SuSE cuts US staff to focus on Europe

SuSE is hoping to raise its European presence by working through the channel, the company revealed last week.

SuSE is hoping to raise its European presence by working through the channel, the company revealed last week.

The Linux distributor, which has admitted flotation ambitions, cut its US workforce by 30 last week in an effort to improve efficiency and reduce costs, leaving a skeleton staff of only 15.

SuSE is instead focusing on the European market and will launch a dedicated reseller programme next week.

Jasmin Ul-Haque, commercial director at SuSE, said that while the reseller scheme will not be formally announced until 22 February, the company believed that long-term growth and profitability will require the introduction of a channel strategy.

"SuSE is not ready to talk directly to resellers, but I can confirm that the company will be investing in a channel scheme to involve them in software offerings, installations and service opportunities," she said.

Ul-Haque confirmed that the company's actions in the US were financially motivated because it is seeking an initial public offering (IPO). "SuSE will be more profitable under its new structure because we found the US market very fragmented, and it has a number of well established Open Source operating systems already available," she said.

However, Ul-Haque said that despite the job cuts, SuSE remained fully committed to the US market and its existing US customers.

A survey conducted in the US by analyst Reality Research and Consulting claimed that, while interest in Linux is growing, not enough customers are committing to an actual sale. While half of all educational institutes work with Linux-based systems, less than one-third of business and government organisations have invested in the software.

Sandy Fitzpatrick, senior analyst at Canalys.com, said SuSE would face an uphill battle to re-establish itself in Europe after its US cutbacks.

"SuSE needs to be profitable to convince the City that it is worthy of an IPO, and it has to explore every possible revenue stream," he said. "Tapping into the channel is a good way to do that, but it has to offer enough service opportunities to attract resellers."

Separately, SuSE will launch version 7.1 of its Linux operating system on 22 February.