Novell recently announced the $200M acquisition of SilverStream, a supplier of authoring tools for developing web service-enabled applications. The acquisition is designed to fill out the third leg of Novell's business strategy focused on network services (directories, management, provisioning), management consulting and integration services (Cambridge Technology Partners renamed Cambridge Solutions) and a development environment for creating, deploying, and managing advanced web-based applications (SilverStream re-branded as Novell eXtend). What does this all mean? On the positive side Novell is collapsing down its vast product family into three areas, although further consolidation is needed in the groupware and supply chain management area. Another big plus for Novell is its positioning away from NetWare as the network operating system of choice; Novell could go one step further by placing NetWare into end of life. And finally, it's good to see Novell filling out its OneNet story with some real products. A year ago the OneNet strategy rang hollow once you peeled back the covers and realized the products were not there to support the vision. Previously Novell aimed its corporate messaging squarely toward the Novell Netware administrators, its bread and butter customer. Today the target is the coveted C-team of senior executives. With the SilverStream acquisition there is still some serious marketing left to do to convince senior IT executives to put Novell on its short list of vendors. With all the consolidation occurring in the IT industry Novell runs the risk of being left behind in the minds of its target audience.

What's missing from the vision is a story with some legs to it. Last year at the time of the Cambridge Technology Partners acquisition the story was products plus services; now it's the above mentioned three-pronged strategy. It's unclear what the connection is among the three legs, and to whom the benefits accrue. Any takers as to when will we hear next about a four-corner strategy (a chair or coffee table, perhaps?) to justify Novell's next acquisition? Last year Novell seemed intent on spending its $1+ Billion cash horde on snazzy consumer-oriented marketing before the well ran dry. This year the expenditure of choice seems to be acquisition, but will the results be any different? If the new Novell eXtend can cut application development time by 50% then certainly the application development teams will pay attention, as will the system integration firms that still do application development. By focusing on the development environment, however, Novell still runs afoul of their nemesis Microsoft that nearly put the company out of business back in the early 90's. Without a better story to attract the C-level customer it covets, Novell risks perpetuating its also-ran status.

One story that Novell could start telling is the importance of security in achieving next-generation web services architectures. It's time for Novell to elevate security as a service in realizing its OneNet Vision. This is a story that will play well among the ranks of senior management. And Novell has the horses to do it with its leading directory infrastructure, provisioning, identity management, and web application security solutions. One challenge is that security does not get the respect it deserves inside Novell; at $60M in direct revenue security represents only about 6% of Novell's total revenue, although that puts Novell larger than 80% of the independent security product companies. But a revenue tally misses the point: security is a critical enabling technology for the next generation services-oriented architecture. Next generation services will power the infrastructure that enables companies to realize the full promise of the Internet era. Now that's a good story to tell.