Ok, you've heard it here first..
Thursday August 12 12:58 AM ET
AOL, Novell Team Up On Instant Messaging
By Duncan Martell
SAN FRANCISCO (Reuters) - America Online Inc. (NYSE:AOL - news) and Novell Inc.
(Nasdaq:NOVL - news) are teaming up to integrate the AOL Instant Messenger service with Novell's
popular directory software that is used to manage and control access, programs and other applications
on business networks, Novell said Wednesday.
The agreement, signed at AOL's headquarters in Virginia Wednesday, is a major coup for the once-struggling Novell and
highlights AOL's aggressive push to move AOL Instant Messenger, or AIM, into the corporate market from its now-prevalent
consumer use. AIM has 43 million users, the largest of any instant messaging software and far outstrips the number of users of
archrival Microsoft Corp.'s (Nasdaq:MSFT - news) offering.
For Novell, the deal highlights the growing importance of its directory software, known as NDS, as networks and the Internet
grow and become increasingly complex. According to market research firm International Data Corp., 80 percent of Fortune
1000 companies now using directory services to manage and secure their networks already rely on NDS. Revenue for
directory services is forecast to reach $5 billion by 2000, according to IDC.
Together, the companies said, the combination represents the powerful combination of AOL's success in creating easy-to-use
ways of using the Internet with the robust offerings of Novell's NDS, which will allow for business users to zap messages back
and forth securely, using encryption.
``Instant messaging initially took off with individuals but is now moving into the enterprise (big business) and we're using it now
at Novell,' said Michael Sheridan, head of Novell's strategic businesses unit, in an interview.
Novell and AOL will also collaborate to build a business-to-business portal on the Internet targeting Novell's vast customer
base. The two will share revenues, Sheridan said, and the site may garner revenue from advertising, offering insurance and links
to office supply stores, for example.
``Overall, this is by far our biggest deal in the public Internet space,' Sheridan said.
The agreement comes as AOL and PC software juggernaut Microsoft are embroiled in a bitter battle over instant messaging.
Microsoft recently introduced its own instant messaging software, called MSN Messenger, and allowed its users to talk to
AIM users and those using AOL's online service.
AOL responded by shutting MSN Messenger users out if its network, claiming it was a violation of their network and of their
users' privacy. Since then, AOL has blocked every workaround Microsoft has engineered.
Sheridan, who called the collaboration ``a marriage of compatible strengths' said that Novell's chairman and chief executive
Eric Schmidt started the discussions several months ago at a conference.
``Integration of AOL Instant Messenger and NDS will bring business customers a new level of manageability and control for
deployment of instant messaging within their organizations,' Schmidt said in statement.
International Business Machines' Lotus Development Corp. business software division also joins the agreement, by integrating
AIM into its Sametime users. Sametime is a real-time collaboration software product.
``Businesses are going to take this and adapt it to many different uses,' Sheridan said. Of its 80 million-strong installed base,
Sheridan estimated that as many as 40 million, or half, of those, have access to NDS technology.
Business users of the Novell-AIM instant messaging service will gain access, restricted by network administrators, to the entire
AIM community, Lotus Sametime users and the 17 million AOL users.
``With this agreement, as well as our collaborations with Lotus and others, we continue to build the world's leading instant
messaging community both at home and in the workplace,' Bob Pittman, president and chief operating officer of AOL said in a
statement.
Novell is also benefiting from a delay in a competing offering to be released by Microsoft, called Active Directory, as part of its
Windows 2000 software.
Since Schmidt's arrival in 1997, Novell has recently begun charting what analysts called a credible comeback. In its second
quarter ended April 30, net income rose to $38.7 million, or 11 cents a share, from $19.3 million, or 5 cents, a year ago. The
results topped analyst expectations by a penny, as revenue surged 20 percent to $315.7 million from $262.3 million.
Novell shares Wednesday closed at 23 15/16 on the Nasdaq, down 1/16. |
