The Virtuous CIO  

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March 7, 2010 — Revolving Vendors

A couple of brief articles in the press caught my attention last week. It seems Novell is being attacked by an investment group desiring to make a hostile takeover. From an investor's point of view, this is an opportunity to unlock the value of a business, as they say. Novell is a cash rich company with a level or declining business. In other words, they are just muddling along. I have not invested in Novell, nor do I intend to. However, I am a Novell customer. When events like this take place, CIOs take notice, as well they should.

In the highly diverse information technologies industry, there is always a certain amount of churn, otherwise known as Mergers & Acquisitions. American business has come a long way from the time when IBM (or one of the BUNCH*) was the sole vendor of record for technology in most companies. The average IT organization probably now has hundreds of vendors which are more or less active. Every year the CIO has to dust off his crystal ball, read the tea leaves, or otherwise put careful thought into the future of a given vendor and its relationship to the business. Considering the highly placed position of Mr. Murphy in each organization, the vendor acquisition will affect a critical piece of your infrastructure.

What do you do when a critical piece of your infrastructure is under threat because of a weak vendor, or an acquisition? As I come to the end of a long, productive middle-age and peer ahead into the valley of senescence, there is little that keeps me awake at night; but events like this tend to focus me during my waking hours. Most of the time the key product or service you are relying upon in your data center generates important revenue for the vendor. The group making the acquisition will be paying attention to all sources of income, as they will likely be searching for ways to pay for the huge costs incurred. The product may be sold to another company or investment group to generate cash, but once again everyone is interested in the continuing revenue stream.

So, in the short term, I don't worry much about a particular product or service going away. Nobody wants that to happen. On the other hand, you are obligated by dint of due diligence to look carefully at the changes and determine where your product is going to be in five years.

We utilize a lot of Novell products in our computing infrastructure. On the face of it, considering Novell's performance over the past decade, this seems unwise. Keep in mind, though, these products are working in an area where there is a large degree of interoperability, and open APIs. If GroupWise went away, for example, we could plug-in another e-mail system, or perhaps outsource. It would be expensive, and involve a fair degree of pain, but such conversions are straightforward. I would prefer not to have to do this; I do not like GroupWise, but I hate everything else more.

File and print services represent an interesting question. A move from NetWare to Windows file and print would be difficult from a management perspective, but not technically tough. Reading the trends in this area indicate to me that over the next decade the traditional file services will become obsolete as organizations move to enterprise content management systems. So, therefore, it doesn't help me to worry about file services, because the conversion is probably going to happen anyway.

Directory Services is the pinch point where change becomes extremely painful. Novell eDirectory is the crown jewel of Novell's business, and the product most likely to survive this period of turmoil. Nonetheless, I view it as a major risk in the long term. Because we have standardized on LDAP for all of our identification and rights management transactions, in theory we could unplug eDirectory and replace it with Active Directory. The pain focuses on two areas: first, there will be extensive retraining required; second, the administrative overhead of AD is almost certainly higher than that of eDirectory. I would have to add headcount.

I selected Novell for the today’s discussion not because they are the most egregious example of vendor turmoil, but rather because they were in the news this week. If you are a surviving customer of Oracle's acquisition of Sun, or perhaps you are wandering in the uncharted wastes between Nortel and Avaya, you will know exactly what I'm talking about. These things happen all the time, and the competent CIO rapidly learns how to manage change of this sort.

*The Pantheon of IT gods during the 1950’s and 1960’s: Burroughs, Univac, NCR, Control Data, Honeywell. Because of IBM’s commanding position in the industry, some wag coined the reference to “IBM and the BUNCH.”