Novell Inc.’s pricing and migration strategies may be sending a signal that the open-source software vendor is relinquishing the smaller server market battlefield to Windows maker Microsoft Corp., according to an industry analyst.
Pricing for Novell’s Open Enterprise Server (OES), for instance, has not made it easy for organizations running earlier versions of Novell NetWare to upgrade to the OES, said Darin Stahl, research lead at London, Ont.-based Info-Tech Research.
Novell’s OES, said Stahl, was the company’s strategy to “keep NetWare users from defecting to Microsoft” and provide a bridge for Novell’s network customers to move to Enterprise Linux.
“To move from Novell 5.1 to Novell Open Enterprise Server is actually more expensive than deploying the new Windows Server 2003 Standard Edition,” said Stahl. “Novell is not really doing a good job of holding those customers.”
This is particularly true with smaller enterprises that have not necessarily set a definite future with Linux, but are faced with the choice of upgrading to OES or migrating to Microsoft, he said. “When faced with the upgrade cost, they are definitely going with Microsoft.”
Non-profit organizations Lutherwood Child and Family Foundation and Osteoporosis Canada (OC) are two long-time Novell NetWare users that faced such a decision, and both opted to migrate to Microsoft.
Lutherwood, based in Waterloo, Ont., is a health and social services organization running a mix of open-source technologies including Novell NetWare 5.1 server, Red Hat 9.1 Enterprise Linux and Novell GroupWise 6.5. The company has experienced continued growth over the years, but Lutherwood’s IT environment seemed unable to keep up.
“We started to realize we have a very complicated (IT) environment, where we had different programs that required a number of different applications,” said Ian Collins, Lutherwood’s IT coordinator.
While Lutherwood was running on Linux and Novell, most of the software the company used was built on Microsoft technology, he said. As a result, Collins’ team often found themselves “running around and putting out fires” as users complained of programs freezing and files getting locked, and restoring programs seemed to be a daily occurrence for the IT team, he said.
Toronto-based OC’s network administrator was undergoing a similar dilemma of “going around and keeping the network on its toes,” according to its president and CEO Karen Ormerod. The organization was running into difficulties with its IT system, which consisted of Novell GroupWise 5.5, NetWare e-mail system and several old computers. “My first week on the job, I recognized that [the IT environment] was quite a flaw in the organization,” said Ormerod, who joined OC in June 2004.
The firm also needed to reacquire management of its database which, until recently, was outsourced to another agency, said Ormerod. Outsourcing its database provided another set of challenges for OC, such as delays in getting information and issuing tax receipts, she said. For Ormerod, the company needed to adopt a database system that could be managed in-house efficiently and cost-effectively.
Both Lutherwood and OC were good candidates to standardize on a Microsoft platform, said Andy Papadopoulos, president of Toronto-based LegendCorp., a Microsoft Gold Certified Partner. The two outfits needed a platform that was easy to maintain and would not require dedicated IT staff “to baby-sit the system,” he said. “They are not in the IT business. They don’t want to have multiple IT people supporting the environment,” said Papadopoulos.
Following a complete assessment of Lutherwood’s entire business process and IT systems, LegendCorp migrated to Microsoft Windows Server 2003 operating system and Microsoft Exchange Server 2003, and moved OC to Microsoft Windows Server 2003 operating system, Microsoft Exchange Server 2003 and Microsoft Outlook 2003.
Both companies claim to have realized annual savings of over $30,000 from licensing, reduced server count and general support. Ormerod said collaboration and communication among the OC staff improved significantly. For Lutherwood, help desk calls decreased by 35 per cent and the IT department satisfaction rating went up from 68 per cent to 100 per cent, said Collins.
“In Canada, we are seeing a wave of migration from Novell customers choosing to move to the Microsoft platform,” said Hilary Wittmann, Windows product manager for Microsoft Canada in Mississauga, Ont. Lower total cost of ownership and “delivering business value” were the two main drivers for this, she said.
While this may be the case for smaller businesses in Canada, choosing to migrate from Novell to Microsoft had not been an easy decision for larger companies, which normally have in-house staff and expertise supporting a Novell NetWare environment, said Info-Tech’s Stahl. Mid-sized to large firms would normally stick it out with Novell, he said.
“Novell may be more successful targeting larger enterprises. And it’s not like [Novell] would publicly say that they would be leaving the battlefield to Microsoft in the smaller server market,” said Stahl. “But really they are, with their pricing and migration strategy. They have tons of vendor support, but they’re all aimed at larger SMEs to big enterprises.”
