Live From BrainShare: QandA With Novell CEO Jack Messman

Like an expectant father, Novell is full of energy and excitement while awaiting its latest technologies and products to arrive to market. That accounts for some of the anxious feelings in and around Salt Lake City this week, where Novell's annual BrainShare event in under way for some 6,000 customers and partners.

As it does every year, Novell has made a raft of product and partnering announcements. They run the gamut from a new effort to help small open-source developers bring their projects to market to a new Linux-based suite aimed at small and midsize customers. The company also showcased its long-awaited Open Enterprise Server (OES) operating system. The hybrid server environment combines the legacy file, print and network-management features of Netware with the operating-system heft of Linux.

Linux and identity management, obviously, are where Novell is placing a lot of bets. But while it has received accolades for moving beyond its traditional NetWare technology and looking ahead to the future, the company's fortunes have not yet materially improved to the extent that those of AMD, Apple and other once-struggling companies have. That has caused some frustration within the company, but not slowed its determination to refine its product suite and drive more business though partners. In a one-on-one interview with Novell CEO Jack Messman, VARBusiness senior executive editor T.C. Doyle probes Messman for an update on the company, why success hasn't come more robustly and what he thinks will turn out to be a winner for Novell.

VB: Companies trying to turn around, such as Apple and others, have made gains with innovations outside their traditional focus. How do you guys stay the course and not get tempted to do something radically outside your focus?

Messman: Within what we are doing, within the narrow focus of Linux and identity, there are all kinds of opportunities. If you look at the various components of the technology stack and data center, you see things that we don't do today in Linux that have been done in Unix already. So we say, "Hell, we have to do that." We have just scratched the surface in terms of virtualization, grid computing, etc. There's plenty of opportunity within what we are doing to innovate. I think Novell over the years used their cash balance to go get into things that probably didn't fit directly into what they ought to have been doing. So if it's one thing I am bringing to the table, it's the discipline to make sure everything fits. The key question is whether or not we have the right big picture. I think Linux is a right big picture, and I think identity is a big picture. Both of those are segments that are going to grow faster than the overall market. And I think they are areas where Novell has some heritage and some strengths. You always want to play to your strengths.

VB: Talk about the heritage...

Messman: When we started the identity thing, we had 160 products. We had some products that were very, very good that customers didn't know what they were used for. And we didn't have them rationalized as to what the customers would do with them. [Overall] I think that's the key thing we did. We took those 160 down to a meaningful few. Things that used to be called "DirXML" are now called Identity Manager so people now have a better feel for what that does. They can visualize now instead of some abstract thing. We have the products organized into solutions, and the solutions are addressing real business problems that our customers have that they want to resolve. Imagine walking in the door and saying, "I have this Border Manager thing and this Directory thing you might be interested in looking at." Not gonna get too far. But if you say, "I have this thing that will increase your security by managing identities and the firewall," then people get it. But we didn't sell it that way. So the big changes we have made is to reorient the company around solutions for customers. This has not been easy; this is a product company. And we have had a lot of transitions to go through to get there. And we have had to acquire quite a few companies to get there. We acquired Cambridge Technology Partners to get the solutions orientation. We acquired SilverStream Software to get some of the tools that we didn't have to implement those solutions. We got a toolset from SilverStream, we got a provisioning tool that fit right into identity, we got a services-oriented architecture, etc. And now all of those are part of our identity strategy. So I think in retrospect, those pieces fit, but at the time people didn't see that.

VB: You've been candid and very open about when you might need something else to add to the portfolio. At this juncture, are you satisfied by what you have, or are there other pieces that you need?

Messman: There are still lots of niches that are unfilled. And we are constantly looking at those little holes in our architecture. And we fill those by either making the product, buying the company that's making the product or licensing the product that's already making it. We look at this all the time. And there are six or seven projects like that going on all the time. And the market is advancing, too, for Linux. It's going into different parts of computing. The data center is the big one. We are announcing a major push behind Linux and the data center.

VB: What else is big this week?

Messman: This Market Start is a big deal. People don't understand what we are saying here, but there are a lot of what I call component companies in open source. See, these are small companies that got funding from a VC to create a product that fits in the technology stack above Linux. And they are gonna create these products. Some of them are pretty far along, and some of them aren't. But they are gonna say, "How the hell do I get this thing sold into the market and to the customers?" And that's what Market Start is all about. We've got the technical support organization, the sales organization, the channel. And we are saying to these companies, "If you want to get to the market quickly, come join this program. We will co-brand the product, sell if for you and support it for you. And we'll take a piece of the revenue to do that." Astaro was the first company we will do that for. Astaro's product we call Novell Security Manager Powered by Astaro. So there it's a Novell product, created by Astaro, taken to market by us.

VB: I know it's new, but how do you prevent your guys from getting behind a piece of code [that's not ready for prime time?]

Messman: You have to understand, in open source you get to see the code. If it were a proprietary product, you'd have a different set of due diligence to do to make sure they didn't steal the code from some place and here you are out there selling it. With open source, you can look at the code and check out how good it is, and we are going to do that.

VB: How are you handing the indemnification?

Messman: We will indemnify any open-source product that we ship.

VB: I don't want to gloss over any of [this week's BrainShare] announcements; you made a couple of them. We'll come back to those -- the SMB one, the suite one -- in a second. Let's talk legal for a second, and the latest you can describe on the ongoing situation with SCO. You think they are going to run out of gas before they ever get to court?

Messman: Well, that's what they are slowly doing, some say.

VB: ...Maybe not so slowly...

Messman: Some say that's IBM's strategy, but I don't want to speculate on that. They still haven't shown any proof of the claims they make. Initially it was there is Unix in Linux, but they have backed off that. Now they are saying it's a contract issue between them and IBM, but they don't show any proof. I'm only telling what you can learn in the marketplace. We have tried to dismiss a couple of times their disparagement lawsuit against us when we said, "You know we own the copyrights and the patents," and they said, "Well, you're disparaging our ownership of them." We are going through all the normal procedures in the courts, as is IBM. I don't know if ours will be decided before theirs, although it's unlikely because if the courts decide we do own the copyrights, that invalidates a significant piece of the SCO litigation against IBM. So it's not likely ours is gonna get decided any quicker. But IBM has their own battles to fight and it's too tough to speculate.

VB: Come back to this week's announcements. They run the gamut. You have the SMB one, the suite one. All together they suggest the company as its annual partner and customer gather is moving forward. Any one leap out at you?

Messman: The ZENworks one. That's managing Linux desktops. Not only does it manage Linux, but it is Linux. It is a Linux product managing Linux desktops and Windows desktops. That's a big thing because there was no other company doing that yet, not even Altirus. So that was a big one. The small business suite sitting on Linux is a big one, because that's a channel-oriented product and we need to get the channel products they can sell. We want them more involved in our sales strategy than they have been. We have focused our direct sales force on large, named accounts. We're turning the rest of the business over to the channel and they have to have some stuff to sell. It's a very well-priced product with the right functionality. In that product today are proprietary and open-sourced products. Over time, I think there will be more open-source content in that product, which will lower its price even further. It will be a good entry-level product for small businesses.

OES wasn't announced today, but it is a big deal. It's what we have been waiting for two years to see whether OES will slow down the NetWare decline. Let's assume you don't like NetWare: We showed how easy it is to get onto Linux with the push of one single button. I think that's going to be a powerful message. Significant but not as well understood is the Market Start announcement. The other two things we announced are the two architectures or frameworks: JBoss and Identity. Those are pretty important because creating an Identity solution or app-server solution in open source is not easy. In Linux it's a new thing, and we are trying to make that easy. So JBoss has got this app-server stuff that ultimately allows us to compete with BEA and IBM. They had some things missing, portal technologies and things like that we got from our SilverStream acquisition, and we are helping them out by contributing it. We think they are in the right space and the popularity of their software is incredible. The other one was a framework for helping customers create identity solutions on their own. We think that's important.

VB: You've done as many credible, right, smart and clever things to right this company, to get it going in the right direction, that you can, and yet, all accolades and credit aside, it may not have the traction at this point you would have hoped. What is not yet clicking into gear for you at this point?

Messman: Well, yeah, I'd say it would have been a hell of a lot easier if the IT market would have been better. We have gone through a slow period after 20 years of fast growth. And nobody knows what the future is gonna look like. If the growth had been there, it would have been easier. But we didn't go into this thinking this was going to be quick. We said this was going to be a two-year process. And that we are in the middle of the first year in North America on the sales side. We're just starting in EMEA. We have a number of products that need to be rearchitected that would allow them to become more competitive in segments in the market that we now don't compete in. For example, by rearchitecting ZENworks, we can now sell it onto the Microsoft installed based rather than just into the NetWare installed base. So some of those components being rearchitected become eligible for being open-sourced. So we had a whole monolithic code thing. And it makes it tough to contribute the entire GroupWise product, or the entire ZENworks product, to the open-source community. But if you have it modularized, you can pick off the pieces that are most appropriate for open-sourcing, then you can do that. But we don't have that ability today because we developed all that code on a monolithic basis rather than a modularized basis. That was the thing to do back then. But now, we are rearchitecting to give us more flexibility.

VB: Just met with your 2004 Partner of the Year. He just closed his biggest Novell deal earlier, but barely. After selling the customer on the benefits of an ID solution, the customer asked if there was only Novell technology in the solution. The VAR was taken aback because the entire solution practically was Novell. And so he had to, for the umpteeth time, sell Novell in addition to its technology. That begs the question: Should Novell consider pulling a Cingular and change its name?

Messman: Well, I think the studies we have done show that the problem was NetWare, not Novell. And we've tried to make clear that Novell does not just mean NetWare. Linux helps us much.