Novell deal: The driver's seat is crowded

Most of the details of the $2.2 billion acquisition of Novell have not been released, but some moves seem likely, and others are probably prudent.

Let’s start with what we do know.

Hostile takeover speculation ramped up last spring with an unsolicited bid from an equity group known for preying on and splitting up its acquisitions. Novell appears to have spent subsequent months seeking better opportunities, and there were rumors about VMware and others as possible suitors. Attachmate was mentioned as a prospect, but only as something to pick up the pieces after the more profitable chunks were sold off.

Novell rejected such offers, as its board did not want to sell off individual components, potentially leaving it with an underperforming legacy software mix.

An Attachmate spokesman said after the deal was announced that the firm “will operate a brand portfolio comprising Attachmate, NetIQ, Novell, and SUSE. Our priority is to ‘do no harm’ to the successful standalone operations of all companies as we integrate.”

But the big announcement to the contrary, Attachmate may not be the only guy in the driver’s seat.

CPTN Holdings LLC, a consortium of technology companies assembled by Microsoft, is purchasing nearly 900 Novell patents. The list of patents has not been made public, but it seems safe to assume that the consortium, which apparently formed on Nov. 4, is a Microsoft front formed to keep Novell’s patents and other intellectual property out of competitor’s hands. Microsoft also probably provided some of the cash for the purchase to Attachmate.

The equity venture firm that kicked off this whole process is now on the Attachmate board, and likely contributed to the purchase cash.

So Microsoft appears to be the big winner in all of this strategic acquisition.

A VMware takeover would have been a competitive blow for Microsoft, because VMware would have ended up with Novell’s intellectual property and a software stack that could compete against Microsoft on new levels. Novell and VMware do have a partnership, and VMware has been working to integrate SUSE as its underlying operating system.

But the details of the deal will remain under tight wraps until the ink is dry, i’s dotted and t’s crossed, to avert potential SEC anti-trust investigations. That the close-mouthed tactics also keeps competitors guessing is gravy.

Once the deal does go through, I expect to see several Novell pieces and parts sold off or discontinued. I expect that VMware will end up owning SUSE.

Attachmate has already announced it will operate SUSE and Novell as different companies. Attachmate’s primary business focus is mainframe connectivity and security software. Novell’s IdM and Sentinel products would fit with those offerings.

GroupWise, ZENworks, and other lines will be maintained, but it’s anyone guess for how long, or whether they will be updated. It will also be interesting to see where a more recent Novell acquisition – PlateSpin virtual machine management software – will end up.

The consortium, on the other hand, wants Novell’s integration product patents.

So what does all this mean for you?

In the big picture, you’ll have fewer choices.

Gartner analyst Earl Perkins doesn't see any fast changes in products. His advice to users is simple: “Stay put. This technology has been around a long time, they have a big customer base.”

It should be at least a year before Attachmate begins to do anything to move products, but there will be some shakeups down the road for Novell shops.

Support will still be available for existing Novell products, but when it comes to innovations and keeping up with new trends, the status quo is probably no longer an option – you’re looking at some type of migration to Linux, Microsoft, the cloud, etc.

If you’re an all-Novell shop, the changes could be costly. Some new versions of Windows are not compatible with Novell software, and that will have to be addressed, but the new company will have to maintain backwards compatibility in new products.

Personally, I have worked on Novell systems since about 1987 – when the PC was a new and novel thing. C/D/H has been working with Novell since 1990, and have been partners since 1995, when Novell first introduced industry partnerships. We’ve been a Microsoft partner since the company joined the scene. We are recognized by both companies as premier providers of infrastructure and collaboration solutions, so we can help.

Bottom line: Don’t panic, and don’t succumb to the fear, uncertainty, and doubt that will inevitably churn up. You should start looking at your options now, and learn how strategic the affected product mix is in your environment. Get proactive – talk to us.