Novell Partners See Promise In Attachmate Acquisition

Novell channel partners are expressing mixed reactions to news that the software vendor, once a critical player in the channel, will be acquired by Attachmate for $2.2 billion.

"We've been assured by Novell that there are no planned changes to partnerships," said Phil Cook, lead architect for identity management technology at Identropy, a Novell platinum partner that provides managed services built around the vendor's identity management software. Cook said Novell sent an e-mail to reassure all of its partners on Nov. 22, the day the sale was announced.

"We're proceeding with business as usual," he said.

Last week Novell unveiled a deal to be acquired by Attachmate for $2.2 billion. Attachmate, based in Bellevue, Wash., develops software for terminal emulation, legacy software modernization, systems and security management, and application integration. The companies expect to complete the acquisition in the first quarter of 2011.

Novell, based in Waltham, Mass., has been in play since March when it rejected a buy-out offer from investment firm Elliott Associates valued at approximately $2 billion. While Novell directors said that offer undervalued the company, it's been an open secret that it has been for sale -- either as a single entity or split up.

One long-time Novell partner, who asked that he not be identified, shrugged at the news of the acquisition. Novell today accounts for only about a third of his company's business compared to more than 50 percent five years ago. "It's mostly been a maintenance thing," he said of his Novell-related sales today. The majority of the company's sales today are Microsoft, VMware and Hewlett-Packard products.

The solution provider said Novell had become difficult to work with, particularly in 2007 and 2008. Margins shrank to 5 to 7 percent on software licensing deals, he said, then to 3 percent when resellers had to work through distributors. And there has been constant turnover among the account representatives the solution provider dealt with. "We have to keep explaining ourselves to people within Novell," he said.

His advice to Attachmate? It should drop the Novell name, which he said is too closely associated with the aging NetWare network operating system, and focus on building the brand names of its newer products such as SUSE Linux.

Others, however, were more upbeat on Novell's future. "It's definitely going to be a net positive for Novell," said Aaron Fulkerson, CEO of MindTouch, an ISV partner in Novell's SUSE Appliance Program. He said becoming a part of Attachmate would force Novell to focus on its core technologies, including its open source products.

MindTouch develops software around the SUSE Linux platform and last week the company debuted the MindTouch Enterprise Wiki for SUSE Linux Enterprise environments.

Novell has "been in a holding pattern" since the company said it was willing to be acquired. Novell executives have said that uncertainty about Novell's future had taken a toll on sales.