Novell Struggles to Maintain Utah Base

Jim Pulliam remembers his disbelief when he first arrived in Utah to take over as CIO at Salt Lake Community College two years ago. "I couldn't believe how many organizations [in Utah] were still on Novell [NetWare LAN software]. It just shocked me."

Pulliam said Salt Lake Community College was one of the few institutions of higher learning in Utah's tight-knit education community that for the most part ran software from Microsoft Corp. rather than Novell Inc.'s products. The school uses Windows Server, Active Directory, Outlook and Exchange.

But outside of the education market, Utah IT operations are beginning to abandon Novell. Indeed, several IT managers said that they have recently migrated from Novell software to Microsoft offerings or are considering such a move.

Novell had few answers for users moving to Microsoft until it released Open Enterprise Server, the Linux-based successor to NetWare, last year. In addition, during its annual BrainShare user conference in Salt Lake City last month, Novell said it plans to bundle its disparate products into a SUSE Linux-based suite.

Some say such moves may be too little, too late for Novell, since it's losing customers even in Utah, where the company was founded in 1983 by four Brigham Young University classmates in Provo, where it was based until 2004.

Over the past couple of years, Novell has shifted away from its Utah roots, moving its core development team to Nuremberg, Germany, following the 2003 acquisition of SUSE Linux AG. The company relocated its headquarters to Waltham, Mass., a year later.

Utah's largest hospital operator, Intermountain Health Care Inc., replaced Novell's GroupWise collaboration software with Microsoft Exchange in 2004, citing problems with reliability and incomplete features. The move cut first-year operational costs by 35%, said Kyle Andersen, director of enterprise systems.

Nu Skin Enterprises Inc. in Provo finished porting its e-mail and file and authentication servers to Microsoft from Novell last year, said Reed Wilson, global infrastructure architect. "There were just a few people who whined," he said. "But good heavens, our CIO at the time came from Novell, and he didn't think it was such a bad decision."

To be sure, the Novell base still includes several large Utah organizations, such as the state government, Brigham Young University, America First Credit Union and Inc.

Novell officials downplayed the significance of its lost Utah customers. "People have been migrating off NetWare for years. This is an old, old discussion," said a Novell spokesman. He said the new offerings are likely halting the slide.

Gordon Haff, an analyst at Nashua, N.H.-based Illuminata Inc., said that Novell is starting to do the little things -- such as increasing the number of applications certified to run on SUSE Linux to several thousand -- that make upgrading to its Linux offerings attractive to NetWare users.

Copyright © 2006 IDG Communications, Inc.

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