Novell Eyes Acquistions To Gain Web Services Foothold

Armed with a $700 million war chest, Novell's top executives have penned a shortlist of application server and integration acquisition prospects and would like to get a deal done before the year's end, sources said.

BEA Systems, Iona, Tibco, Vitria, webMethods and Mercator are among Novell's potential acquisition targets, sources said.

"Right now, people don't relate Novell and Web services, so [Novell has a huge uphill battle. But they can turn the right heads with an acquisition," said one source close to the company who's familiar with the list of acquisition targets. "The application server is the platform for Web services, and Novell needs J2EE Web/app server capabilities," the source added.

Novell Vice Chairman Chris Stone reportedly is a big proponent of furthering the company's Web services push via acquisition. "Chris Stone is a man of action. He wants to move on this quickly," said one source familiar with the situation.

One Novell insider, who requested anonymity, acknowledged that several alternatives are being considered. "Novell is very serious about extending our Web services infrastructure. Like many technology decisions, it's a build vs. buy decision, and we're reviewing all of our options," he said.

Stone declined to comment on whether Novell was planning Web services-related acquisitions. However, in a recent interview, he and Novell Chairman and CEO Jack Messman said Novell had three technology holes that needed to be filled: a better GUI for its directory, a policy engine for the directory and an app server. "We'll have to provide [partners with better tools,a policy engine, app server, some areas we're missing," Stone said.

Messman declined to comment in the interview on whether Novell had specific acquisition targets. "We look at whether to make, partner or buy all the time. There's no particular acquisition on our mind. But with our solutions agenda, we know there are holes in the solutions," he said. In Novell's 2001 annual report, Messman identified Web services and EAI as key growth areas for the company.

Like the directory, the app server is acknowledged throughout the industry as a critical infrastructure component for XML Web services. In recent months, IBM has touted WebSphere, Sun Microsystems has trumpeted its Sun Open Net Environment (ONE) application server (formerly iPlanet) and Microsoft is promoting Windows.Net as its key app server platform for XML Web services.

Though Novell has a strong directory offering, its application server offering is weak, industry observers said. Novell can push NetWare as a suitable J2EE application platform and Web services access point, but purchasing a high-profile app server would accelerate Novell's Web services push, they said.