Is Novell sale for real this time?

Over 10 years as an IT columnist, I've written, more than once, about rumours that Novell was about to be acquired. For the most part, I offered reasons that the rumour wouldn't become true. This time I'm not ready to quash the rumours.

After the company announced extremely disappointing third-quarter financials last month, a major Novell stockholder (Blum Capital Partners) went public with recommendations of changes that it thought were necessary for the fiscal health of the network company. Among the recommendations were that Novell divest or spin off its consulting services and major product lines, such as GroupWise, and that it pare down the engineering population at the Provo campus by 400 or so people.

Rumours over the past two weeks (which may be formally confirmed by the time you read this) call for the company to lay off 20 percent of its workforce -- more than 1000 people. If GroupWise and/or ZENworks are set adrift -- then the writing will be on the wall that the company is being right-sized for acquisition.

Remember that Novell chairman and CEO Jack Messman "right-sized" Cambridge Technology Partners before it merged with Novell. Messman took over the merged company because the board of directors thought that previous CEO Eric Schmidt (you know, the guy who's made billions of dollars for Google) had let it drift. Messman's Novell hasn't drifted -- it's plummeted like a rock. Stockholders and directors really don't like it when that happens.

But don't expect Messman to be replaced (unless it's on an "interim" basis while a merger deal is worked out), because it's too late for a different vision to right the fortunes of the company without the synergies (and additional funds) that a merger would bring.

So who will the winning suitor be? IBM, perennially rumoured as a suitor, is still prominently mentioned, as are SAP and Microsoft. But I'm putting my money on Silicon Valley pirate Larry Ellison and Oracle. Stay tuned.

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