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Yesterday’s news that Novell is in talks to sell its operations to a couple of different companies came as no surprise, following an announcement earlier this year that a hedge fund had made an unsolicited bid for the company. While Novell did not sell at that time, it left the door open to any future offers for the company.
Novell is a quite solvent company with projected 2010 revenues somewhere slightly north of $800 million and profit that should be about $70-75 million for the year. The company’s market capitalization is in excess of $2 billion, it has lots of cash in the bank, and it has some great technology in GroupWise, Pulse, etc.
GroupWise, Novell’s flagship messaging system, is a solid platform and is used by about 30 million people worldwide. Admins rave about its ease of management, the lack of admin time required to keep it up and running, and the very large number of users that can be supported by a single IT staff member. Novell’s recently introduced Pulse offering includes a number of useful collaboration features, including instant messaging functionality, social networking capabilities and real time group document editing.
Unfortunately for Novell, GroupWise is perceived to be in use by a dwindling number of companies, although market numbers indicate that GroupWise is generally holding its own. However, its competitors are investing huge amounts in their respective platforms, making it difficult for Novell to maintain market share against a variety of much larger and better-funded companies; as well as an up-and-coming group of smaller competitors. Novell’s integration with third party offerings is perceived by many not to be as robust as it should be. Plus, there are few hosted GroupWise providers, although a major new entrant to the market has informally announced that it will be providing a hosted GroupWise offering in the near future.
What about the future of GroupWise, Pulse and other messaging- and collaboration-related technologies owned by Novell (the focus of Osterman Research’s work)? I believe they will be purchased by VMware (rumored to be a suitor of Novell according to an article in today’s Wall Street Journal), HP or Apple. I’m particularly intrigued by an Apple acquisition of the messaging assets of Novell, given that Apple has never really done much in this space and the company is one of the largest software vendors (yes, Apple is arguably primarily a software company) not to have a credible messaging and collaboration strategy for either the SMB or enterprise markets.
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