Acquisition Of Tally Shows Where Novell Wants To GoAcquisition Of Tally Shows Where Novell Wants To Go

After taking a few years to find itself, Novell is pounding the path toward becoming a prominent provider of both the Linux operating system and a variety of IT management tools. The company said Wednesday at its BrainShare conference that it's going to buy IT asset-management software maker Tally Systems Corp. in a move to strengthen Novell ZENworks. The acquisition of privately held Tally is expected to close by the middle of next month, although the transaction's terms weren't disclosed.

Novell's moves this week to deliver identity-management, storage-management, and high-availability software to its customers are central to the company's vision of becoming a complete provider of infrastructure and operating-system technology. "Novell sees a need in the market for standards-based enterprise computing, and they've been fleshing out an offering one piece at a time," says Dan Kusnetzky, IDC VP for system software research. "They seem to feel they have the opportunity to be the steward of open-source software for enterprises."

Novell recently introduced ZENworks 7 Linux Management, an attempt to deliver business-class management tools to the open-source operating system. ZENworks 7 marks the first time Novell has taken its Linux management offerings beyond the basic Linux software and patch-management capabilities available through Red Carpet Enterprise, a product it acquired along with Ximian in 2003. By the time ZENworks 7 rolls out in June, Novell expects to be able to provide its customers with access to Tally's TS.Census License Compliance Suite and other products as well.

Novell is making good on a promise chairman and CEO Jack Messman made during the company's February financials announcement. At the time, Messman said his company would use the $536 million cash settlement it received from a November court settlement with Microsoft to build up its cash position for potential acquisitions rather than perform stock buybacks or offer stockholder dividends. Tally would join Ximian and SuSE as high-profile acquisitions since the middle of 2003.

Tally's software has in the past competed with desktop asset-management offerings from Peregrine Systems, Computer Associates, and Intuit .

In January, Tally expanded a partnership with the Business Software Alliance, a Washington, D.C.-based association of software publishers, to deliver Tally's TS.Census License Compliance Suite directly from the alliance's Web site. This was a move to alert businesses to the ethical and digital-security risks associated with unlicensed software use, the company said in a statement. TS.Census License Compliance Suite is designed to give administrators an aggregate view of the software installed on each desktop, allowing those administrators to import purchase records directly from software resellers to automate the implementation and management of an ongoing software-licensing compliance program.

Perhaps Novell's greatest challenge ahead is convincing the market that its blend of open-source and proprietary software is the future of software. "Novell isn't focused on open source to the exclusion of everything [else]," Kusnetzky says. This puts the company in a unique position to compete with both Microsoft and Red Hat, which represent polar opposites on the proprietary and open source software spectrum.