The Hindu : Business : Novell expands India operations

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Thursday, Apr 17, 2008
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Novell expands India operations

Special Correspondent

BANGALORE: Novell, the U.S-based enterprise software company, on Wednesday announced a significant scaling-up of operations at the Novell India Development Centre (IDC) here. A 600-strong team, including 520 engineers, is to be housed in its new two lakh sq. ft. facility at the Bagamane Tech Park. The company also announced plans to invest $100 million in the next three years in further developing the IDC.

Addressing the media, Novell CEO Ronald W. Hovsepian said the Bangalore facility was the second biggest worldwide, the first being the Provo facility in Utah in the U.S. He said the company had been evolving partnerships with companies such as SAP, Microsoft, Accenture, Dell, and IBM among others to develop software solutions “in mixed IT environments”. He pointed out that Novell enjoyed a 70 per cent market share in that portion of the SAP space which run in a Linux environment. “Although we compete with Microsoft at many levels, we cooperate with the company to enable windows to run in a SUSE-based version of the Linux platform,” he said. The company, he said, had in the last two years “realigned” itself to meet the needs of the market.

Novell earned revenues amounting to $932 million in 2007 and had an operating margin of 10 per cent. Asked if the possibility of U.S. recession bothered him, Mr. Hovsepian said revenues from Linux-based products grew by 65 per cent in the first quarter of 2008 (January-March).

“The situation will be choppy in the next few months, but we will do well,” he added. He admitted that “pricing pressure” might increase, but pointed out that Linux-adoption might be “a catalyst to improve efficiency and cut costs.”

Naresh Shah, Managing Director of the IDC, told The Hindu that the two main channels of software development — proprietary software and opensource — had diverged. Novell’s stated strategy, he said, “is to straddle the middle ground between the two by offering mixed source products and services across platforms.”

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