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Additional Observations on the Attachmate Acquisition of Novell

By Earl Perkins | November 23, 2010 | 2 Comments

As the details of Attachmate’s acquisition of Novell become available, I wanted to add a few more observations to the discussion.

First, I’m struck by the level and intensity of interest in the acquisition itself. While Novell has been in the industry for many years (founded in 1979!), its revenues and relative size seem out of proportion to the level of speculation and analysis that I’ve seen in the past 24 hours. Of course, being an analyst that has covered Novell for almost a decade, perhaps I’m too close to this. But so are many others, ranging from ISV channel watchers to Linux pundits, from analysts in email/collaboration to systems resource management. As a result, there’s a lot to read today, each from many different perspectives. Finding your way to a broad view of Novell becomes increasingly difficult– we seem to view the company as the sum of its parts rather than a whole. And therein may lie one of the swan songs of the company. While Novell executives were striving to weave these separate stories together into a business view of “intelligent workload management”, it remained difficult to give up the legacy, tactical solution messages that had served them well in the past.

Novell underwent a series of transformations in its lifetime, and in doing so entered many facets of IT through acquisition and development. The company essentially remade itself several times in an attempt to remain relevant to the market. In doing so, it amassed an impressive array of patents across many different IT infrastructure disciplines, in operating systems, security, storage, and networking, to name a few. Of the stories about the acquisition, this one is particularly intriguing. I can understand the goal of Attachmate in acquiring and utilizing mature and established solutions. I can also understand their desire to avail themselves of Novell’s cloud strategy and efforts to grow the systems resource management space. But it’s the patent deal that I find truly interesting.

There is much speculation occurring at present in exactly what is in the 800+ patents that the consortium of companies CPTN Holdings will purchase. Of course, CPTN Holdings didn’t exist before November 2010, so you have to wonder who knew what and when they knew it (baby boomers, do you remember this phrase?). The role of Microsoft in this is becoming more interesting as this sale develops. Time (and SEC filings) will provide a clearer answer. It makes open source and Linux users of all stripes nervous, though, until we know more. It is disconcerting to see the volatility of open source support increasing after the acquisition of Sun Microsystems by Oracle, and now this acquisition. While one tries to remain optimistic, my cynical view of markets tends to prepare for the worst instead of hoping for the best.

In the midst of all of this of course is the identity and access management impact. I see challenges for Quest Software ahead, since they often go head-to-head with Attachmate-NetIQ for Microsoft centric administration customers. I see some relief for the “Big Three” in IAM now, CA, IBM Tivoli, and Oracle, now that a spoiler in many ways may be out for a bit during the ‘absorption’ phase of acquisition. I see advantages for smaller and more nimble players such as Courion, as well as obvious beneficiaries like Microsoft. What will be interesting to see in the days ahead is the impact this has on Novell partners: Verizon in cloud security, VMWare in virtuatization, SAP in IAM, and Deloitte in IAM consulting and system integration. One would expect Attachmate not to shoot the goose that lays golden eggs, but you never know.

And there remains the unspoken question on whether the sales are over.

Other than that, it is pretty quiet going into the holiday period. Remember, there’s till more days left in the year for more acquisition excitement in the IAM industry.

Gartner is preparing an Event note on this topic that will consolidate the analysis of literally dozens of analysts that have covered and do cover Novell and Attachmate as a whole. It should be released within weeks. In the meantime, Novell customers should be calm and not take hasty action. Be prepared to make your feelings known to Attachmate on a variety of topics, not the least of which is ongoing maintenance and support contracts for existing Novell deployments. This was a problem area in the Oracle-Sun acquisition, and it is often a sore point in most acquisitions. Observe the split of Novell among Attachmate divisions carefully to determine the impact on roadmaps you may have that combined Novell solutions in the past. Stay tuned for more speculation and analysis in the days ahead.

And buckle your seatbelts.

Happy Thanksgiving!

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  • idan says:

    One has to wonder which brands will come out of this.
    My hunch is that the Novell brand will live on, as an
    Attachmate property. I would also bet that SuSe will stop being “Novell SuSe” or whatever and just return to the “SuSe” brand.

    Remember when Security Dynamics bought RSA and renamed itself to RSA? I think something similar is likely afoot here.

    Oh well — it can be fun to watch from the sidelines.

  • Hi,

    nice article.
    some additional comments, in French there:
    it’s very interresting to see Courrion as a potencial big IAM – it’s true that the technology seems interresting – but i think this company will be a perfect new acquisition for HP, which wants to develop the Software and Security area. As a BigOne, they don’t have anything in the IAM field.
    I’m convince that the real challenge of the Novell acquisition will be how they will merge the solutions between Novell and Netiq. This could be one the biggest IAM player, in competition with CA, IBM and Oracle – and this could be th ebiggest competitor for Quest Software too ( i think the market NEEDS a Quest Software competitor)

    interresting post.