January 19, 2001, 2:44 PM — Financially battered Novell will try to improve its financial prospects as early as this week by spinning off the division that handles its caching and hosted file services, sources say.
The new company will be called Volera, sources indicate, and will market and develop the products from Novell's Net Content. This division handles Novell's Internet Caching System (ICS) and JustOn Hosted File Services. Novell will fund 80% of the company; the remaining 20% will come from Novell partners, sources say. Volera will have about 220 employees located in offices in the San Francisco Bay area and Orem, Utah. Sources say that Simon Khalaf will head the company. Khalaf is the general manager of the Net Content division.
Novell officials refused to confirm of deny any information from sources, and as a result some details of the actual announcement may be different from this report.
ICS is a set of software and hardware designs the company has OEM'ed to system manufacturers such as Dell and Compaq. ICS speeds the delivery of Internet content to users.
The JustOn Hosted File Services integrates Internet file services with caching and content acceleration capabilities. With hosted file services, users can store, share, manage and publish files on the Internet.
Sources close to Novell say that the Net Content division is losing money and that the split will improve the company's finances. Novell reported that in the third quarter they had received $2 million in royalties for ICS.
Novell has suffered from three dismal financial quarters and has said that its return to profitability will be slow. Novell credits a reorganization in May and layoffs of more than 15% of its workforce with the financial improvement of the company, however modest. Wall Street estimates that Novell will report fourth-quarter earnings of 2 cents per share on November 21. Sources close to Novell say that the company's results for the fourth quarter are disappointing, but will match Wall Street estimates.
Drew Major, Novell's chief architect and the designer of ICS and an original designer of NetWare is also reported to be joining Volera, which has been operating in stealth mode, a Novell source says. Novell registered the domain name volera.com and .org and .net extensions last June.
Volera is a word taken from the French verb "to fly," something the company's caching system does. In recent results from the Caching Bake-off, nine of the top 10 systems using Novell's ICS won for best price/performance.
Caching and content delivery are a booming business, says research firm Zona Research. A recent study indicates that more than $4 billion in e-commerce sales are lost each year in the U.S. because of slow page-loading times. IDC projects sales of caching appliances will increase fivefold to more than 100,000 by 2003.