February 2, 2001 8:55 AM PST

Novell ventures into content management

Software maker Novell is heading into a lucrative field with a new venture that will tie its well-known caching technology with content management services aimed at helping businesses speed and manage the delivery of information over the Web.

Novell, based in Provo, Utah, on Friday launched Volera, a new company targeting the emerging Web-content networking sector. Nortel Networks and Accenture (formerly Andersen Consulting) have agreed to take equity positions in the new company. The trio of investors expects to pour more than $80 million in cash and consulting services into the upstart.

The content-delivery business has exploded in the past year, as a long list of companies have popped up with different takes on the idea of eliminating Internet bottlenecks and speeding download times. Despite increased competition, companies such as Akamai Technologies, which recently posted better-than-expected fourth-quarter results, are still playing in a market poised for high growth.

Other players have recently been faced with tough times, including CacheFlow and Network Appliance, which focus on providing Internet caching appliances that help companies speed the distribution of information over the Web.

On Thursday, shares of CacheFlow took a beating after the company warned that third-quarter sales will miss estimates. CacheFlow also sees a wider-than-expected loss. The company said its long-term outlook is strong, but that macroeconomic uncertainty and delays in spending from its customers have dented revenue.

Newly created Volera is aiming to deliver cache-flow technology and services that will effectively help customers with the management and speedy delivery of content, media and Web-based applications.

Novell, which has been busy branching out from its core caching software to other areas, including Web-hosting and application-hosting services, also has been hit with challenging financial times. The beleaguered software maker recently unveiled a $60 million marketing mission in an effort to boost its battered image and confidence.

The company said it has been working with Accenture and Nortel for the past six months in planning some of Volera's core offerings. In addition to their minority stakes, both Nortel and Accenture intend to enter into joint-development agreements with the new venture. Accenture said it's providing services that support Volera's sales, customer services, support and business development.

The Novell board of directors has approved a plan to make Volera a publicly held company, with the ultimate goal of distributing Novell's interest in the upstart to its shareholders. Plans for an initial public offering are expected as early as next year, the company said.

As a subsidiary of Novell, Volera will see its revenue and expenses folded into Novell's financial statements.

Novell CEO Eric Schmidt has taken on the role of Volera's board chairman, and Simon Khalaf, formerly general manager of the Novell Net content group, has been named president. Drew Major, formerly chief technology officer of that group, has been appointed the chief technology officer for Volera.

The new company is based in San Jose, Calif., and has additional offices in Orem, Utah, and Berkeley Heights, N.J.

 

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