Novell ventures into ecommerce arena

Novell Ventures, the venture capital arm of the networking giant, has taken minority stakes worth $15m in a range of Internet technology companies in a bid to boost its credentials in the ecommerce market.

The company has invested in Linux software specialist, Red Hat, online shopping specialist, Food.com, virtual private network developer, Indus River, online auctioneer, WR Hambrecht and content delivery provider, Edgix.

According to Chris Stone, senior vice president for strategy and corporate development at Novell, the investment allows the company to push its Novell Directory Services and NetWare software as an ecommerce platform.

Mike Mager, senior research analyst at the Butler Group, said Novell is buying its way into the ecommerce arena. "This gives them credence and visibility. They have bought into primary companies that give them a lead into the lucrative ecommerce market that we know is coming and will be worth trillions," he said.

Commenting on the investment in Red Hat, Mager said: "Novell is competing with Microsoft and has a clear path into ecommerce with Apache and Linux, neither of which Microsoft uses. I foresee something of a face-off in the future."

Mager also claimed the deal provides a natural way for Novell to make the transition from back-end ecommerce player to offering client services too.