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Novell tightens Netline partnership

Extends deal to sell software for e-mail and other server functions from Netline Internet Service.

Novell has extended a partnership to sell software for e-mail and other server functions from Netline Internet Service, the companies said Thursday.

Netline's software, an open-source package called Open-Xchange, has server modules to host e-mail, calendars, discussion groups, document sharing and address books. It competes chiefly with Microsoft Exchange, but also with other proprietary packages including IBM's Domino and Novell's GroupWise.

Netline got its start by selling its technology through SuSE Linux, the German software company and No. 2 seller of the open-source operating system. Novell acquired SuSE in January, and it wasn't clear how the acquisition would affect the product, called SuSE Linux Open Exchange, or SLOX, because it competed with Novell's in-house software.

Now that question has been answered, said Netline CEO Frank Hoberg. Novell will move from SLOX to Open-Xchange and will resell it globally instead of just in Germany, he said. Novell will provide support, maintenance and services, but now Netline will handle all development work--and consequently get a larger fraction of revenue from each sale, Hoberg said.

Making a cleaner separation between SuSE and Open-Xchange also means that Netline now may try to sign deals with other Linux companies such as No. 1 Red Hat, Hoberg said.

When the deal goes into effect in the first quarter of 2005, Novell will offer Open-Xchange and Groupwise to distinct customer groups, Hoberg said. Novell will offer Open-Xchange to customers with 1,000 to 2,000 employees, to customers wanting an open-source package, and to customers that need server software that works with Microsoft's Outlook desktop software.

Like Microsoft but unlike some in the open-source realm, Netline charges per-user licenses fees. Hoberg isn't worried about a backlash, though. "As long as we're 50 percent less than Microsoft, it's OK. That's the sales pitch for us," he said.

Over the last six months, Netline's 15 developers have modified the software so it runs on any Linux system, not just those using x86 chips such as Intel's Xeon. Within the next year, Netline plans to expand its product support to include IBM's Power processors, used in its pSeries and iSeries servers, Advanced Micro Devices' Opteron with 64-bit x86 extensions and Intel's Itanium processor, Hoberg said.