Novell to spin off caching company called Volera

Network World |  Business

PROVO, UTAH -- In a major strategic move expected as soon as this week, Novell will attempt to cash in on a red-hot market by spinning off its division that handles caching and hosted file services.

The new company, called Volera, will market and develop products from Novell's Net Content division, including the Internet Caching System (ICS), JustOn Hosted File Services and Content Exchange, Novell's content acceleration services for ISPs.

Volera will compete with CacheFlow, Inktomi, Network Appliance, Akamai and Digital Island for a piece of what the Internet Research Group says is a $5.5 billion content delivery/caching market.

Novell will fund 80% of Volera; the remaining 20% will come from unnamed Novell partners, sources say. Novell wants these minority partners to help formulate the direction of the company. A complex set of cross-licensing agreements with Novell for the NetWare- and directory services-based caching system may complicate the spinoff.

Novell declined to comment.

"Even though the company has very good products, they are hard to market under the Novell name," says Steve Shepich, an analyst with brokerage firm Olde Discount. "By cutting Net Content loose into the high-growth caching area, it could really add value for shareholders."

Phil Schaecter, an industry analyst with The Burton Group, agrees with that assessment.

"The caching company will be more successful without being burdened by the Novell name and stock price," he says. "The company can be valued using a different scale, so it will have a higher stock valuation and attract different equity partners."

Novell is not required by the government to specify company revenue by division until the first quarter of 2001. Thus it is not known whether Novell has realized profits from its Net Content division, although CEO Eric Schmidt reported that in the third quarter Novell had received $2 million in royalties for ICS.

Hosting market grows

Hosted services are booming because few companies can hire qualified IS talent or keep up with the task of an ever-expanding number of applications.

"We're bullish on the move toward hosted applications," says Michael Alic, an analyst with Robertson Stephens. "For a lot of companies it is very difficult to obtain the IT resources that can implement high-end software packages and complex networks."

Alic says companies that provide network infrastructure services are going to e-commerce success.

"As more and more applications migrate to the network, the ability and throughput of the hardware devices has to increase," he says. "Novell's alliance with Akamai is important."

Novell recently partnered with Akamai to integrate Akamaizer content-acceleration functionality into the Novell ICS and Content Exchange products.

Join us:
Facebook

Twitter

Pinterest

Tumblr

LinkedIn

Google+

Answers - Powered by ITworld

Join us:
Facebook

Twitter

Pinterest

Tumblr

LinkedIn

Google+

Ask a Question
randomness