• United States
by Eric Lai

Novell scrambles to fend off Microsoft on its old home turf

Mar 31, 20067 mins
Enterprise ApplicationsMicrosoft

With its one-time home base of Utah a symbolic battleground, Novell is scrambling to fend off user migrations to Microsoft, which has been pulling customers away in recent years.

Jim Pulliam remembers his disbelief when he first arrived in Utah to take over as CIO of Salt Lake Community College two years ago.

“I couldn’t believe how many organizations were still on Novell. It just shocked me,” said Pulliam, who oversees mostly Microsoft software, from Windows Server and Active Directory to manage the college’s files to Outlook and Exchange for e-mail for its 60,000-plus students. Even today, the college is, according to Pulliam and another source, the only institution of higher learning in Utah’s tight-knit education community not using Novell NetWare. “Sure, NetWare is functional. But where are you going to go with it?”

That is a question Novell Inc.’s remaining base of customers has long pondered. Until recently, Novell had few good answers. But last year, it released Open Enterprise Server, the successor to NetWare that lets businesses manage large networks on top of either a NetWare or SUSE Linux kernel. And last week at its annual BrainShare conference, Novell announced support for existing NetWare 6.5 users until 2015. It also announced a strategy of bringing together disparate products into a single suite built around SUSE Linux that will serve as an alternative to Microsoft’s Windows-based lineup.

But is the effort too little, too late? Some say so, pointing out how even in its native Utah, Novell has lost customers to Microsoft.

Besides Salt Lake Community College, leading Utah organizations that have migrated from Novell to Microsoft include motivational products maker Franklin Covey Co. and sports equipment maker LifeTime Products Inc. According to sources, Zions Bank and even the Church of Jesus Christ of Latter Day Saints are considering a migration from Novell to Microsoft software.

Utah’s largest hospital operator, Intermountain Healthcare, moved from GroupWise to Exchange in 2004 because of issues with GroupWise’s reliability and lack of features. “Our executives would come back from golfing with their buddies and ask me why they couldn’t get a BlackBerry,” said Kyle Andersen, director of enterprise systems for Intermountain. “The next five-minute discussion would become very painful.”

Last year, Intermountain consolidated 72 GroupWise e-mail servers scattered throughout its hospitals onto just 12 centrally located, easier-to-manage Exchange servers. That shrank the amount of storage needed from 5.2TB to 1.2TB and resulted in 35% year-on-year operational savings, said Andersen.

Emboldened, he is now in the process of switching the management of Intermountain’s 18,000 PCs from eDirectory, NetWare and ZenWorks to Microsoft Active Directory, Windows Server and SMS, a process he hopes to finish by year’s end.

Nu Skin Enterprises Inc. finished porting its e-mail and file and authentication servers over to Microsoft from Novell last year, according to Reed Wilson, global infrastructure architect for Nu Skin. The billion-dollar Provo-based direct seller of beauty products was finding GroupWise balky and expensive to run and Novell’s support inadequate.

Wilson said he got little internal resistance because of the switch to Microsoft Outlook and Exchange as well as Active Directory. “There were just a few people who whined,” he said. “But good heavens, our CIO at the time came from Novell, and he didn’t think it was such a bad decision. The writing was on the wall.”

To be sure, Novell still counts many large Utah organizations among its loyal users. They include the state of Utah, Brigham Young University, Inc. and America First Credit Union, among others.

But some observers say that the erosion of Novell’s customer base has picked up in recent years.

Quest Software Inc., an Orange County, Calif., vendor, said it has sold more than a million seats of its tool to ease NetWare-to-Windows migrations in the past two years. More than 100,000 of those were sold to Utah organizations or companies.

“I’m sending someone out to Utah once a week to do a migration off of NDS,” said Jerry Leger, a professional services manager with Quest. “There seems to be a movement going on there.”

Utah is a key symbolic battleground for Novell. NetWare was created by four classmates at Brigham Young University in Provo, where it remained headquartered until 2004. It was long Utah’s largest tech employer, although its 1,800-strong workforce in Provo – about a third of all employees — is now eclipsed by defense contractor L3 Communications Corp., according to Richard Nelson, president and CEO of the Utah Technology Council.

Novell has moved away from its Utah roots in other ways. Its 2001 acquisition of Boston-based Cambridge Technology Partners brought with it a new CEO, Jack Messman. With its 2003 acquisition of SUSE Linux AG, Novell’s core development team moved to Nuremburg, Germany.

In 2004, Novell officially moved its headquarters to Waltham, Mass. Only one member of its senior management team, Vice President Kent Erickson, remains based in Provo.

With almost two-thirds of Utah residents members of the Church of Jesus Christ of Latter Day Saints, Novell also used to enjoy an advantage of having many employees and customers being part of the same faith. But not anymore, according to Nelson.

“No CIO in his right mind would make a serious enterprise decision based upon shared religious faith,” Nelson said. “Are we perfect in this area? No, just as no area in the country where there is a predominant faith would be. But it has certainly decreased as a factor.”

The church itself is keeping its options open. “We’re evaluating our commitment to GroupWise and are considering other alternatives,” Joel Dehlin, acting CIO for the Church of Jesus Christ of Latter Day Saints, said in an e-mailed statement. “We have not made any firm decisions or commitments.”

As for whether the church would consider Microsoft software, Dehlin said: “We try to make technology decisions based on the value and cost of the product(s) and our analysis of the viability and service capabilities of the company. We try not to make decisions based on vendor loyalty or connections with the owners of our vendors.”

None of the CIOs interviewed – either those who stayed with Novell or those who switched to Microsoft – said they felt social or political pressure to stick with Novell.

“Our governor knows that we use Novell, but he’s never told us to keep using them,” said Darrus McBride, manager of systems engineering and operations for the Utah state government. The state has long used NetWare and Novell Directory Services, now eDirectory, and added Novell’s identity management products in 2001.

“We’ve periodically tested Microsoft products but haven’t found any compelling reason to migrate off what we’re using,” McBride said. As his staff gains Linux skills, the state is moving towards Novell’s Open Enterprise Server and SUSE Linux, he said.

Novell officials downplayed the significance of its lost Utah customers.

“People have been migrating off NetWare for years. So this is an old, old discussion,” said Kevan Barney, a Novell spokesperson. But with the introduction last year of Open Enterprise Server, a network management package that runs on top of either the NetWare or SUSE Linux kernel, “I’d be surprised if the migrations are still increasing,” he said.

Gordon Haff, an analyst at Nashua, N.H.-based Illuminata, believes that Novell is starting to do the little things – such as increasing the number of applications certified to run on SUSE Linux to several thousand from just a handful several years ago – that make upgrading to its Linux productsattractive to NetWare users.

But former NetWare users such as Nu Skin’s Wilson said the low prices and strong support he gets from Microsoft means there’s little chance he would switch back.

“It was a darn shame, because I used to be able to chuck a rock and hit Novell’s building from here,” Wilson said.