One thing seemed to be on everyone’s mind at Novell Inc.’s BrainShare 2001 last month, and it wasn’t the company’s One Net vision.
The recent announcement of Novell’s acquisition of e-business consulting firm Cambridge Technology Partners Inc. (CTP) was instead the centre of attention. That announcement, made one week before the company’s annual user conference, was followed by the news that Novell CEO Eric Schmidt would be stepping down, surrendering the reins to CTP’s Jack Messman, a former Novell executive.
During various press conferences and speeches, Schmidt acknowledged that he was happy to be able to return to working with technology, and assured that he would be staying on as chairman of Novell.
The untimely acquisition (at times called a “merger”) announcement meant that a lot of questions posed to Novell executives during the conference could not be answered, because some things will remain unclear until the deal is done.
One analyst noted that the whole deal appeared to be “a bit confusing.”
Dan McLean, research manager with IDC Canada in Toronto, said Novell has been focused on its One Net concept, and on getting that message out to its customers, but now is sending out mixed signals about its direction.
“I think where people have a lot of trouble is: where does essentially a consulting company have a fit with a software company? I think that’s part of the confusion. It just makes you wonder where Novell is headed as far as its future is concerned,” McLean explained.
Looking down the road, McLean said it is hard to predict where the company wants to go.
“In some respects, this is an acquisition that comes out of left field. I’m not quite certain where the company is headed,” he said.
He added that there are a lot of unanswered questions around the role of Cambridge, whether purchasing that company signals some fundamental changes for Novell, and what those changes are going to be.
“All that I’ve heard Novell say is that the Cambridge acquisition is going to help them in terms of getting closer to customers – help them with customer relationships,” McLean said. “That’s how they’ve positioned it.”
At least one Novell customer seemed to have gotten all the information she needed. Lana Viinamae, director of computer operations and telecommunications for the City of Toronto, and a first-time BrainShare attendee, said the Canadian executives were filled in on details concerning the acquisition at BrainShare.
“The announcement about the CTP acquisition has been great, because it means…it’s filling out (Novell’s) offering, so that they’re no longer a product and technical services company,” she said. “They can now get more into that solution space.”
Viinamae added that she is comfortable with the announcement, and doesn’t have any concerns about the acquisition affecting customers negatively.
“I think they’ve now got resources that can deal not only on the focused technology issues, but on a broader scope and how to integrate technology into our environment.”
Viinamae noted that all of her questions were answered through executive briefings. Novell was very clear on how CTP fits into its corporate architecture, and which gaps CTP will be filling, she explained.
She added that the marketing stance Novell has now taken also appeals to her.
“My personal feeling was that in the past, Novell didn’t do a very good job of educating the people that were making a lot of the decisions and spending the money on product,” Viinamae said.
Novell plans to keep up with its “vigorous” advertising campaign, but will now also be shifting its focus by targeting the “C-level,”(CEOs, CxOs, etc.) in conjunction with IT professionals, according to the company.
Schmidt explained that this was a necessary marketing move for Novell.
“The problem was, our sales force was calling the director of networking and he or she would go to the CIO and they’d say, ‘Well, who the hell is Novell?'” Schmidt told Network World Canada. “We can do more than one thing. We can call on both the director of networking and also his or her boss. We’re going to try to talk to both.”
When it came time to speculate what the future really holds for the company down the road in other areas and matters of business, that was all that could be done – speculate. Without Messman there to answer questions, all attendees could really go on were the upbeat keynotes. Messman focused on CTP and its practices, giving no true hints of what is to come. Some sources indicate Messman was brought in for one thing – to liquidate the company.
“The fact of the matter is, they’ve bought themselves a consulting company, and it leads me to believe that they’re going to get into this business of consulting,” said IDC’s McLean. “And that’s fine.”
A transition like this might be just what the doctor ordered, according to McLean. Becoming more service-focused means the company will be stronger, and will have more knowledgeable product people – a good thing for customers.
“I would probably guess that this is a good change because, frankly, given their recent history, they haven’t had a whole lot of great success in the businesses that they’ve been involved in,” he added.