Novell, IBM to Unveil Deal Linking Network Software

IBM Corp. and Novell Inc. will unveil a pact today, using Novell network software to link many office computers ready to handle electronic-commerce operations.

The two companies plan to announce the pact at Brainshare, the annual Novell software developers’ conference in Salt Lake City this week. Resulting products are expected to ship within two quarters, officials said.

The deal ties together NetWare, Novell’s network operating system used to link tens of millions of personal computers running on office networks, with IBM’s WebSphere software for setting up e-commerce businesses on the Internet.

The agreement also significantly extends the potential audience for IBM’s e-commerce software to the millions of office PC users who run NetWare.

The combination should allow NetWare, one of the industry’s broadest software franchises, to compete effectively as companies race to build networks able to handle a surge in both internal office data and Internet traffic.

The IBM-Novell pact addresses an area that rivals such as Microsoft Corp. and America Online Inc.’s Netscape unit also heavily target.

Meanwhile, Dell Computer Corp., the No. 1 direct seller of personal computers, plans to use new software from Novell to build machines that store data on computer networks, pushing into a fast-growing market.

Beginning next month, Dell will include the Internet caching system from No. 2 networking-software maker Novell in the line of PowerEdge servers that it sells to phone companies and Internet providers.

Caching technology reduces the time and cost of retrieving data from the Internet by storing frequently used information on the computer servers that run Web sites.

Dell wants to sell networking-related gear as PC sales slow.

The company’s decision to make network storage devices also will raise awareness of the equipment, which may benefit Network Appliance Inc. and closely held CacheFlow Inc. in the short term, Staten said, though Dell will ultimately drive down prices for the gear.

According to a Dataquest report, the market for caching appliances is expected to grow to about $750 million to $800 million in 2003 from about $50 million this year.