Why Novell is worth $2.2 billion to Attachmate

By , Network World |  Software, Attachmate, merger and acquistions

Novell pulled in $199 million in revenue in the quarter ending July 31, with $37.6 million coming from open platforms, mainly Linux maintenance and subscriptions. In the quarter, Novell also reported $69.3 million in revenue for collaboration licenses, maintenance and subscriptions; $32.1 million in identity and security management; $38.5 million in systems and resource management; and $21.6 million in services.

Quarterly operating income was $21 million, identical to Novell's reported income in Q3 2009. However, quarterly revenue declined from $216 million to $199 million year-over-year.

Novell reports $1.846 billion in total assets and $850,000 in liabilities, leaving nearly $1 billion in stockholder equity.

Novell's acquisition marks "the end of an era," Gartner analyst Earl Perkins writes in his blog. Although Novell failed in market execution, "what remained consistent throughout most of Novell's existence was by and large the technical quality of most of its products." Perkins continues.

"Novell represents one of the original key players in the network operating system and identity management period from the early 1990s until today," Perkins also writes. "In fact, one could make an interesting case that the company made Microsoft what it is today through the early market battle between Novell NetWare and Microsoft Windows Server. We all know how that battle ended, but in the long run Windows Server was a better product because of it.

"Novell had significant and continued influence on many vendors, ranging from the identity and access management to the Linux market, from email to virtualization, and of course security. In most of those cases the company made a good to excellent showing of technology and was quick to improve upon it and in some cases to outpace its competitors both in terms of vision and architecture."

Attachmate, founded in 1981, was known early on for its terminal emulation software and more recently has expanded into management software, with buyouts of companies such as NetIQ and OnDemand Software. Attachmate is owned by an investment group led by Francisco Partners, Golden Gate Capital and Thoma Bravo.

While SUSE Linux is a totally new business for Attachmate, there may be some synergy between NetIQ, a systems management company owned by Attachmate, and Novell's technology from the Managed Objects acquisition, says Forrester analyst J.P. Garbani.

Attachmate has run NetIQ largely as a separate company, as there was little overlap between Attachmate's traditional product lines and NetIQ, Garbani notes.


Originally published on Network World |  Click here to read the original story.
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