The Attachmate Group this week finalized its $2.2 billion buyout of network industry pioneer Novell, which begins the next phase of its evolution. Attachmate will operate Novell as two separate business units, one focused on the Novell brand and the other on the SUSE Linux brand. In addition, the privately held Attachmate Group has business units focused on the Attachmate and NetIQ brands. IDG Enterprise's Chief Content Officer John Gallant spoke with Attachmate Chairman and CEO Jeff Hawn shortly after the Novell deal was sealed to get his thoughts on what the acquisition means for Attachmate and its new and old customers.
Why does buying Novell make sense for Attachmate?
One reason is that with our existing Attachmate unit and NetIQ unit, we share in many of the same customers. So there's a high degree of overlap with the customer base and little or no overlap with the products and solutions that we offer. But we now have more to offer them. Number two, the pattern recognition here in terms of what we've acquired with Novell, we've got a mix of very mature technologies and mature markets, along with emerging high-growth technology offerings as well, e.g., SUSE Linux, the virtualization management, data center management and the like. That is consistent with what we think we've done well at Attachmate and NetIQ where we also have a mix of very mature technologies and those that are more in the emerging category. We think, and our customers have told us, that we do a pretty good job of managing across that broad spectrum of mature technologies that are well established and anchored in the customers' environments to those that are emerging. So here's an opportunity to kind of do that again.
MERGERS: Top tech M&A deals of 2011
Tell me a little bit about the organizational structure. Why keep four separate units?
Within the Attachmate Group, what you will hear about and what customers will know us as is as the Attachmate unit, the NetIQ unit, the Novell unit and the SUSE Linux unit. From an organization standpoint, that makes for a clean line of sight from the customer back through our sales and services, and all the way back to product development. That gives each of our four units the ability to keep focused on specific customer needs in their specific markets. If you look back, those are four really great brands. Attachmate and Novell have been around since the '80s. NetIQ and SUSE have been around since the '90s. I really wanted to make sure that customers would see those brands in the most prominent way possible.
Tell me how this changes the competitive landscape. Who does this put you up against?
It's many of the same in kind of our existing markets. It gives us more to offer, for instance, in and around the identity and access management markets of security. The exception is with our SUSE Linux unit, where we are now competing with Red Hat, and we intend to focus on those opportunities and compete very hard. As it relates to the other players, the Microsofts of the world, the Symantecs and the like, we've already been competing with them. We now have a much stronger position with which to compete.
From a customer perspective, if you're talking to a CIO or one of the top IT titles, what is it you want them to understand about Attachmate? What's the overall vision you want them to get?
Great products, great support, easy to do business with. And the point there is I do not have the complexity of also having to spend half my time crafting a story for Wall Street, and getting people excited about a vision. I can focus exclusively on taking care of that install base, and whether that's new licenses into existing customers, whether that's maintenance renewals, whether those are service offerings. You know, the types of things that are very important to customers and not always viewed in the same positive light by a Wall Street sell-side analyst who is trying to figure out where the penny per share of growth is going to come from. So our point to customers is we're focused on your needs, we're pragmatic about what we're working on. I just need to get customers excited. We've got an install base that is plus or minus about 65,000 - that's 65,000 of the largest commercial and governmental enterprises around the world. They already know us and we know them.
What are the next steps? What do you have to do in terms of product integration, in terms of marketing and visibility for the company, in terms of getting people to understand how this is all coming together?
Number one, things are made simpler by the fact that there's not overlap with the products and solutions. We're not going to have any "end-of-life decisions" to make. What we've already communicated is that the product road maps and commitment to the existing solutions remains intact. And I'll go beyond that. We're going to strengthen what that means as it relates to support and as it relates to carrying forward the road map. Number two, because it's the customers that we know in many of the cases already, we're able to communicate with them more efficiently than we would be otherwise. So it's really about widening that communication line into those customers and helping them understand what we're offering across the four units. All that sums up to: this was an important deal, a milestone for us. And quite candidly, for the industry, in that these are four really strong brands. The challenge now is operating those four units to maximize their performance. That means taking care of the customers and taking care of our employees. You take care of those two constituencies and you tend to get results that you like.
For more discussions with top IT executives, dive into our IDG Enterprise CEO Interview Series archives.
Read more about software in Network World's Software section.