be stronger than that for any Windows kernel. “We have supported this kernel for fifteen years,” said Green. “We don’t know what the kernel will be for a Windows server in 15 years time.”

Two kernels may be a vote of confidence for NetWare, but it must eventually lead to decline of the kernel – and users will probably welcome that. It will remind many of the way Novell successfully eased users from the native NetWare protocol, IPX to the more universal IP. NetWare version 4.11 added gateway support for IP, version 5 added it as a native protocol, and in version 6, people only use IPX if they have servers running previous versions of NetWare, or older applications.

Those with longer memories may think of a plan Novell hatched in the early 1990s, when it briefely owned (yes, owned) Unix, to merge NetWare and Unix. That house of cards crumbled, and users in discussion forums remember it: “With Novell's history of shifting strategies, I think I'll just take it one day at a time,” said one anonymous user.

But other users are positive. “Microsoft's worst nightmare for Linux servers is single sign-on, integrated distributed peripheral management and a unified administration console from X11 and Win32,” said consultant Jeremiah Cornelius of California in a Slashdot discussion. “Novell brings all of this to the table, with enterprise support.”

“With Ximian, Novell is acquiring people with knowledge to do web services on a Linux platform,” said Gardner. “This makes me more comfortable -- if it comes off.”

The fact is that most NetWare users are not operating Novell-only shops. Gardner’s consultancy work mirrors the general market, he says. “NetWare is there, but the vast majority is Microsoft, and there is increasing use of Linux.”

“This is probably a good thing for Novell, as they no longer have to focus on the entire OS, just their proprietary services,” said another online contributor. Linux could also add broader hardware and peripheral support, allowing Novell to break into new markets by recompiling its source code, and support more devices.

Novell resellers put forward a “melting pot” vision, where Novell’s increasing support of Linux simply adds to the strength of its offering. “It’s all open standards, particularly with Novell’s investments,” said Robin Dunn, of Novell reseller Simply Networking Solutions. “In the longer term, it’s no secret that Chris Stone is a big Linux fan.”

"Novell's dependence on NLMs [NetWare Loadable Modules – an older proprietary interface to NetWare] means that there are only a limited amount of developers in this market,” said Dunn.. “Moving to a Linux kernel will enable support for a greater number of third party applications and developers, putting Novell back on the stage as a major application server. NetWare 6.5, available later this month, already ships with a large number of open source applications including a full J2EE application server.”

So, if an increasing liaison between NetWare and Linux is such a good idea why is Novell downplaying the story? It may be that the IT public still identifies Novell with NetWare and executives don’t want to dent public confidence. It may also be an effort to keep NetWare users happy – even if we haven’t yet found any who are bothered by the prospect.

Another problem may be the revenues. Novell execs have pointed out that the company would be very silly to throw away the $400 million revenue it gets from NetWare – or allow public perceptions to dent that revenue. By letting users replace the kernel, Novell will move from a unique proprietary product, to something which is a collection of services on a general purpose operating system, a model, where it can expect smaller margins and more competition (though NetWare’s heritage will give it a good starting point).

If the Linux flavour takes off, the NetWare flavour will dwindle, but Novell is in no hurry to make this happen. That is why the company is providing a migration path from the NetWare kernel, while saying that NetWare services will go on for ever.