Novell not for sale, but perhaps should be

Novell has rushed to quash rumors that it's considering selling some or all of the company, but the company makes more sense in pieces.

Last week rumors swirled that Novell was planning to put some or all of its assets on the auction block. The rumors derived from J.P. Morgan analyst John DiFucci's misinterpretation of Novell CFO Dana Russell's comments, suggesting that Novell "entertained the possibility of breaking out some parts of or selling the entire company, in order to maximize shareholder value given the current depressed valuation levels."

Novell has since denied the implication that it's for sale. But it shouldn't be so hasty.

As The Register's Timothy Prickett Morgan suggests, a company should "never say never" about selling its assets, particularly when Novell has struggled to grow a profitable business.

Or, in Novell's case, when a company has assets like Groupwise that dilute the company's focus and do little to improve its top-line revenue growth. Novell's Linux and Identity Management businesses have potential . Its Workgroup business, on the other hand, continues to slide every single quarter.

While Russell is right to dispel public rumors of Novell being sold, the reality is that Novell should be considering the sale of some key assets, and likely is. Novell would be foolish to do otherwise.


Follow me on Twitter @mjasay.

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About the author

    Matt Asay is chief operating officer at Canonical, the company behind the Ubuntu Linux operating system. Prior to Canonical, Matt was general manager of the Americas division and vice president of business development at Alfresco, an open-source applications company. Matt brings a decade of in-the-trenches open-source business and legal experience to The Open Road, with an emphasis on emerging open-source business strategies and opportunities. He is a member of the CNET Blog Network and is not an employee of CNET. You can follow Matt on Twitter @mjasay.

     

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