Acquisition Starts Novell Down ASP Track

Network software giant Novell Inc., which today said it would acquire application service provider (ASP) JustOn Inc., intends to become an ASP itself and will announce specific plans to do so sometime this year, a company spokesman said.

"We're going to announce our ASP strategy later in the year," said spokesman Jonathan Cohen. But he said the reason Novell announced today that it plans to acquire Internet file management company JustOn is to build up the portfolio of technologies required to enter the ASP marketplace both as a supplier and a direct participant.

"We're looking at both opportunities: to provide the services for consumers and businesses and to also make technology available to ASPs, including our partners," he said. "We want to do both."

Terms of the JustOn acquisition weren't disclosed in the companies' press release.

Privately held JustOn, based in Palo Alto, Calif., allows users to store and share files at a secure Web site using any Web-connected device.

Novell has long been the vendor most synonymous with file management within enterprises, but not over the Internet. Novell will combine JustOn's capability with its directory, caching and proxy server technologies to sell to ASPs and power its own ASP ambitions.

Novell's desire to extend its technological capabilities into the ASP role is understandable, said Jamie Lewis, president of Midvale, Utah, analyst firm The Burton Group. But Novell will now face the same delicate challenge facing other vendors such as Oracle Corp., which is trying to sell its products to ASPs while at the same time competing with them. Similarly, Microsoft Corp. is licensing Office 2000 to ASPs while offering it directly to small businesses.

Until Novell's announcement later this year, it's impossible to assess how receptive users will be to the idea of using Novell as an ASP, Lewis said.

"There are a large number of variables,'' he said. Among them are pricing, service offerings, service level agreements and security.

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