Novell CEO plots company's return

This month, Novell will begin seeking new customers again

Two decades ago, Novell's network operating system software was almost ubiquitous in the enterprise. Now, its current president wants to restore Novell to a similar level of prominence.

"The Novell Corporation was at one time one of the top IT providers in the world. But sometime in the mid-1990s, it lost its way," admitted Bob Flynn, Novell's president and general manager, in an interview with IDG News Service. Flynn's goal is to have Novell once again perceived as "a high quality, sophisticated technology provider for IT infrastructure."

Novell has kept a fairly low profile since it was purchased by Attachmate two years ago for $2.2 billion. But starting this month, Novell is commencing a vigorous sales campaign to attract new customers.

The road back will not, however, be an easy one for Novell, analysts said.

"Since the Attachmate acquisition, Novell has been asleep at the wheel in several competitive markets," said Hyoun Park, principal analyst at IT research firm Nucleus Research. "Novell will need to focus immediately on modernizing its brand. It needs to start thinking about how social networking, the iPhone, and edge application environments are changing how technology is used."

"The fact is that Novell's traditional focus areas -- collaboration and complex IT management processes -- continue to resonate in today's increasingly complex business environments," said Charles King, of the Pund-IT IT analysis firm, by email. "However, those core processes are evolving radically due to the broad adoption of devices like smart phones and tablets."

Novell made its name, and is best known today, for its NetWare network operating system. NetWare provided a way to link individual computers to a local area network, before that feature came built in with Microsoft Windows. As offices upgraded to computers running the network-ready Windows 95 or newer operating systems, the demand for NetWare faded. The company repositioned itself as offering enterprise infrastructure software, and enjoyed some success with products such as the GroupWise messaging and collaboration suite.

Since being purchased by Attachmate, which made Novell a private company and kept it as a stand-alone subsidiary, Novell has shifted its strategy. "The first thing we needed to do was get our customers settled back in and rebuild their confidence about what Novell was doing," Flynn said. "Before the acquisition, these customers were not receiving a lot of love, so to speak."

To hear Flynn tell it, Novell lost its way as a public company in part because of pressures from investors. It was already struggling to regain the lost momentum when NetWare fell from favor. At its zenith in 1995, Novell's revenues peaked at US$1.63 billion, though by 2010, annual revenue shrank to $811 million.

"Some of the core products -- those that were generating the most amount of revenue and had the largest installed base -- were actually receiving the least amount of attention internally, because they weren't products that could drive up shareholder value," he said.

Flynn didn't mention what these products were, though, in the acquisition, Attachmate, which is a holding company, split the teams managing the Novell NetIQ security management and Suse Linux distribution product brands off as their own stand alone divisions.

And since Attachmate took Novell private, Novell has concentrated on ensuring that existing customers are satisfied with their Novell experience. It also channeled the company's engineering expertise into strengthening its core products, notably the NetWare successor Open Enterprise Server, the Zenworks configuration management software, and GroupWise. "We want to leverage the strength of Novell from a technology standpoint," Flynn said.

Overall, the company will focus on the technology areas it knows best and for which it is best known -- file, networking and print management, collaboration, and endpoint management. "We want to continue to stay within those categories, but we want to modernize those technologies," Flynn said.

The company faces formable competitors, however. Novell's GroupWise, for instance, must compete against IBM Connections, Jive Software's offerings, and Microsoft's Lync, Exchange, Outlook and Yammer. "There are heavy hitters in this space, which are putting a lot of money into strong customer acquisition and customer loyalty efforts," Park said. "Novell has some interesting pieces, but they must play catch up."

Since being purchased by Attachmate, the company has issued 86 product release updates. It unveiled some new and updated technologies at its annual BrainShare users conference in February. There, the company demonstrated a significantly upgraded version of File Reporter, which is software that reports on file usage and security. The newly released version 2 integrates access rights into the reports, drawing user information from Microsoft Active Directory and Novell's own eDirectory.

"We're really expanding the capabilities of what we can report on with this product. Not only can we report on what is being stored and accessed, and how old the files are, but also who has access rights to these particular files," said Buck Gashler, a Novell marketing manager.

Are these efforts enough? Some say the company is still not doing enough in emerging spaces such as mobile and the cloud.

"Overall, I think Novell is on the right track but if it is to survive and thrive, the company needs to successfully transform itself to meet new these challenges," King concluded.

Flynn admits that the company doesn't have the resources yet to pursue all the major trends in the marketplace. The company has been busily expanding its products, such as iPrint, for mobile and BYOD ("bring your own device") usage. But Novell still needs to catch up with the IT industry's shift to cloud computing.

"We are developing what our cloud strategy looks like. I'd like to be further along in my cloud capabilities than we are today, but there was some things I needed to do first. I could innovate without them, but I realize that ultimately we need to get there," Flynn admitted.

Prior to taking the helm at Novell, Flynn oversaw Attachmate, a terminal emulation software business unit of The Attachmate Group. He joined Attachmate in 1998 after spending 17 years at IBM in various management roles.

But because Flynn is a long time Attachmate executive, Park is skeptical that Flynn is a suitable choice for leading Novell back to prominence. "There seems to be a mismatch between a guy who has focused on things like terminal emulation but who now has assets based on cloud, mobile, social. These are all very trendy and require a very modern mindset."

"Bob Flynn might be the right guy, but to effectively sell Novell he must use a very different mindset than what he has traditionally done with Attachmate," Park said.

Despite the challenges, Flynn remains confident in his mission to put the company back on top.

"My task is to rebuild the brand, bring it back up to the level it was before," Flynn said. "That's the direction we're going in, and we'll be pretty relentless about it until we feel we get there."

Joab Jackson covers enterprise software and general technology breaking news for The IDG News Service. Follow Joab on Twitter at @Joab_Jackson. Joab's e-mail address is Joab_Jackson@idg.com

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Joab Jackson

IDG News Service
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