Mutiny on the NetWare bounty?

Summary:Novell channel partners in the U.S. are as mad as hell. Maybe even mad enough to jump ship for Microsoft.

What's gotten under their skin? The problems are two-fold, say resellers. For starters, the fledgling Novell Consulting division is competing with Novell resellers head-to-head, something the company vowed it would never do. Moreover, in an attempt to capitalise on the newfound popularity of its directory and related products, Novell is recruiting and training "box pushers" at the expense of its long-term services-oriented partners, resellers say.

The biggest problem is Novell's growing infatuation with its high-margin consulting arm. Channel sources say the company has been blinded by the glowing numbers it believes it can earn by billing out its own consultants at an estimated $245 (£150) to $470 per hour. Novell Consulting already has 300 full-time employees and will have more than 400 by the end of 1999. The group had fewer than 50 employees less than a year ago.

"They [Novell Consulting] want to become a Big 6 accounting firm," says one Novell channel partner, who requested anonymity. "Novell's sales people already have to sell a huge percentage of consulting services to make their numbers."

Novell may be riding a resurgence wave now, but both Novell executives and its resellers agree it was the loyalty of the company's channel partners that helped Novell make it through the lean years when NT was beating the pants off NetWare. "The channel was the only thing Novell had. But now Novell has one foot on the banana peel. If they continue like this, everybody will be going over to the Microsoft side," notes Greg Uehling, executive vice president of Novell Platinum reseller Devise Associates Inc. of New York, N.Y.

Uehling is not amused that Novell Consulting recently attempted to hire away Devise's president. Nor is he happy that Novell is attempting to retrain big box pushers to sell services, in an attempt to grow its channel. "There are two problems. Novell's saying 'Let's compete with our channel and strip all the good people away from them,' and 'Let's train others to compete with them,' " complains Uehling.

To Novell's credit, the company is owning up to some of the problems. "We know this [cherrypicking of employees] is happening. We're experiencing evolutionary growing pains with our products and our channel," says Ed McGarr, vice president of business development for Novell Customer Services, the Novell division that encompasses consulting, customer support and education.

McGarr says Novell is taking proactive steps to halt further deterioration of channel-vendor relations and has started communicating its plans to its channel partners. He says Novell will only hire consultants who answer its job ads and only after its HR department does due diligence by checking with its channel partners before hiring away reseller talent. He says Novell is also working on evolving its lead referral model, as well as its model for better differentiating its consulting services from services provided by its channel partners.

"We're in the process of defining what our sweet spot is," says McGarr. "We're aiming to have a higher price point [for Novell Consulting]. The early adopters are willing to pay higher prices. And by working with these customers to get our new products stable, we believe we can broaden the pie for everyone."

Topics: Tech Industry

About

Mary Jo Foley has covered the tech industry for 30 years for a variety of publications, including ZDNet, eWeek and Baseline. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008). She also is the cohost of the "Windows Weekly" podcast on the TWiT network. Got a tip? Se... Full Bio

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