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1/20/2006
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Novell Plans Corporate Licensing Overhaul

A new option will let customers buy licenses on a named-user or per-device basis, paving the way for transaction-based pricing.

Novell plans to move to a new licensing model that could impact partners serving corporate accounts.

Key to the new model, effective March 1, is the elimination of the Waltham, Mass., company’s Corporate Licensing Agreement (CLA) and the addition of a new option that allows customers to buy on a per-named-user or per-device basis.

Chris Howden, director of Pricing & Buying Programs at Novell, said the elimination of the CLA paves the way for more transactional-based purchasing. And the new option letting customers buy licenses on a named-user or per-device basis will help Novell and its partners sell more products, he said.

Although some partners worry the switch could push CLA accounts to Master Licensing Agreements (MLAs)—which are priced directly by Novell—few expect much damage to channel partners.

Novell sells MLAs directly to large customers through large account resellers, while other partners currently sell Volume Licensing Agreements (VLAs) and CLAs. Under the new plan, those partners will sell only VLAs.

“Eliminating the CLA will simplify the licensing side of the sales process and allow us to be more efficient in selling Novell products to our customers,” said Paul Anderson, president of Novacoast, a Novell Platinum partner in Santa Barbara, Calif. “I haven’t seen anything that partners would be concerned about.”

As part of the licensing overhaul, Novell also will introduce bundles that combine product upgrades and technical support.

It is under pressure to move more NetWare customers to Open Enterprise Server or SUSE Linux, but customer reluctance to switch Windows-based line-of-business applications and aggressive migration offers from Microsoft are complicating those efforts, sources said.

One Novell partner said the elimination of the CLA will push those customers to MLAs and Novell direct pricing, or to VLA partners for smaller transactions. But there is no panic.

“The [customers] can move upstream or downstream,” said Ken Colton, director of operations for Polar Systems, a Portland, Ore., Novell Platinum reseller. “Novell is saying people who have been CLAs can become MLAs if their buy increases, or they can go in the other direction. It may impact large [licensing] providers, but the effect will probably be neutral.”

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