Novell buys Toronto virtualization firm PlateSpin

PlateSpin, a Toronto maker of server virtualization management and recovery solutions, is about to be bought by Novell, which calls the US$205 million deal a “huge step forward” in its attempt to automate data centre management.

Novell hopes the all-cash deal for the 200-employee private company will close by April 30. He said Novell, with its partners, will be able to help organizations create “the next generation data centre” by allowing Linux, Unix and Windows workloads to work flexibly.

“We’ll be able to marry Novell’s expertise in virtualization, policy management and IT orchestration with PlateSpin’s deep technology solutions around server consolidation, disaster recovery and workload portability.”

A five-year old startup funded by venture financing, PlateSpin makes three products: PowerConvert, which streams workloads between physical and virtual servers; PowerRecon, which analyses available server resources and lets business units charge for virtualized resources; and the just-released PlateSpin Forge, a remote location hardware disaster recovery appliance based on VMware.

Joe Wagner, senior vice-president and general manager of Novell’s systems and resource management division, said PlateSpin’s products fit “hand and glove” with Novell’s open source Xen Hypervisor and ZenWorks Orchestrator, which manages physical and virtual workloads.

“What we were missing were a couple of key pieces,” he said, including PowerRecon’s capability to analyze environments to determine what workloads should be on physical or virtual servers and PowerConvert’s ability to create images for those servers and to move between them.

“It’s a great marriage with no overlap between technologies” of the two companies, he said. PlateSpin already has partnerships with the two leading hypervisor makers, VMware and Microsoft, and Novell doesn’t expect those relationships to change.

John Sloan, an industry analyst with Info-Tech Research of London, Ont., called the acquisition a “strong play” by Novell because as virtualization becomes a commodity, infrastructure software companies will compete on their ability to offer virtual management products.

PlateSpin is a “well-regarded” company, he said, whose physical-to-virtual migration products are widely used. “Outside of what’s offered by VMware, PlateSpin is the tool I come across as being used most often,” he said.

Data centre managers who bought PlateSpin products in part because of its hypervisor-neutral strategy may now have second thoughts, Sloan said. However, he noted Novell said it won’t be integrating PlateSpin products into its offerings yet.

PlateSpin founder and CEO Stephen Pollack agreed there should be no concern. In fact, he added, buyers should be reassured that the company will be bought by one with a big balance sheet. It’s hard for a privately-held venture-backed company to spread globally, he said, one reason he went for the Novell offer. PlateSpin had revenues last year of about $20 million, compared to publicly-traded Novell’s revenues of about US$1 billion.

IT managers should also see the deal as a sign of PlateSpin’s “re-commitment … to a multiplatform data centre,” he said, because that’s Novell’s strategy.

After studying math and computer science at Queen’s University, Pollack worked for Fulcrum Technologies for 10 years in both development and non-development posts before joining FloNetworks, a Toronto direct marketing and e-mail applications service provider, as vice-president of product management. He left after it was bought in 2000 by DoubleClick.

In 2003, Pollack and several others build PlateSpin to help IT managers bring new technologies such as virtualization and blade computing into the data centre by automating procedures.

PlateSpin’s customers include the AXA Group, a Paris-based financial conglomerate, Missouri-based Commerce Bank and the city of Montreal. It has sales offices in the U.S., the U.K, Germany, France and Australia.

Novell has been a technology partner of PlateSpin’s for several years. PlateSpin CEO and founder Stephen Pollack said Novell first approached his company about a deal in September.

For the time being Novell plans to keep the PlateSpin name. It doesn’t plan at the moment to convert any of its software to open source. PlateSpin will continue selling largely through its 20 Canadian system integrators, such as Calgary’s Long View Systems and Thornhill, Ont.’s Onx Enterprise Solutions.

It also has a direct sales staff for named accounts. Pollack estimated that 70 per cent of its Canadian sales are through the channel. In addition to facing VMware’s tools, Novell now competes in virtualization management with Microsoft’s System Centre, the newly-merged management centre about to appear in Windows Server 2008. However, it will be another several months when Micrsoft’s Hyper-V hypervisor is released, to give it a full set of tools.