Novells HQ Move Raises Questions About NetWare

Novell Inc. officially put its headquarters flag in Waltham, Mass., last week when it designated its address there in a Securities and Exchange Commission filing last week. But the move, in the works for some time, came as no surprise and will have no effect on operations, according to the company.

The dual-headquarters designation for Novell between Provo, Utah, and Waltham was dropped recently, but several observers said the move is a natural extension of Novells move toward open-source delivery and services.

"With the acquisition of SuSE [Linux], it was no longer the Novell of NetWare. It merged with an integration company," said Frank Dzubeck, president of Washington-based consulting firm Communication Network Architects Inc. "Relocating [headquarters] to the home office of the integration parent was the natural thing to do. [With that merger] it ceased to be a software development company and Utah ceased to have the focus it had in the past."

Not only was the SuSE Linux acquisition a factor, but the Ximian acquisition, the acquisition of Cambridge Technology Partners and the location of several high-level executives in the Boston area made the move a foregone conclusion.

"All the executives were already there. The upper management in Provo doesnt go very high now," said John Enck, a vice president at Gartner Inc. in Loveland, Colo.

Novell officials said there will be no relocation or further layoff of personnel as a result of the action. Novell in its third fiscal quarter of last year cut 600 positions.

Novell still has a large presence in Provo, where its core NetWare, NDS, Zenworks and iChain lines are located.

But the paper move begs the question of what happens to NetWare, which is still a cash cow for the company but does not represent its future.

"If things are stable with NetWare, I would guess theyd leave it alone and get rid of some of their buildings at their huge campus in Provo," said Harry Fenik, president and CEO of Sageza Group Inc. in Mountain View, Calif.

"NetWare isnt a growth opportunity or a market force," Dzubeck said. "When it ceases being a cash cow and becomes more of a burden, you get rid of it. Will they do that this year? I dont know. It depends on the next few quarters revenuewise."

In the meantime, the biggest loser in the designation of Waltham as corporate headquarters could be the airlines, quipped Fenik. "Its a much shorter flight from Boston to Germany [SuSE Linuxs international headquarters] than it is from Provo. United and American Airlines may be very upset by this," he laughed.