Welcome to The VAR Guy Live: Podcast Edition. In this episode, Novell Chief Marketing Officer John Dragoon responds to five key questions about the company’s SUSE Linux strategies, broader software efforts and partner initiatives.
Date Published: January 6, 2009
Podcast Edition: 001
Key topics covered:
- SUSE Linux Sales: How fast are they growing, and what role does Novell’s Microsoft relationship play in that growth?
- Is Novell attracting new ISVs to SUSE Linux?
- Does Novell need to connect the dots between its product groups (SUSE, Identity and Security, etc.)?
- GroupWise: Will it ever be an open source solution?
- Novell’s partner strategy: What can we expect from Novell Channel Chief Javier Colado, especially amid Novell’s decision to cancel Brainshare during the weak economy?
Note: This podcast was scheduled to debut January 8, but several reader inquiries prompted me to publish it sooner.
UPDATE: We’re experiencing heavy traffic to the podcast. If the podcast loads slowly, you can listen by using this alternative link.
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Ogg too, please?
Roy: The VAR Guy is out at The Apple Store (there goes the company budget…) for a bit but he will investigate the Ogg format later today.
can’t get the audio for this
mturits: I apologize. Things seem to be working now. But follow the tip below if you have any more problems.
Hi Folks: A few people have informed me that they’re experiencing an audio issue. Traffic to the podcast spiked dramatically. If you have any problems “getting” the podcast, here’s an alternative link to the conversation.
Joe Panettieri
Editorial Director
TheVARguy.com
Nine Lives Media Inc.
Thanks, Joe. Can’t say that I appreciate the “conspiracy theorists” label, but it’s a good show overall.
Roy: Thanks for the note. When I said “conspiracy theorists” I was addressing all the open source folks out there who think everything Microsoft does is evil and therefore Novell is evil. I tend to view Microsoft in a much more balanced way. As for Novell, I’m impressed with the SUSE growth but remain sceptical because most people can’t describe the products that generate the other 85% of Novell’s revenue.
Now that I’ve listed to the podcast a few times, I could have:
1. Been more aggressive regarding Novell’s profits. Can the company deliver consistent net income that’s in the black. If so, when?
2. Been more aggressive regarding GroupWise: What are the revenue and growth projections? I don’t hear much at all about it in the channel or in corporate IT.
3. BrainShare: Specific examples of how training will be handled without this year’s BrainShare.
4.ISV Claims: Novell used some tricky language to claim SUSE has the most Linux ISVs. But I have to believe Red Hat still leads and I should have mentioned Red Hat a few times in the podcast. Shame on me.
5. And plenty of other tweaks.
But I have to say this: Novell is finally responsive to the media. It took a decade. But the company — even the product managers — now engage in media discussions. That’s progress.
Stay tuned. The VAR Guy’s Open Source 50 — a pretty big report on the open source IT channel — debuts Jan. 14.
Best,
-jp
Joe – It has been rumored that some of Novell’s largest GroupWise customers are moving away from that platform. As I understand it, GroupWise Maintenance is Novell’s largest source of revenue from a product perspective. What will that revenue loss mean for new technology offerings from Novell since they are already behind companies like Google, and Microsoft in the GroupWare and Collaboration space.
No doubt GroupWise is an “also ran” in terms of email market share. That’s why I’m surprised NOVL doesn’t thrown in the towel and open source it in some way. But perhaps the maintenance fees alone provide decent margin to keep things going.
Joe,
I did not listen to the broadcast, but I did read your summary thread. You say:
‘I don’t hear much at all about it in the channel or in corporate IT.’
The way I read it, it was rather harsh, but true. I mean, I thought you were referring to general awareness of Novell in the IT community. It’s true, because I will go for weeks without ever saying the word ‘Novell’ and/or every hearing a vendor/customer/another VAR, etc. mention the word. At least compared to a decade or more ago when the word ‘Novell’ was a commonly used word among the IT community, or at least the IT community I considered myself a member of. Nobody talks about it, and it might be because of my miopic view of the universe where I am the central being, and everything else in the universe radiates outward from the center. But then again it might be a vendor thing, where a vendor won’t talk about things he/she doesn’t sell, but prefers talking about things they do sell. And if they are serious salesfolks they are definitely going to talk about things they do sell. And if it is something worth selling, then there is a worthwhile margin. So even though a client/prospect may want to talk about Novell, a VAR who doesn’t sell it is not inclined to talk about it, so it doesn’t get talked about. I have been at the vendor mixup seminars where you sit next to a potential competitor, like events at IngramMicro in Buffalo and once again – noone is talking about Novell.
So maybe I never talk about Novell, but always listen for it – To learn their benefits/features in case I have to compete against it, or to start selling again if margins return for the small reseller.
But then I realized that in the context of your statement you regretted not asking him about channel-related issues, I think.
But you are right either way: NOONE talks about it anymore. But I think there are still alot of small VARs listening for possible opportunities ALL THE TIME. Maybe one day there will be an opportunities, but good salesfolks don’t work for free. Why? Because they are too busy selling profitable solutions for their customers. That is why. This isn’t rocket science…
HurdyGurdy: Thanks for taking the time to offer some comprehensive thoughts.
Novell’s followers now think “Novell SUSE Linux.” That’s a lot better than 5 years ago, when the world kept talking about NetWare’s decline. That talk is finally over. But now there’s a new problem. SUSE is only about 15 percent of NOVL’s revenue. There’s 85 percent of a story that Novell still has to tell.
I still think it comes down to an application story. We need to see NOVL executives standing side-by-side with SugarCRM, MySQL, Alfresco, ORCL, and other ISVs large and small.
On the one hand, some open source fans still despise NOVL for the Microsoft deal. But on the other hand, SUSE is starting to get some traction with CIOs. Surely, open source app providers would benefit from that traction. I can’t figure out why NOVL and the ISVs aren’t talking more often — in public forums.
Seems like there’s a disconnect.
Joe,
I like what you guys do, and the last thing I want to be is a sourpuss, but to be honest with you I know very few CIOs, but I know alot of company owners and presidents and CEOs and IT Managers. Maybe CIO is more an enterprise term and I am in the SMB space. This means that your predictions imply that CIOs will adopt as they normally do, during an early adoption stage. At the middle stage where everyone and their brother is adopting to the late adopters. Most of my SMB customers are probably in the mid to late adoption phase, so I guess this means by 2011 Novell will make some headway into SMB. This would be contrary to their origins where the early adopters were SMB because the switching costs for data center to LAN conversions were high compared to SMB’s who lacked the infrastructure and adopted a PC/LAN architecture out of the chute and were an easy Novell sell back in the late 80’s, early 90’s, and even those migrating off of minicomputers, which we sold and serviced. Besides, I have been reading the news and the enterprise environments have their issues like: going out of business, as in the car companies/banks/insurance companies. Maybe these CIOs are in survival mode and they may adopt open source in 2011 and this will trickle down to SMB in 2013. So when do you predict Novell will see their payback and growth? 2014?
HurdyGurdy: Thanks for the note. We welcome people who disagree with us — really.
I can’t speak for The VAR Guy — lord knows he has his own opinions. But as a general rule we welcome/strive for an open dialog with our readers. Even if we don’t see eye to eye on all items.
Regarding Novell in SMB: You have a point. For years NOVL has tried to push small business server-type solutions that competed with Microsoft Small Business Server. To the best of my knowledge, none of those NOVL products ever really caught on.
Certainly, NOVL also has challenges in mid-size organizations: Where Novell’s own direct sales force may not have been focused and where Novell’s alienated channel partners (in the late 1990s) moved onto Microsoft solutions.
But there are some undeniable facts. SUSE Linux revenue is growing. ISV support is growing. Hardware support is growing. That means NOVL finally has a play in the application server game.
I know Red Hat remains solidly profitable and NOVL has reported some quarterly losses. But we’re not talking about a company that’s “bleeding” cash here.
Novell has succeeded with SUSE Linux targeting some CIOs. As for the SMB and mid-market, I can’t argue with your points. Novell has had a few hits, but many misses in those areas.
Joe, I wanted to provide some additional info on one of the points you suggested you might have wanted to ask more about:
BrainShare: Specific examples of how training will be handled without this year’s BrainShare.
It was interesting that one of the comments on this podcast mentioned that we stopped doing Advanced Technical Training classes. We actually just concluded a large “ATT Live” event that was very successful. In fact, one partner that attended commented that “this is better than Brainshare” in his post-event survey response.
We are working on our plans for provide an alternative to Brainshare and I’ll happily share more details when our plans are firm. We will use a combination of virtual events for keynote-like content and other “breakout” session types of content that lends itself to a communications toolset. We are also looking at ways to provide technical education in a regional setting. The goal is to provide the excitement, direction, education and some of the direct interaction with Novell product managers and engineers that so define the Brainshare experience. Ideally we would have finished these plans before announcing the change but the logistics of our contracts and our responsibility to help attendees avoid making and then canceling reservations and travel plans called for execution speed on the announcement.
I’ll provide an update when we have firm plans ready to announce.
Scott: Thank you for sharing more details about NOVL’s training strategy, and clarifying the status of Advanced Technical Training Classes.
Our media sites sometimes (often?) criticize IT vendors. But we will always offer an open forum for reader dialog and feedback, and we’ll eat crow when necessary.
First of all, awesome interview, cause no one else has really addressed these questions.
I would love to see more training for partners on Identity and Security products running on SuSE. This is an are where I think Novell has an edge, but hasn’t marketed it properly. If we can see a better link between SuSE, OES, Identity Manager, Gropwise and virtulization, I think NOVL has nowhere to go but up. Then again, I’m no analyst… just my opinion.
Matthorany: thanks for the note. I think Novell will take steps to address the types of cross-product training you’ve mentioned. But there’s a difference between offering that training and getting people to embrace/adopt the training. Time will tell…