Novell Rides Off Into The Sunset

The curtain comes down for yet another 80’s era pioneer. Novell is finally throwing in the hat (not a Red Hat mind you) and selling itself off to Attachmate for the ungodly sum of US$2.2B. There are a couple of interesting questions about this acquisition but first a moment of silence for an historic old ship that has run up on the shoals of competition. At one point they were as hot as Google. But like Sun and other companies of my youth they didn’t keep up and will soon be no more.

Why sell now? Because Novell is obviously not going anywhere. At one time they had the number two PC server operating system, have the number two server Linux and generally were number two in a many things. You can’t be number two without eventually ending up on someone’s shoe. So, if someone offers you enough money to float a missile cruiser, you take it. That’s being responsible. Or maybe the rent’s too damn high. (Caution: Sound is too damn high in this web site).

Why US$2.2B? Got me. I mean that’s not that much of a premium over Novell’s market cap but it’s a lot of money for a company that is a shade of its former self. Part of why that number is so high is because Microsoft (through CPTN Holdings LLC) dropped US$450M into the pot. They have a lot of cash. For them, this is like buying a pack of gum. Still, I have a hard time seeing this pay off for Attachmate. Unless it’s not about paying off for Attachmate per se. (I love foreshadowing…)

Who? Attachmate? I know what you mean. Who the heck are these guys that they can go out and buy Novell. That’s like Meritline (a purveyor of cheap Chinese electronics) buying Best Buy. Seems backwards. Attachmate has a product portfolio that looks like a hodgepodge of data center management products. The deal makes sense from a product point of view in that Novell has their own hodgepodge of data center tools and technology. So, depending on what stays with Attachmate and what goes to Microsoft, you will have a company with a huge collection of somewhat related technology. Combine them into certain combinations and you have a bunch of companies. The funny thing is that Attachmate is nearly as old as Novell but you don’t think of them like Novell. I’m not sure if that’s good or bad.

Attachmate is owned by a group of private equity groups. That, plus it’s product portfolio mélange, makes it look like a rollup. Rollups keep going by rolling up more companies and selling them off in combinations. It’s like cooking – a little of this, and a little of that, a pinch of something else and Voila! you have a dish you can sell to investors. That might be where the pay off is.

Why should we care? Really we shouldn’t but we do. Whenever a company with a history like Novell’s gets absorbed and turns into little more than a brand it’s sad. We really should if something bad happens next like SUSE Linux goes away, reducing competition in the Linux market. But really, I doubt that will happen and if it does there’s still OpenSuse, right? If you’re a Novell customer of course you care. You don’t know what these guys at Attachmate (or Microsoft) might do and that has to mess with your head. Otherwise, it’s not a game changing acquisition.

So, what does happen next? My guess is that they package up SUSE Linux with some other stuff and spin it off to investors or another company.  If I’m the folks in Redmond I want the identity management IP. That would go along way to creating online services and backend software for trusted Internet environments. Attachmate absorbs the rest and moves on its merry way. Depending what it gets for the other pieces of Novell (like SUSE Linux and ZenWorks) and what it can combine with its own products and sell off, it might make money on this. This is not about product engineering. It’s about financial engineering. And in this type of financial engineering one plus one can equal three.

I wave my hat to Novell as it rides off into the sunset. We’ll miss you amigo.

What! No Virtual Booth Models?

I’m “at” the Comdex Virtual event right now. It’s an unusual experience. This is not the first time I’ve participated in virtual trade shows as both an attendee and a speaker. It’s been awhile though and the experience is a bit different than it was in the past. It’s much more elaborate, more like a real conference. Unfortunately, some things are the same such as jumpy video.

I get virtual trade shows. Let’s face it, for a lot of attendees big trade shows are boondoggles. Expensive boondoggles. You have to pay to travel, pay for hotels and meals, and pay for the show. A lot of IT managers used to justify trade shows as part of employee education. That was true for some people but a lot of folks got too little “education” out of these industry confabs. Instead they got a lot of swag (the stuff they give away at booths). Marketing people even have a term for these folks. We call them trick-or-treaters. Besides junk to fill up their cubicles all that most attendees got were vendor pitches masquerading as seminars. Not a good use of limited budget dollars.

From the vendor point of view, you spend a big chunk of your marketing budget on booths and travel and came back with few qualified leads. Instead of customers with money, you waste your time on trick-or-treaters and folks too low on the totem pole to have any influence on spending. Trade shows in general have two business goals. First, spreading the word i.e. marketing. Branding, education, PR, positioning, and messaging are key activities at trade shows. In this regard, trade shows are generally successful. The press is at these events and people have little else to do but listen to your message. Unless the show is in Las Vegas. Then all bets are off. Get it? Bets? Okay we’ll move on.

The second big goal of trade shows, from a vendor perspective, is lead generation. No matter how you look at it, there are better ways to generate leads. Again, you have to pull some of your marketing and sales team out of the field so they can sift through lots of the trick-or-treater types to get a few decent leads. It’s not very efficient. To get anyone to talk to you at all, you have to sink a boatload of money into flashy booths, presentations, entertainment (magicians, comedians, etc.) and other diversions to cut through the white noise of the expo floor. That’s just to swipe the badge of someone unlikely to buy anything in the first place.

Virtual trade shows are intriguing because they are cheap for everyone. No flashy booths or expensive travel for vendors. For attendees it has the advantage of  allowing you to do other things while “attending” (like your job) and it doesn’t take a big divot out of your budget. I can see it for education and messaging. I still don’t see it for lead generation.

I’m fascinated by how much effort has gone into making Comdex Virtual mimic the experience of a real trade show. There are keynotes, breakout sessions, virtual booths and a lobby with flashing advertisements. There’s even hospitality suites that you’re not allowed into without an invite. You get to feel the same pang of of disappointment you would experience walking past a real hospitality suite that you’re not invited into. Ah, the memories.

Despite advances in show design there are still a bunch of annoying quirks. Video is jumpy and makes every speaker sound like Max Headroom. If Hulu and YouTube could figure this out you’d think Comdex Virtual could. The slides for the keynote don’t change. It’s probably a stupid technical problem but it effects the experience. Some of the virtual booths have tiny PowerPoint presentations running. It’s like business for Smurfs. And just like Smurf signs you can’t read the slides. Folks like Microsoft and EMC figured that out and had video presentations. You can hear just fine no matter how tiny the talking head is.

What Comdex Virtual can’t reproduce is, for me, the most important aspect of a real show – running into people I know. A lot of business gets done when you happen upon colleagues and old friends. They try to do this with the VAR Bar - group chat room - but it doesn’t work. It is overpopulated with vendors and the text scrolls so fast that you can’t really see anything interesting. It is tough to search for someone you know (the virtual equivalent of scanning the room) because the application had the annoying habit of suddenly jumping to the top of the list. Besides, looking around a physical room is much faster than scrolling through more than 200 names and icons.

Comdex Virtual goes a long way to making virtual trade shows more enjoyable and interesting. The structure of the event, made to appear like a live event, provides familiar context. It is certainly easier on the budget. Still, it doesn’t allow for one of the most crucial parts of a trade event – human contact.

At least the food is better than it was at live Comdex. And I don’t have to wait for a cab back to my hotel. That’s something the original event could never deliver on.