The move, announced Tuesday, replaces Yahoo's previous default directory server provided by iPlanet, the Web services alliance between AOL Time Warner's Netscape Communications subsidiary and Sun Microsystems. Yahoo said it will continue to support iPlanet's directory server software for customers of its corporate portal service that request it.
"This expanded relationship with Novell was an internal decision that was made because of the opportunities that we will now have to be supported by Novell's global sales, support and consulting infrastructure when deploying Corporate Yahoo solutions," Ken Hickman, director of products for Corporate Yahoo portal solutions, said in an e-mail.
The deal marks a potentially significant win for Novell, which has been struggling with a makeover aimed at transforming the company from an operating system outfit into an Internet-based software provider. The company has banked heavily on its eDirectory server product, based on LDAP (Lightweight Directory Access Protocol), which competes with products from iPlanet, IBM, Oracle and Microsoft, among others. LDAP is a software protocol that lets anyone locate resources such as files and devices in a network.
Yahoo's corporate portal is marketed to large companies interested in help building Web sites, online communities and other Net-based services. It is used by 26 major corporations, according to Yahoo.
Jamie Lewis, an analyst with the Atlanta-based Burton Group, said the deal is a win for Novell, but added, "It's not a magic bullet."
"They need to string together several deals like this one," he said.
Directory software serves as a sort of white pages for a variety of information about computer users, their systems and software, and other network-attached technology equipment such as routers or printers. It also serves as a central database that can track what computer users can access. In the case of Yahoo, Novell's technology will likely be used as a de facto traffic cop that governs what corporate information employees can see.
Yahoo's decision to make Novell's eDirectory the default in its corporate portal service comes as iPlanet is struggling to clarify its mission. Originally conceived as a way for Sun and Netscape to market Web server software to telecommunications companies and other large corporations, the partnership has disappointed. Last month, iPlanet announced it would lay off 500 employees in conjunction with an AOL reduction.
Sun executives have indicated strong commitment to iPlanet, outlining plans in which it would be used to develop services to combat Microsoft's HailStorm strategy, one element in that company's .Net initiative to deliver software over the Internet to devices.
Just last month, Sun announced that iPlanet plans to introduce software to integrate various Web services. It also dominates the directory server market, with 60 percent of Fortune 100 companies using its products, according to research firm Meta Group.
Now that bright spot could be dimming, as iPlanet takes on newly invigorated competition from Novell. Microsoft's Active Directory, which comes installed with its Windows NT and Windows 2000 server operating systems, is also seen as a potential long-term winner in this market.
Analysts said they believe Sun is poised to take a much stronger role in the partnership.
"The recent changes and the layoffs show (iPlanet has) sputtered considerably," said Mark Driver, an analyst at research firm Gartner. "In order for the company to remain viable over the long term, Sun will probably have to take it over."
News.com's Jim Hu contributed to this report.