Novell Coughs Up $205 Million for Canadian Virtualization Startup PlateSpin

2/25/08Follow @wroush

Virtualization of server resources—allowing corporate IT managers to consolidate workloads onto fewer machines—is the big technology wave sweeping the corporate data-center market. Waltham, MA-based Novell (NASDAQ: NOVL) is an important player in that market, but its products are focused around identity management (a legacy of the company’s original focus on server operating systems and directory services products), the Linux operating system (an area it entered with the acquisition of Ximian in 2003 and SUSE Linux in 2004), and workgroup collaboration tools (a focus bolstered by the company’s acquisition two weeks ago of Maynard, MA-based SiteScape). Now, eager to avoid being left behind in the virtualization race, Novell has acquired yet another company—Toronto-based PlateSpin, which makes workload management software for virtualized data centers.

The all-cash acquisition, which will cost Novell $205 million, is “a true milestone in Novell’s history” and “provides a critical piece in completing our commitment…to delivering the best IT management software for both physical and virtual environments,” Novel CEO Ron Hovsepian said in a telephone press conference this morning.

Stephen Pollack, CEO of PlateSpin, said the company offers three key technologies: a visual planning-and-analysis tool for managing data center resources, a workload management package that makes software jobs portable across virtual and physical servers, and a hardware appliance for disaster recovery with virtualized workloads. “IT executives consistently list optimizing, virtualizing, and controlling their heterogeneous IT environments as the core of what keeps them up at night,” Pollack said. “The reason I and the PlateSpin team are so excited about becoming part of Novell is that it already has a successful strategy in data center management, and now we can truly deliver the next-generation infrastructure for flexible data centers.”

Hovsepian said that with the PlateSpin acquisition Novell “will be in a unique position” to help customers manage and protect virtualized workloads, use resources more efficiently, cutting the cost of deploying new applications, and control the sprawl of applications that can run over virtualized systems.

Bringing in PlateSpin could help keep Novell competitive as a growing number of enterprise software companies offer either virtualization systems (including VMware, Microsoft, Oracle, Citrix, Virtual Iron, SWsoft, Qumranet) or software for managing workloads on virtualized systems (including Incipient, Vkernel, AutoVirt, GlassHouse, to name just a few local entrants). A venture-backed startup founded in 2003, PlateSpin has about 220 employees in the Toronto area. Its investors included Insight Venture Partners, OpenView Venture Partners, CastleHill Ventures, Covington Capital, Skylon Capital, and Four Quarters.

Wade Roush is a contributing editor at Xconomy. Follow @wroush

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  • http://www.novell.com John Dragoon

    Wade,

    You’re right about our infrastructure software for identity management, Linux and collaboration. You have missed a major 4th business unit and focus for us which is our Systems and Resource Management business and ZENworks product line. The PlateSpin acquisition is core to extending our heterogeneous IT management capabilities. Prior to this acquisition, we already had a leading virtualization platform (SUSE Linux with Xen hypervisor) and the management tools to handle (ZENworks Orchestrator). Now we have a leading solution for streaming workloads to virtual and physical environments AND a tool to discover which workloads should be virtualized. It’s a great fit and I’ve written more on my blog at http://www.novell.com/company/blogs/cmo/

    Thanks.

    John Dragoon

  • http://www.xconomy.com/author/wroush/ Wade Roush

    John,

    Thanks for your comment. I wasn’t fully up to speed about Novells’s four business units and your comment and your blog post definitely help to explain how the Platespin acquisition rounds out the company’s set of products around virtualization. Good luck.