Netscape Communications Corp has long looked as if it needed a major acquisition to put some solid revenues behind what until recently was a decidedly over-optimistic market capitalization – the shares are a long way off their highs now – and Novell Inc appeared to be the most attractive candidate to enable it to turn […]
Netscape Communications Corp has long looked as if it needed a major acquisition to put some solid revenues behind what until recently was a decidedly over-optimistic market capitalization – the shares are a long way off their highs now – and Novell Inc appeared to be the most attractive candidate to enable it to turn its inflated share price into hard assets (CI No 2,984). It has probably missed the boat on both counts now, but it is getting into bed with Novell, not by acquiring it but by forming a joint venture company that will combine IntranetWare with its own SuiteSpot applications suite to create what is being billed as a complete answer to IBM Corp’s Lotus Domino and Microsoft Corp’s Exchange. The new company, to be called Novonyx Inc, is to develop a version of the SuiteSpot package of communications and collaboration software to run under the IntranetWare network operating system. Novonyx will be set up near Novell’s Provo, Utah headquarters and the products it develops, the first of which are due to be delivered within a few months, will be distributed by Novell. The two declined to disclose financial terms or specify the stake of each company in Novonyx. The new company has been more or less on the drawing board for about six months, when Joe Marengi, president and chief operating officer of Novell and Jim Barksdale, president and chief executive of Netscape met and began to discuss the possibility of such a venture. The stated reason for the existence of Novonyx , as opposed to a joint development deal, is a desire to create an entity which can avoid the inevitable conflicts between the parent companies and is small, very focused and able to provide speed to market with its products. Novonyx will have the full technological resources of both parent companies, but all three will be developing products independently of the other two. The new company will seek executives and employees from Novell and Netscape, as well as other computer firms and the non-technical community. Staff at Novonyx is projected to be in the range of 50 to 100 after a year. The venture will be a privately-held concern with an undisclosed equity structure involving all three companies. The timing of the announcement, Novell claims, has nothing to do with its recent appointment of Eric Schmidt as chief executive, but instead was intended to coincide with this week’s BrainShare conference. Novonyx hopes it will enable the customers in charge of the roughly four million servers running Novell’s operating system the ability to avoid switching to other platforms, such as Windows NT. However, both Novell and Netscape say they will continue to provide products for NT and Unix. With the Novonyx announcement behind it, Novell plans to announce Monday another partnership, this time with Oracle Corp. A spokesperson at Oracle said the announcement involved a deal to jointly provide both internet and intranet solutions.