Novell's Asia Pacific region may be going well, but the software company needs to be acquired to compete with the "big boys", according to an industry analyst.
Speculation about Novell's future has been rife in recent weeks amid retrenchment and takeover rumours, following disappointing third-quarter results.
Geoff Johnson, research director for Gartner, said: "[Novell] Asia Pacific has a positive revenue stream, but in North America Novell has been challenged, particularly from Windows 2000."
"It doesn't really matter what is happening here as the engine room is in the US."
Novell announced an 83 per cent drop in its third-quarter net income to $US8.6 million on revenue of $US270 million.
"We forecast problems for Novell back in 1997. Obviously Novell needs to do something after disappointing quarters; it needs to be acquired but there aren't too many buyers," Johnson said.
Johnson attributes most of Novell's concerns to players like Microsoft and IBM moving into their traditional markets. "It's hard to retain market share when you have those kinds of dominant players competing with you."
Johnson was sceptical of rumours of an IBM takeover and talk of retrenchments, nonetheless he thought if Novell is to survive it will probably look like a "professional services organisation", as it needs to change its function.
Cliff Smith, managing director Australia and New Zealand for Novell, refused to comment except to say: "From our point of view growth has been very good in our region, which is somewhat different to what is happening in the rest of the world. We don't have any announcements on the horizon."
Sydney NetWare user group president Geoff May said: "These sorts of rumours have been on and off for years."
"There is an underlying strength in the product. The product is rock solid, however, Novell hasn't always made the best business decisions."