Novell Banks On LinuxNovell Banks On Linux

Novell is no stranger to reinvention attempts. As revenue on its flagship NetWare OS have continued to slide over the years, the Provo, Utah-based software company has embarked on a variety of twists and turns in an effort to stave off decline. They haven't all worked. Novell embraced the Internet, albeit a little late. It bought technology upstart Silverstream to claim its J2EE app server and development environment. It talked about Web services. It also made what chairman and CEO Jack Messman regards as the company's biggest mistake: moving to a direct sales model and relegating channel partners to a fulfillment role.

Messman, who met with VARBusiness earlier this week, says he aims to correct the gaffes of the past with a strategy that hinges on Linux and other open-source technologies and includes aggressive plans to continue reinvigorating the channel through a new territory-based sales structure and demand agent program.

"It's been a rough four years," Messman says. "But we think Linux is where the momentum is now, and it's a product that can be sold by channel partners to make money."

Novell's push is around making Linux palatable to the enterprise by creating order out of the randomness of work being done in the open-source community, Messman says. Central to Novell's Linux strategy is its acquisition of SuSE, a $210 million deal that closed officially on Tuesday. SuSE gives Novell its own distribution of Linux, currently No. 2 to Red Hat in a two-horse race in the Linux OS market. Novell says the SuSE technology will serve as the foundation to a complete Novell technology stack, one that is integrated from the platform layer up to higher-end offerings around identity management and collaboration. This week, Novell released new versions of its eXtend application development and deployment environment and version 2 of its identity management server, nSure.

Looking ahead, Novell says it also plans to develop a Linux-based desktop product. The desktop version will be based on SuSE technology as well as open-source software gained in Novell's acquisition of Ximian last year. Ximian brings to the table a potentially ingenious piece of software called Mono that enables applications developed on Microsoft's .Net platform to run on Linux -- no trivial thing since the key to Linux getting a foothold on the desktop lies in the availability of applications. Novell's development team is also working to compile the "best" open-source components for such things as text editing or Web browsing and embed them into their desktop platform.

On the channel side, SuSE has approximately 100 partners, mostly in Europe, that Novell is targeting. Officials said the two companies' partner programs are similar in structure, and their goal is to integrate the two by Novell's Brainshare conference in March. In addition, Novell is busy bringing its own stable of Platinum and Gold partners up to speed on Linux, with training sessions on the Web and in-person going on throughout North America.

The big message partners will hear is that Linux in the enterprise is all about selling services and support, and solving specific business problems.

"We aspire to use Linux more effectively than anyone else, and to do so we have to be channel-friendly," says Deb Bergevine, chief marketing officer at Novell.

Novell is also taking no chances when it comes to the ongoing legal imbroglio involving SCO's intellectual property claims to the Unix source code on which Linux is partially based. The company announced this week an indemnification program for qualifying customers of SuSE Linux Enterprise Server in which Novell will bear the costs of any legal action taken against a customer by SCO for using Linux.

Whether the strategy will pay off remains to be seen, given Novell's recent track record. But Messman says he is intent on evolving Novell's culture from an inwardly focused engineering-happy company to one that only builds products and solutions that customers want. It has culled its product lineup from 161 pieces of software down to 64 and plans to step up its ISV relationships to go-to-market with industry-oriented solutions, much like IBM. It isn't abandoning NetWare, either, of course. The technology stack will run on NetWare as well as Linux and other operating systems, just as it will interoperate with any relational database or application server.

"The issue we have is to either maximize the value of our current products or just go all Linux," Messman says. "Instead, it will be a transition, as we have cash flow coming in from both Linux and the legacy stuff."