Novell just announced an agreement to acquire PlateSpin, one of the players in the management of virtualized resources segment of the virtualization software market for $205 Million (see Sorting out the different layers of virtualization for more information on this market segment). One would have to wonder why Novell made this move since Novell already had a number of products in this space including Novell Orchestrator (see my review of this product in the post Novell’s Orchestrator).
Let's take a moment to review the two companies
PlateSpinHere's a segment of something I posted on PlateSpin a while ago:
I’ve followed PlateSpin for a number of years and have always found the pragmatic, productive approach taken by the company to be refreshing. I had an opportunity to speak with Stephen Pollack, Founder, CEO of PlateSpin, the other day. Here’s a quick summary of our conversation. PlateSpin offers products and services targeting the following systems management areas:
- Data Center Relocation
- Refresh and Consolidation
- Workload Protection for Disaster Recovery
- Application Lifecycle Optimization
What’s clear is that PlateSpin has evaluated the issues a virtualized data center creates and thought differently about the solution. In PlateSpin’s approach, only two tools are needed to accomplish all of these tasks - PowerRecon and PowerConvert.
NovellAs with PlateSpin, I've written about Novell from time to time including the post Overview of Novell’s views on virtualization. Novell can be seen as one of the very early players in the area of storage virtualization and management of virtualized resources. It also offers a collaborative application, GroupWise and one of the leading Linux distributions, SUSE Linux Enterprise Software (SLES). Novell was one of the first to deploy the Xen virtual machine software in a commercially support Linux distribution and has been focused on a more virtualized environment for quite some time.
Snapshot analysisAlthough Novell has been an established player in several of the virtualization software markets for quite a number of years, the company has a tendency to focus on its technology and not tell the market about what it's doing all that often. That's too bad because much of Novell's technology is quite interesting. The company has promised to address this issue time and again only to fall back to their quiet "you have to ask me to find out what I'm doing" approach to marketing.
At this point, Novell does not play in the access virtualization, application virtualization, portions of the processing virtualization, or network virtualization market. They have partnerships with quite a number of suppliers that address these markets and so, they can present a very comprehensive set of solutions. The company has also struck up a technology sharing, joint support partnership with Microsoft that has created quite a brouhaha in the Linux community that has not died down since the company made that move.
When faced with the challenges of extending its reach, most suppliers have to evaluate several paths and select the one that appears most promising. I suspect that folks in Novell's strategic planning group had to evaluate each of the following paths.
- Should the company try to “engineer” its way into a broader portfolio of products and develop new products that help customers go in the direction they want to go? This approach takes time and costs quite a bit of money.
- Should the company build a set strategic alliances with other companies to obtain the needed products and product expertise? This approach, when taken to an extreme, can result in the company taking an “industry followship” position and gathering the reputation that “we’re more me-too than anyone!” It can also mean that the company’s ability to innovate and compete are marginalized.
- Should the company acquire companies that have developed the technology it needs, have the product strategists and engineering talent needed to get back in front of market trends.
It's not at all clear at this point, whether this acquistion was a good move. The key questions that remain to be answered are:
- Will Novell allow the folks at PlateSpin to continue to innovate and support a broad range of operating environments and hardware platforms or lead them gently down the path to supporting only Novell SUSE and Microsoft's (one of Novell's key partners) Windows environments (thus destroying some of the value of the company)?
- Will Novell disrupt some of its own engineering efforts in other areas and try to meld PlateSpin's technology in after the fact?
- Will the Novell corporate culture feel comfortable to those who were part of PlateSpin or will it make them leave and take their innovative spirit elsewhere?
Novell has turned to acquistion many times in the past and had to deal with the issues of different development standards and corporate cultures in order to build a unified product portfolio. I won't drag out a list of acquitions but, needless to say, Novell has only had mixed success with this strategy. (Remember UnixWare, Novell's proposed solution to a fragmented UNIX market?) They've acquired companies at a premium price only to sell them at a lower price later. They've acquired companies that were innovators in key market segments and then let the people who created that success leave to found other companies.
I wish them well, but only time will answer those questions.