In Midst of Novell Merger, The Last Days of NetWare?

As Novell and Attachmate continue to perform the ritual mating dance of corporate acquisition, Linux and open source community members are holding their breath, waiting to see what will happen to the SUSE Linux and openSUSE product lines.

In the midst of this, one question seems to be missing: What will happen to NetWare?

To get an idea of where NetWare might be going, it would be a good idea of finding out where the status of the old NetWare product line, now known as Novell’s Open Enterprise Server (OES).

OES, introduced in 2003, is the successor to NetWare, in that it performs all of the same collaborative and network functions that NetWare used to. Instead of these functions working in the operating system layer, however, OES’ functions are performed in the application layer, wrapped around either a SUSE Linux or NetWare kernel. The idea was to make it easy for legacy NetWare users to migrate to OES with a NetWare-kernel version, then ease them into OES with a Linux kernel.

From there, one would presume, Novell’s sales teams could introduce these OES customers to SUSE Linux Enterprise Server installations and reap the benefits of those sales. But talking to Sophia Germanides, senior product marketing manager for Novell Open Enterprise Server, one gets a less transitory picture.

“Novell Open Enterprise Server is a flagship product for Novell. It is the upgrade path from NetWare. For a large segment of our customers, it is the product that defines their relationship with Novell,” Germanides wrote in an online interview. “Networking, file, and print are the original collaboration services and are still mission-critical today. We continue to focus on innovating this product line, to further differentiate it from the alternatives in the market.”

In some respects, the migration plan to OES is working. “…[M]ore than 75% of current NetWare-Open Enterprise Server customers have upgraded their systems to Open Enterprise Server on Linux,” Germanides indicated.

OES customers declining

But, once that migration is done, what’s happening to OES customers? Looking at Novell’s own numbers, they are definitely on the decline.

“Sales of our OES and NetWare-related products have been declining for many years and declines at accelerated rates could offset or out-pace any growth in sales of our other products,” states the annual financial report filed for fiscal 2010. “We terminated general support of our NetWare products beginning in March 2010. While customers are eligible to receive extended support for NetWare, some NetWare customers may migrate to a competing platform which would negatively impact our revenue. Our strategy is to stabilize these sales declines to the extent practicable with new product releases and other efforts; however, combined OES and NetWare-related product revenue declined by US$12.1 million, or 7 percent, in fiscal 2010, compared to the prior year.”

Actually, the 7 percent decline is an improvement: From 2008 to 2009, the OES product line lost US$28.1 million, or 13.7 percent, in revenue. That the decline rate was cut nearly in half is definitely credit that Novell should get. Germanides is currently seeing a big push in her business unit (which may account for the breaks applied to the revenue loss).

“Open Enterprise Server has a lot of momentum right now. In fact, the customers that have adopted Open Enterprise Server on Linux have reported they are very satisfied with the performance and excited about the upcoming features and functionality. Most importantly, the roadmap story around file sharing is very compelling and is sure to continue that momentum into 2012,” she wrote.

That hint about file sharing may be the a clue as to what innovations are being planned for the OES lineup. So may this: I asked Germanides if there was any customer type out there that needs OES, but doesn’t know it, and her answer was noteworthy.

“The media doesn’t often focus on them, but new companies, start-ups, should definitely look at Open Enterprise Server. Building an infrastructure on a SUSE Linux foundation is a smarter way to use capital than the expensive license agreements that Microsoft presents,” Germanides replied. “And, for essential file and print services, Open Enterprise Server provides industry leading capabilities on top of an open source platform. For a nascent company, it’s a match made in heaven.”

This is telling because lately there has been growth in the managed service sector, particularly targeting small- to medium-sized businesses (SMBs). Turn-key servers managed locally or remotely for SMBs are starting to gain a lot of traction, and this could be a good market for Novell to muscle into.

The question of what will become of NetWare, then, will become one of execution: if the Collaborative Solutions (CS) business unit (which manages the OES product line) can get a plan together and implemented for OES in a new market (SMB or otherwise), then it stands a fair chance of succeeding. Even as cloud and virtualization services grow, there is still the need for local collaborative services on the ground at any organization.

But the CS unit needs to have its ducks in a row fast, if it’s to make a strong case for the continued existence of OES.

As for the actual NetWare software, it does not seem long for this world. Even if OES succeeds, it is clear Novell’s plan is to migrate legacy customers away to OES on Linux, and certainly sell new customers that product. The services of NetWare may live on in OES, but the day the last NetWare server is shutdown may soon be coming.

Get the Free Newsletter!
Subscribe to Daily Tech Insider for top news, trends & analysis
This email address is invalid.
Get the Free Newsletter!
Subscribe to Daily Tech Insider for top news, trends & analysis
This email address is invalid.

Latest Articles

Follow Us On Social Media

Explore More