Novell to Exit Desktop Applications Market
October 1995
Pressed hard by its negative impact on stock price and perceived company value, Novell has announced that it intends to sell its Business Applications Division, completing a sale by January 1. In case the reorganized Novell is too complicated to easily recall, that means WordPerfect, the Perfect Office Suite and the rest of the desktop applications, but not GroupWise or the other multi-user, server-based applications also acquired from WordPerfect Corporation. (See the visual aid below.)
GroupWise, in fact, is doing just fine, and has enjoyed >100% growth rate in the last year. It is the centerpiece for Novell's network-centric Smart Network/Networked Applications strategy.
The BusApps, as a group however, had begun to fall from grace at a precipitous rate. In the 3rd Quarter of 1995 they represented 16% of Novell's total revenue and generated no profit:
Bus Apps Revenues in 1995, by Quarter
1Q95 $126 Million
2Q95 $144 Million
3Q95 $ 88 Million(These figures do not include GroupWise.)
Bob Frankenberg candidly stated that the pressure from BusApps fading fortunes was a distraction from the main strategy and that transferring it to an appropriate buyer who can focus on this business would be good for WordPerfect customers and good for Novell, permitting it to place all its focus on its core businesses and to seek new business opportunities which were more closely related to its ongoing strategy.
Rumors on who the buyer might be are numerous; Novell, of course, declines to comment.
A more detailed opinion piece will follow, in which we will speculate on both who might buy BusApps and how a refocused Novell will play in the market.
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Entire contents © 1995 by Amy D. Wohl. All rights reserved. Reproduction of this publication in any form without prior written permission is forbidden.