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.

vFlowers for Ferelli

Today I heard that long time technology journalist Mark Ferelli had passed away. I have known Mark for a long time (if 14 years is considered a long time) and always liked him. We didn’t always agree about technology but then again that doesn’t really matter. What matters is what type of person you are and on that we could agree. Mark was a great guy. When people leave us suddenly it often helps to tell those very personal stories that helps you remember what the person was like. So this is my “Mark” story.

At the time I met Mark I had just started to write publically. Public writing, such as articles, blogs, and books is different from private writing such as corporate white papers or datasheets. This type of writing has your name on it. People know that you do it and will draw conclusions about you from what you write. In other words, it’s scary as hell, especially in the beginning. That’s when you need encouragement and that’s what Mark gave me. He was that kind of guy.

He had seen something I wrote and thought it wasn’t horrible I guess. I think that because he told me to keep writing. He always found space in CTR for my articles and I doubt it was for a lack of material. Unlike a lot of editors I’ve worked with, he could give solid constructive feedback without making you feel like someone had just dropped an anvil on your head. He was that kind of guy.

When I wrote my book he was one of the outside editors. I found this type of writing incredibly stressful. You put a lot of effort into it and the editors tear it to shreds. They have to tear it apart if you want a good book but it’s not fun. So, when I got Mark’s feedback I dreaded looking at it. No need for dread. His comments were on target but gentle. I found myself nodding and saying to myself “Yeah. That makes sense. I should do that.” instead of having my blood pressure go through the roof. He was that kind of guy.

So if you didn’t have the pleasure of knowing or working with Mark, that’s too bad. You missed something. And now the whole industry will be missing one of the better people in it. Interestingly enough, it was computer technology that spread the word of Mark’s death. I heard it on Twitter of all places. I think Mark would have had a giggle about that. He was that kind of guy.

So Mark, here’s some virtual flowers for you from someone you encouraged along the way.

HP and Cisco Square Off

I love a good dust up in the computer industry. The latest WWF style bout comes to us courtesy of HP and Cisco. In one corner of the ring is Cisco who won't be renewing a system integrator contract with HP. In the other corner is HP who plans to bail from the Cisco Certified Channel and Global Service Alliance Partner programs.

Two giants of the industry beating on each other is so much better than David and Goliath match ups. Those make us feel sorry for the little guy and angry at the mean old big company beating down on the poor entrepreneur who's just trying to make the world a better place.

These bare knuckle brawls are both good and bad for the industry. First, it brings to light the farcical nature of big company alliances. Let's face it, they are marriages of convenience. These folks really want to be on top and there can only be one top dog. It's good that they occasionally remind us not to get too vested in them.

Competition is also good. It drives down prices and ratchets up innovation. When things get too cozy, the industry tends to stagnate. We need another round of wow! inducing products at woo hoo! low prices about now.

It is bad though for those caught in the wake of these two battleships as they try to sink each other. In this case, the indirect channel partners of both companies could become collateral damage. It may well become more difficult to integrate products from both companies and channel partner customers are not likely to want to pay extra for that added effort. It's not their problem that HP and Cisco went from lovers to bitter rivals practically overnight. There will be costs that someone has to absorb and the channel looks like the dry sponge here. Hopefully a hardware price war will ensue that give a little more margin to channel service providers.

This move is just one act in an ongoing drama in the computer industry. Over the past ten years we have seen the growth of the full service, full product line computer company. There are now only half a dozen (if that) companies that sell solutions to customers and they want to sell whole solutions. Servers, networking, storage, software, the whole system plus services. This is what is behind the Cisco Unified Computing initiative and HP's acquisition strategy. Everyone is trying to be IBM. Even software companies are getting into the act. Just look at Oracle and their purchase of Sun and other investments in hardware. It will get harder and harder for independent hardware companies to continue to exist unless they are making OEM equipment for one of the big, full service companies. A few will survive to provide niche products whose revenue stream is too small for the big guns to care about. A few others will get by on overservicing specialty markets. It's like grocery shopping. Most everyone buys from a big supermarket. Sure, you occasionally go out to the specialty market or “all local foods” shop but that's not for everyday purchases.

Next up: Exclusive channel partner programs. Want to sell our stuff? Then you can't sell anyone else's stuff. It's been done in the past and will likely happen again.

Fatal Attraction from Cisco

Finally, Cisco announced what had been about the worst kept secret in the tech industry – that they would be making servers. They put a wrapper around it that they called the Unified Computing System which packages together everything you want in your data center and uses virtualization to make it “simple” (their word not mine). The name is not very imaginative (how many Unified somethings do we have any way) but at least it describes their ambition.

Thirty seconds after the announcement, both the Cisco haters and Cisco apologists launched their offensives into the skies of the blogsphere and the beaches of the social networks. Cisco's own press release sounded down right militaristic claiming “Cisco Unleashes the Power of Virtualization with Industry's First Unified Computing System”. You can still smell the burning wiring from the initial volleys.

The issue at stake is whether this is just a thinly veiled blade server launch (big snore everyone) or a radical new way to approach computing. As is always the case, the truth is somewhere in between. Still, I'm leaning to the YABS (yet another blade server) side of the argument. There is little that Cisco is offering that others have not offered before. By others I mean every major IT equipment company. We used to call it end-to-end solutions but I guess everyone will say Unified something or other from now on. I'm waiting for the Unified Unity of the Universe of Computing before I build my next data center. I want it to do everything I have yet to dream of including wash my car.

I'm not against Cisco by the way. I like their network equipment, a lot of nice people work there, and they help fund my son's Cisco networking class in high school. Okay the last one is probably a bit self serving on their part. I have no doubt they are helping to create the next generation of Cisco apologist zombies but the kid likes it so who am to complain.

What I am willing to rail against is monoculture. Buying everything from one company opens you up to a world of pain. Monoculture is like a jealous lover. It demand undying loyalty and only gives to you what it wants you to have when it thinks you deserve it. Given enough time, monoculture turns into Fatal Attraction.

It starts innocently enough. “ Baby, don't you want only one place to go to for support? I know you do.” And “I can give you everything you want and it will all work together. You don't need those other systems.” And of course “ Honey, I can make it so easy for you, so easy.” Then, it turns ugly. Want that new feature that the other companies already have? Sorry. You'll get it when your lover wants you to have it. Found a rather disturbing flaw? It's might be everywhere. Thinking of leaving? Well don't. With it's claws in you this deep, the pain won't be worth it. Instead, you will continue to take the abuse until, one day, your monoculture system company decides it will leave you. They don't call it End of Life for nothing.

I won't beat on Cisco for making this move. It's kind of gutsy in a recession. I won't embrace it either. Buying a unified anything has enormous risks. Buying a unified data center is asking for trouble.

If Cisco wants to slug it out in the server wars against its own partners, that's their business. Don't know if it's smart but I don't care. They have money to throw at initiatives like this and the storage switch play worked. Just don't expect me to invite it to my house where it can kill my pets.