Novell Answers Channel Partner, SaaS Questions

During an executive breakfast at Novell BrainShare this morning, Novell CEO Ron Hovsepian and other members of the executive team answered key questions from partners specializing in Software as a Service, SUSE Linux, Identity and Security Management, and Novell’s other product specialties. Novell also named its partners of the year. Here’s a look at the conversation.

First, let’s start with the honorees…

1. Data Center Partner of the Year: Mainline Information Systems.
2. End User Partner of the Year: Paragon Development Systems (searching for URL…)
3. Identity and Security Partner of the Year: Deloitte & Touche. The company’s  average Novell deal size increased 85 percent, and pipeline increased 130 percent. Deloitte & Touche also was involved in SAP integration work.
4. Rising Star Partner of the Year: This area had two honorees. The first was Agilysis, which helped Novell to create a closer working relationship with Verison Business. The other rising partner winner was Infosys, which specializes in Identity and Security enhancements. Key customer wins included Disney.

What’s On Partners’ Minds?

Now, here’s a look at the Q&A interaction between Novell and channel partners this morning. All questions and answers are essentially paraphrased because of the rapid discussion and multiple speakers.

Partner Question: When will there be more effort for a GroupWise client for SUSE Linux?

Novell’s response: Visit our booth for a technology briefing (ouch, not a good reply).

Partner question: New York State’s academic vertical has a lot of Mac integration requirements. But those New York vertical customers are dropping Novell in some areas because of some Mac support issues.

Novell’s response: Novell absolutely has to improve on those issues. Novell met the State of New York’s CIO about a week ago. Novell conceded “we are not where we need to be” on the Mac issue… and Novell promised to be focused on the issue. The academic space is a $70 million business for Novell in the Americas. So, Novell is participating in roughly 200 academic events this year.

Partner question: I’ve noticed a trend in our business. Is Novell saying goodbye to some older customers and hello to new markets?

Novell response: The answer is no. The hardest thing for any business is to get a customer. We’ll strike a balance — maintain the customer base, while acquiring new customers along the way. Is Novell executing perfectly? No. But there’s no intention to move away from Novell’s customer base.

The core issue is to show a value proposition to have NetWare customers embrace Linux rather than Windows.

Partner question: On the identity front, some customers are going to a subscription model. Will that model play a role in Novell’s strategy.

Novell’s response: Delivering Identity as a Service — we believe we’re in the early stages of the market transforming toward this. The Verizon Relationship is the first Software as a Service relationship involving Novell’s Identity Management solutions. The long winded answer is we today can sell everything in a annual subscription model. 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. Monthly subscription options are already in place, though. Cost per hour will be for service providers. Keep selling licenses; we love those opportunities. If there are customers are interested in subscriptions, we’re interested in those, too.

Partner question: How is Novell driving awareness among CXO customers?

Novell’s response: We solve the challenge not through one activity. We’ll do an aggressive exploitation of social media. Most advertising is done online and is specific to online properties and solutions areas that are specific to us. Our PR hits are in the thousands every quarter, and 90% of the coverage is positive. Since May 2005, the data suggests awareness among IT decision makers is up dramatically. But we need to do a better job.

Broader issue: Even when customers decide to move off of NetWare and/or GroupWise, Novell says partners need to broaden the discussion to Novell Pulse, Novell Cloud Security Services and other emerging technologies.

Partner question: Is there a timeframe for Novell to address potential takeover offers? Some customers are concerned by the uncertainty.

Novell’s response: In terms of timeframes,  we’ve said we won’t offer public updates. If customers are pausing, I’d ask you to reach out to Novell’s senior executives to help address the customer’s questions. No matter what scenario a customer dreams up, the assets have value — so customers should have peace of mind about their Novell product investments.

Closing Thoughts

Other questions were raised during the session (which continues now…) but The VAR Guy is pressed for time.

Utimately, The VAR Guy was surprised to hear how few questions partners raised about SUSE Linux. And the SaaS/recurring revenue question didn’t come up till late in the breakfast Q&A.

A good portion of partners seem to have embraced Novell’s Identity and Security solutions, and many are still sorting out migration steps involving legacy NetWare customers.

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