Novell: 5 Signs of A Managed Services Strategy

Novell: 5 Signs of A Managed Services Strategy

Novell CEO Ron Hovsepian (pictured) and the company's channel team are developing a managed services partner strategy and SaaS licensing models that I think will surface in the second half of 2010. The start of the effort, which surfaced at the Novell BrainShare conference, involves big service providers like Verizon Business. But gradually, Novell will embrace small and midsize MSPs that want to offer managed security and other recurring revenue services. Here's a look at the emerging strategy.

To understand where Novell is heading with MSPs and hosting providers, keep an eye on five key items:

  1. Novell Intelligent Workload Management
  2. Novell Cloud Security Services and Verizon Business
  3. Novell Pulse, a social media and collaboration platform
  4. Partners like Paragon Development Systems
  5. SaaS licensing programs

1. Novell Intelligent Workload Management

Describing the Novell IWM strategy requires lots of text. But I'll sum it up in a sentence: Novell claims its IWM offerings allow channel partners to build, secure, manage and measure cloud and virtualized environments for customers. For a deeper dive on IWM check out this blog post.

And here's a side note: In order to help MSPs and VARs perform customer assessments, Novell is offering a free tool to channel partners called Recon, notes Steve Hale, who leads Novell's Global Data Center channel efforts.

No doubt, customer assessments are a key way for VARs and MSPs to spot sales and services opportunities, noted Zenith Infotech's Maurice Saluan earlier this week on MSPmentor.

2. Novell Cloud Security Services and Verizon

Watch for Verizon to build out identity and security management services. Novell CEO Ron Hovsepian provided some clues about the Novell-Verizon business relationship during BrainShare. I suspect Verizon will leverage Novell's forthcoming Cloud Security Services, which generated some buzz at the recent Parallels Summit in Miami.

Quite a few Novell partners at BrainShare were increasing their bets on identity and security management. True believers include Deloitte & Touche, which is doubling its Novell partner team in 2010.

3. Novell Pulse

Most media sites continue to describe Pulse as a social media and collaboration platform. But that description overlooks two key points.
  • Pulse is designed to work in tandem with existing email systems like GroupWise, Exchange and Lotus Notes. So it's a potential upsell opportunity for MSPs and VARs.
  • Pulse is designed as a SaaS solution that hosting providers and MSPs can offer to enterprises.
Watch for Pulse to debut mid-2010. Channel Chief John Dragoon tells me Novell expects Pulse to generate revenue this year.

4. Partners Like Paragon Development Systems

Take a look at Paragon Development Systems (PDS) and you'll start to see how Novell's smaller partners intend to cash in on the cloud and managed services.

PDS in January 2009 acquired Provident Technologies -- one of Novell's top partners in Wisconsin. The acquisition is part of a larger PDS strategy to tackle the cloud, and promote Novell's complete product portfolio to customers, according to Angela Daniels, director of provisioning and management software at PDS.

Historically, Provident Technologies focused on Novell's End User Computing offerings -- NetWare, ZenWorks and GroupWise. But at BrainShare, the PDS team was expanding its focus and getting certified on Novell SUSE Linux and studying up on cloud opportunities, said Daniels.

5. SaaS and Cloud Licensing Models

During a breakfast Q&A session with a couple hundred Novell channel partners, Novell's  executive team described how the company was developing SaaS-based licensing models for its entire software portfolio. The executive team pointed out that Novell already offers annual subscriptions, but monthly subscriptions are coming soon.

The Novell-Verizon Business relationship is the first example of Novell offering a subscription-type approach to Identity and Security management, Novell executives said.

Novell is also preparing new Linux licensing models. As one executive put it:
Getting it to an hourly rate will be necessary for some of our Linux products, and we’re working with partners on a cost per CPU hour for the partner passing through the service.
Ultimately, Novell seems to be focusing at the Infrastructure as a Service (IaaS) level. During multiple meetings at BrainShare, several different Novell executives indicated to me that the company would have a more complete managed services story to share in the second half of 2010.

Turning the Page

I know what some readers are thinking: Novell died in the 1990s, thanks to poor leadership and questionable acquisitions like Unix Systems Labs, Digital Research Inc. (DR-DOS), WordPerfect and Cambridge Technology Partners.

I've had multiple, lengthy discussions with Novell's current management team about Novell's history -- and Novell's future. And I've beaten Novell up pretty good for its previous missteps. In many ways, Novell remains a $1 billion company in transition. But I must concede: I was impressed with what I heard at BrainShare.

I'm ready to start focusing more on where Novell is going -- rather than where Novell has been.

The conversation remains a challenging one. Wall Street remains preoccupied with Novell's valuation and potential takeover chatter involving Elliott Associates, a hedge fund. But I wonder if anyone from Wall Street spent some time at BrainShare... listening to quite a few VARs and some MSPs that are starting to bet on Novell's Intelligent Workload Management strategy.

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