Novell Acquired: 11 Questions About the 2-Part Deal

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The VAR Guy is on vacation this week. But if he had access to WiFi, The VAR Guy would ask 11 questions about Novell's two-part company sale for $2.2 billion. Attachmate essentially acquires Novell's businesses while a Microsoft-led consortium purchases certain Novell intellectual property assets. How's that for an interesting twist? Hmmm... Here are those 11 questions about the deal.

1. What exactly did Microsoft acquire? - According to the press release, CPTN Holdings LLC, a consortium of technology companies organized by Microsoft, acquired "certain intellectual property assets" of Novell for $450 million. Alas, neither Novell nor Microsoft disclosed details about those assets... raising all types of questions about the deal. Has Microsoft gotten its hands on any key Unix or SUSE Linux assets or patents?

The open source world is running wild with speculation. But The VAR Guy is calling for calm. Keep an eye on SEC filings and the Microsoft rumor boards... eventually Microsoft will reveal specific details about the deal, The VAR Guy believes.

2. Will Novell's Channel Chief Stick Around - The VAR Guy has sent an email to Novell, striving to determine if Novell Channel Chief and Chief Marketing Officer John Dragoon will join Attachmate as part of Attachmate's $2.2 billion buyout of Novell. Over the past two years or so, Dragoon has helped Novell to:
  • Organize itself around a single, company-wide initiate (Identity Workload Management);
  • Reestablish the BrainShare conference;
  • Generate some buzz for the SUSE Linux appliance program; and
  • Reestablish Novell's channel partner program with traditional VARs will engaging newer types of partners like cloud services providers.
The VAR Guy will be curious to learn if Dragoon will join Attachmate.

3. What Happened to VMware? - In recent months there were multiple rumors that VMware would acquire Novell's SUSE Linux business while Attachmate acquired the rest of Novell's assets. Did VMware ever place a bid? Hmmm... The VAR Guy is checking in with his sources. But in the meantime, the growing Novell-VMware virtualization relationship remains in place, according to sources within both companies.

Frankly, Novell and VMware need each other on the partner front -- especially as Red Hat pushes beyond Linux to promote Red Hat Enterprise Virtualization (RHEV), based on KVM (kernel-based virtual machine), an open source hypervisor.

4. How Will ISVs React? - Novell's SUSE Linux team has strong relationships with IBM, SAP and a lengthy list of small-but-growing ISVs like GroundWork Open Source, Ingres and Zmanda. Also, Novell's SUSE Studio development platform has triggered a flood of SUSE Linux software appliances. Attachmate will need to reassure all those developers that the SUSE Studio and SUSE Linux momentum will continue.

5. How Will Major OEM Partners React? - On the hardware front, Novell has critically important relationships with Dell, Hewlett-Packard, IBM and others. IBM, in particular, maintains a Switzerland-like approach in the Linux market, promoting both Red Hat Enterprise Linux and SUSE Linux in order to ensure no single Linux offering becomes dominant. The VAR Guy suspects OEMs will remain loyal to SUSE Linux as long as Attachmate shows partners the proper attention.

6. What's the Bigger Picture? - Novell has positioned itself as the leader in "intelligent workload management" over the past year or so. IWM allows partners and customers to securely manage workloads (i.e., applications, middleware and operating systems) across physical, virtual and cloud environments. Novell's John Dragoon explains the IWM strategy in this FastChat Video from May 2010:



So, will Attachmate continue to bang the drum for IWM? The VAR Guy suspects "yes" but he's digging for more details.

7. Where Does the Cloud Fit In? - Novell in recent months has launched multiple cloud efforts, including the Novell Cloud Security Service. Dale Olds, a distinguished Novell engineer, explains Novell Cloud Security Service in this FastChat Video from August 2010:



The VAR Guy has heard from several major telecom companies and hosting providers that are testing Novell Cloud Security Service. The VAR Guy's best guess: Attachmate will continue to emphasize the new Novell offering as part of a growing cloud computing-related software portfolio.

8. Where Do Legacy Products Fit In? - No doubt, some resellers and IT managers long for the glory days of Novell NetWare and Novell GroupWise. But let's stick with modern-day realities: NetWare's installed base shrinks daily and numerous GroupWise customers are making the leap to hosted Exchange. The VAR Guy doesn't expect NetWare to rise from the ashes. But with some R&D and marketing investment, there could be an opportunity for hosted GroupWise to gain traction with VARs and MSPs.

Let's not forget: Microsoft BPOS (Business Productivity Online Suite), which includes Exchange Online, has hit plenty of bumps in recent months. And Microsoft plans to transition to Office 365 in 2011.

Transitions represent inflection points for partners and customers. Is it wishful thinking to say GroupWise could enjoy a resurgence under Attachmate's ownership? Perhaps. But The VAR Guy will be watching the situation closely. And remember: Some channel partners continue to profit handsomely from GroupWise. A case in point: NovaCoast, a solutions provider, had roughly 1 million GroupWise seats under management as of April 2010.

9. How Will Strategic Consulting Shops React? - Take a close look at Deloitte & Touche and you'll discover that the consulting firm has a thriving Novell-SAP integration business. And for 2010, Deloitte & Touche has been working to become Novell's largest partner in the Identity and Security market. Will big partners like Deloitte continue making Novell-centric bets now that Attachmate is set to acquire Novell? The VAR Guy is checking in with his sources for answers.

10. Where Do Niche Offerings Fit In? - Sure, Novell is best known these days for SUSE Linux. But the company's software portfolio includes a range of niche items -- such as Novell Sentinel Log Manager 1.1. Novell Senior Product Manager Rick Wagner explains Sentinel Log Manager in this recent FastChat interview:



The VAR Guy will be watching to see how Novell's niche products play out within the larger Attachmate strategy.

11. Can Attachmate's CEO Fully Leverage Novell's Assets? - Jeff Hawn, chairman and CEO of Attachmate, offered a prepared statement in the Attachmate-Novell announcement. He stated:
"We are very excited about this transaction as it greatly complements our existing portfolio. Novell has an established record of innovation, impressive technology and brand assets, and a leading ecosystem of partnerships and talented employees. The addition of Novell to our Attachmate and NetIQ businesses will enhance the spectrum of solutions we can offer to customers. We fully support Novell's commitment to its customers and we look forward to continuing to invest for the benefit of Novell's customers and partners."
The statement says Attachmate plans to operate Novell as two business units: Novell and SUSE; and will join them with its other holdings, Attachmate and NetIQ.

Digging for Answers...

Novell expects the Novell-Attachmate deal to be completed sometime in Q1 2011. Sure, Attachmate's strategy for Novell faces plenty of questions. And the open source world wants to know exactly which Novell intellectual property assets Microsoft acquired. But The VAR Guy is, after all, on vacation this week. So some answers will need to wait. Still, stick around. Our resident blogger has reached out to dozens of sources for perspectives. The VAR Guy will surely file a follow-up report... if he ever returns to work.

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Discuss this Video 4

on Nov 24, 2010
Bill: The VAR Guy appreciates your readership but our resident blogger tries not to be the doom-n-gloom type. The VAR Guy is pursuing interviews with a number of Attachmate and Novell executives to get the deeper story. Novell has certainly faced its challenges over the years. But claiming SUSE faces a slows, steady decline seems a bit off base since the SUSE Linux appliance program seems to be attracting more and more ISVs. Still, opinions such as yours remain welcome on The VAR Guy. Healthy debate is what this site is all about. The VAR Guy thanks you for reading. -TVG
John (not verified)
on Nov 25, 2010
What is going to happen with MONO and people around Miguel de Icaza _
Bill Bickel (not verified)
on Nov 23, 2010
Seems similar to other past high tech situations, where some money guys see a bum in the street, pick him up, stick an IV in their arm to get them alert, then stick an IV in the other arm and suck every drop of life out of them, slowly over the next 5-10 years. Collecting the blood/cash for themselves. Look at the assets of Attachmate and it sure looks like this is their game. If any customers had been considering buying any new Novell software, I would assume that is now a lower priority. But interesting intrigue still with "what happens to Suse?", the slow, steady declining, Linux play, tainted with MS cheering it and trying to control it, and "what happens to the IP that MS received in mysterious terms or language?". So this slow, roasting turkey of a company will continue to live on for a while in a few different dimensions. Which is a testament to what it once was, one of the kings of the industry and early pioneers in computing. RIP fellas.
on Nov 28, 2010
John: The VAR Guy will be sure to raise that question this week. Our resident blogger expects to speak with Novell within a couple of days. -TVG
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