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Novell launches content networking subsidiary

Novell launches content networking subsidiary

Novell on Friday announced the formation of a new subsidiary that will target the content networking market.

The new company, Volera, will integrate caching and content management services and will have equity partners of Nortel Networks and Accenture, the former Anderson Consulting, Novell said in a statement. The move represents a significant step for Novell's transition to a Net services business, the company said.

Novell could not have gone it alone on this endeavor, said Eric Schmidt, Novell's chairman of the board and chief executive officer, during a conference call. It simply does not have the channels, sales structure or the brand that Nortel will be able to assist with, he said.

"For both perception reasons, as well as the business reasons, we didn't have a choice," Schmidt said. "They (Nortel) bring a lot to the party because of their sales, size and breadth."

The agreements between Novell, Nortel Networks and Accenture call for the companies to provide Volera with more than $US80 million in cash as well as consulting services. Novell also will contribute technology and resources within the company's Net Content Services Group. The products Novell transferred to Volera are all in early stages of market adoption and represent less than 1 per cent of Novell's fiscal 2000 revenue of $1.16 billion, the company said.

Nortel will also enter into joint development and distribution agreements with Volera that are yet to be announced. The first may come as early as next week, Khalaf said. Accenture has been working with Novell and Volera personnel for more than six months to plan Volera's initial Internet content services, the companies said. Accenture will assist in supporting Volera's sales, customer services, support and business development.

Volera estimates it holds a 17 per cent share of the worldwide market for cache appliances, according to the company. During 2001, the company plans to offer content management, streaming media and end-to-end networking technology.

The new company will be headquartered in California. Novell's board of directors has approved the initial plan to make Volera a publicly held company, and it is the goal to distribute Novell's interest in the company to its shareholders in the future, the company said.

Volera's revenue for fiscal 2001 is expected to be less than $30 million, said Dennis Rainey, Novell's chief financial officer, during the teleconference.


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