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Novell acquired, but not by VMware

Despite a report by the Wall Street Journal September 15 that VMware was in talks to acquire at least a piece of Novell, the majority of the company will be acquired for $2.2 billion by Attachmate, primarily known for its mainframe connectivity and terminal emulation software. Another portion of Novell’s IP, some 882 patents, will be sold off for $450 million to a consortium led by Microsoft.

VMware was initially considered a likely candidate to buy at least some of Novell’s IP because of the way the two companies have tightened their alliance in recent years. Last June, VMware said it would standardize its virtual appliances on Novell’s SUSE Linux, which had been modified by Novell a year earlier to run faster on VMware virtual machines.

After the initial reports of talks between VMware and Novell, some users said such a deal would fit VMware’s pattern of expansion into a software stack beyond the hypervisor, which has included acquisitions of SpringSource and Zimbra as well as a partnership with

Reuters followed the WSJ story with a report Sept. 22 which said those talks had stalled, citing a “valuation gap” between Novell and its suitors when it came to products outside the company’s SUSE Linux operating system unit. Still, some industry experts expressed hope at that time that VMware would evaluate acquiring at least some of Novell’s virtualization management IP, particularly within its PlateSpin portfolio.

Meanwhle, “as many as 20 companies initially expressed interest in Novell,” according to the September 15 WSJ report.  This detail takes on a new wrinkle when combined with a line in Novell’s press release about the acquisition today, which says that as part of the $2.2 billion deal, some of its IP will be sold to “CPTN Holdings LLC, a consortium of technology companies organized by Microsoft Corporation, for $450 million in cash.”

We know now that VMware did not become one of Novell’s principal buyers, but if you connect all the dots, it is possible VMware took a look at Novell two months ago, and passed. Also, very little is known about CPTN Holdings at this point, whether it’s what specific patents were bought or which technology companies are included. Thus, VMware at least theoretically could have gained access to some Novell IP today, in a roundabout way (which would also add new meaning to the term ‘coopetition’), even if it didn’t pick up the whole enchilada.

On the other hand, if VMware isn’t a part of the consortium, it will be interesting to see if Microsoft and friends are able to use these patents to disrupt the market, given VMware’s past coziness with Novell and SUSE.

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