What Will Novell Do with Workload Converter PlateSpin?

Feb.27.08 | About: Novell, Inc. (NOVL)

By Kris Tuttle

Kris Tuttle submits: The private virtualization company PlateSpin was purchased by Novell for $205M this week. Our notes from a briefing in October of 2007 are as follows:

PlateSpin Inc was formed in 1999 and brought some virtualization provisioning products to market. Basically it was just too early and the company folded in 2002. VP of Product Development formed PlateSpin LTD and became the CEO in 2003.

The physical to virtual conversion model sold well as companies needed help to convert their workloads over. Their core product, PowerConvert, decouples the software stack from the physical and virtual servers and provides tools similar to what you would find on a mainframe to support warm standby, job control, back-up and so on.

PowerRecon is a newer product that acts as an advisor on where to move workloads. This is not really an automatic tool now but it could evolve into one. There are two pricing models: usage-based at $175/conversion and $1.75/server/day and also perpetual. About 70% of the business today is usage-based with the balance perpetual. Must customers start out with usage and as they use it more and more they go perpetual (they were 100% usage-based not long ago).

The most common entry point is for disaster recover and server consolidation projects. The out of the box tools one gets from a VMWare (NYSE:VMW) or Microsoft (NASDAQ:MSFT) only go so far and often work well only in one direction versus in multiple directions and with different platforms.

Another aspect of PowerRecon that they are hoping to add is virtual infrastructure additions which help clients discover many servers they didn’t know about, enable service-based delivery pricing and so on.

The company has grown from 15 people and 12 customers in 2004 to over 180 people and 3,500 customers today. I got the feeling that they might be needing money now but couldn’t determine if it was another round or a potential filing. Insight appears to be the lead investor.

What Novell will do with these guys remains to be seen. I thought they would IPO but it was probably not profitable.