Novell enters i-Planet’s orbit

Score one for the underdog. Just two weeks ago, Novell Inc. won Yahoo’s stamp of approval for its directory server technology, which will become the default directory for the latter’s corporate portal services.

That’s good news for Novell, as the company struggles to reorient itself as an e-business software and services company, moving away from its NetWare network platform business. It’s also bad news for Sun Microsystems Inc., since Novell’s software will replace that of iPlanet — the Sun and AOL Time Warner Netscape partnership — unless Yahoo’s customers want otherwise.

As well, AOL cut 500 jobs from the alliance in late August as part of a broader series of layoffs.

This deal by no means secures Novell’s future, but it does show how interesting a market Internet software development has become. And interesting can be a good or a bad thing for the enterprise.

Many so-called Net-based “solution providers” have a hard time making their messages clear. In Sun’s case, iPlanet never really sat well. The joint-partnership deal with AOL left me wondering just who made the business decisions, as well as who directed the alliance’s focus. Peddling Web server apps are one thing, but full-fledged e-commerce services need a lot more marketing effort and explanation if they’re going to sell.

Which, apparently, they didn’t. According to a Gartner Group Inc. blurb on the AOL staff cuts, iPlanet has really only been successful with its directory and application server offerings, with its e-commerce software still languishing.

Facing Novell’s long-standing experience with directory services, as well as Microsoft Corp.’s Active Directory offering, iPlanet has a rocky road ahead. Sun will likely have to take a stronger role in the partnership, which it needs to help bolster its own products and services. Gartner predicts Sun will ultimately buy out AOL and run iPlanet by itself.

But that will take some time, and customers shouldn’t have to wait while their providers get their act together. Gartner, for instance recommends “evaluating alternatives.”

For its part, Meta Group Inc. claims that Sun’s integration strategy is getting better, but could be hurt by market uncertainty.

Given the current economic slowdown (did anyone say recession?), organizations are going to be thinking hard about every IT spending decision they have to make. Increased competition may get you some good deals as firms vie for a shrinking piece of the pie, but that’s hardly a sustainable approach to building a sound technology strategy.

This is where Novell’s track record may offer some payback. Once the darling of IT and network managers, NetWare will ultimately give way to other operating systems, notably Microsoft’s Windows 2000 server line. If the company’s management can make good use of its earlier street cred to cement e-commerce deals, Novell might be able to make the transition to a broader services and software firm. And that would place them squarely against IBM Corp.

If Novell can keep up steam, we may soon see a fight for market share based more on technical merit than just business appeal. Now that would be interesting.

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