Novell is honing a sweeping ASP initiative to push its network services into new markets, hoping to trigger a fundamental shift in the way IT managers buy software and services.
The hosting strategy, which the company plans to announce in October, is still very much in the planning stages, according to sources familiar with the initiative. The goal is to link a network of distributors and application service providers, via Novell's directory services software, to make it easier for businesses to purchase and deploy software from Novell or any third-party developer, the sources said.
An important cog in the plan is NetWare 6.0, which the company announced last week. With the 6.0 release, now in controlled beta and due to ship next year, Novell once again is repositioning the network operating system, this time as a platform for hosting heterogeneous network and storage environments.
NetWare 6.0 "will be a big part of the [ASP] initiative," said Jim Tanner, product marketing manager at Novell.
Officials declined to comment on further details of the hosting strategy.
As it polishes its latest ASP initiative, Novell finds itself in a precarious position. Its stock continues to sag after net income fell to US$8.6 million in the just-completed third fiscal quarter, leading to renewed rumors that the company will be acquired or will spin off some business units. Novell also is trying to fend off competition in the burgeoning ASP market from its traditional software rivals, Lotus Development and Microsoft.
On September 11, Lotus plans to announce a new hosting strategy that includes a version of Notes optimised for ASPs. Microsoft is refocusing its entire business on the software-as-services concept with its .Net strategy. Much of that work hinges on Active Directory, a direct competitor to Novell's NDS eDirectory technology.
Novell's plan, as conceived, is fairly simple, sources said. Using its arsenal of network services software, Novell will act as an aggregator between software retailers, or distributors, and ASP partners. The retailers will sell softwareÃÆ'Ã,¢Ã¢,Ã,¬"including non-Novell programs from companies such as Microsoft, SAP AG, PeopleSoft and LotusÃÆ'Ã,¢Ã¢,Ã,¬"and forward the order to Novell, which will then line up an ASP to deliver the hosted solution.
An order can be split among several providers, depending on which applications are needed, sources said. All applications will support eDirectory, enabling a single-sign-on capability for users. Novell will handle billing and management tasks and receive a small fee for each transaction.
Through this arrangement, if a customer is unhappy with its current messaging host, for example, Novell will be responsible for giving the work to another ASP, a change that will be transparent for the customer.
"This takes away a lot of the bad things about ASPs," said one source who requested anonymity. "It really changes the landscape for ASPs."
Sources were unsure what role, if any, Novell's iChain services will play in the initiative. Announced in February and due to ship next season, the iChain platform is designed to help companies integrate and manage business processes with partners and customers across the Internet.
As simple as the plan sounds, Novell will likely face roadblocks in trying to implement it, given the company's current struggles.
"There's a definite need for this, but they have to build trust first," said analyst Paula Boyle of Kinetic Information Systems, "If I were an ASP and I had to pick, I'm not going to pick Novell unless I'm already working with them."
Novell's efforts to transform itself from a network operating system provider to a network services company could hurt its chances of snagging big-name partners to reinforce the strategy, other analysts said. "Novell is in a precarious position, businesswise," said Dana Gardner, an analyst with Aberdeen Group. "They have to try to pull this off before Microsoft gets serious traction with Active Directory and gets a critical mass of users."
