Internet business solution provider Novell plans to add a third
prong to its Internet-products strategy, dubbed one Net, by
acquiring SilverStream Software, for which it has offered to pay
$212m (£145m).
The acquisition of SilverStream will extend Novell's offerings,
enabling it to help enterprises deploy advanced Web
applications.
A move into the Web services market will add a third prong to
Novell's one Net plans besides its Cambridge Technology Partners
consulting division and the cross-platform infrastructure provided
by its security and directory technologies.
"Today's announcement moves us firmly into the category of major
player in Web services," Novell president and chief executive Jack
Messman said.
SilverStream executives also saw the proposed deal as a major coup
for their company.
"This takes SilverStream to a new level we would not be able to
reach on our own," said SilverStream president and chief executive
David Litwack.
Both boards of directors have unanimously approved the deal, and
SilverStream shareholders that hold 20.33% of the company's shares
have agreed to tender their shares, Novell said. The deal requires
the approval of the holders of 90% of the shares, and still has to
clear the usual regulatory approvals, it said. If shareholders
support it, the deal could be concluded in July.
Novell plans to rebrand SilverStream's eXtend software line as its
own and Litwack will become a senior vice-president of Novell if
the buy out is successful.
SilverStream's technology, particularly its Web services creation
and deployment tool eXtend Workbench, gives Novell the kind of
application development tools that will help drive the company's
Web services strategy, according to analysts.
"It's a powerful set of development tools that tie together Web
services and existing systems, giving companies a great return on
their assets investments," said James Governor, industry analyst at
Illuminata in London.
Governor praised eXtend Workbench's ability to wrap AS/400 and
mainframe systems for use with Java and Web services, as well as
its XML transformation functionality.
"Novell doesn't want to get into the business of selling a "rip and
replace" solution, given its huge installed base," said Governor.
"SilverStream's products allow them to integrate."
Novell emphasised that Web services is a nascent market, in which
open standards and integration are key. One big advantage for
Novell under the deal is that the eXtend technology is built on the
J2EE standard (Java 2 Enterprise Edition), which allows companies
to build applications that run on any platform, company executives
said.
Messman said he does not expect any significant number of
redundancies if the deal goes through.