Novell Launches Volera New Venture Takes Flight Targeting Aggressive Growth in the Content Networking Market Space

Novell, Inc. (Nasdaq: NOVL), the leading provider of Net services software, today announced the formation of Volera, Inc., a new operating company targeting the emerging content networking market. Volera will integrate caching and content management services, creating a new level of Internet intelligence that speeds and manages the delivery of content, allowing companies to realize the full business potential of the Internet. Nortel Networks and Accenture have signed definitive agreements with Volera to take equity positions in the new company, with closing expected within the next ninety days.

"This is a defining deal for our industry and Novell," said Eric Schmidt, chairman and chief executive officer of Novell. "The market has been looking for new platforms to deploy next generation Internet services and applications. With Nortel Networks and Accenture, we have the right partners to bring our highly competitive new platform to market. At Novell, we see Volera capturing early leadership in the rapidly developing Internet content networking market, one of the most promising on the Net."

Volera will deliver a content networking platform that provides the scale and intelligence to maximize the Internet's business potential. The newly formed company will work to create a next generation Internet where content, media and applications are delivered in the most efficient, secure and cost-effective way possible from source to destination.

"We are entering the content networking segment with great products, established distribution and partnerships, strong funding, and a complete team," said Simon Khalaf, president of Volera. "Our products and services set the industry standard in terms of speed, scalability and flexibility, while also offering end-to-end management capabilities that today's Internet customers demand," he added.

The agreements between Novell, Nortel Networks and Accenture call for the firms to provide to Volera over US$80 million in cash, as well as consulting services. Novell will also contribute technology and resources currently within the company's Net Content Services Group.

Nortel Networks, in addition to its minority equity investment in Volera, which includes warrants to purchase additional equity, will also enter into joint development and distribution agreements with Volera. George Cooney, Nortel Networks senior vice president of corporate development and ventures said, "Intelligent content caching, distribution and management are key elements of a content delivery network. Our relationship with Volera will drive a new category of content caching and content management solutions that will set new performance and functionality standards, and position service providers to deliver upon the promise of a Personal Internet. The investment is part of Nortel Networks strategy of continually investing in leadership technology."

Accenture has been working with Novell and the Volera staff for over 6 months in planning Volera's initial Internet content services offering. Accenture will purchase an equity position in Volera. Volera will also continue to rely on services from Accenture. Accenture is performing services that support Volera's sales, customer services, support and business development. "Accenture is committed to helping Volera achieve its business goals. Working together, we will be able to help clients leverage this new network architecture to deliver content faster to the end consumer," said Grieg Coppe, partner at Accenture. "We believe that solutions such as those provided by Volera will redefine the way networks are configured and will provide our clients with what they are really looking for in a network: speed."

Volera Management
Eric Schmidt has been named Volera's chairman of the board, while Simon Khalaf, formerly general manager of the Novell Net Content Group, has been named president. Drew Major, formerly chief scientist and chief technology officer for the Net Content Group, has been appointed chief technology officer of Volera. The new company is headquartered in San Jose, Calif., with additional offices in Orem, Utah and Berkeley Heights, N.J.

Volera Products and Services
Volera's Internet Caching System (ICS) software is the fastest cache engine in the world based on benchmarking by the Measurement Factory, an independent entity. ICS addresses the performance and scalability needs of content publishers, enterprises and Internet Service Providers (ISPs) by offloading repetitive and resource-intensive activities from the Web server. Volera's Content Exchange is a 100 percent hosted Web site acceleration and content injection service. Content Exchange allows Web hosting centers to offer fully managed services that combine site acceleration, virtually unlimited site scalability, and Internet content transformation and redistribution on-the-fly.

Market Leadership
Volera is already a leader in the cache appliance market based on cache appliance shipments by Dell, Compaq and other OEMs that license ICS. Volera estimates that it currently holds a 17 percent share of the worldwide market for cache appliances after only one year in the market. The company intends to expand its market share in 2001. Volera anticipates similar rapid growth in the content services market in 2001.

In 2001, Volera will provide its customers and partners with content management, streaming media and intelligent end-to-end network solutions. The company will continue development of a content networking platform for Internet data centers, ISPs and corporations that accelerates and secures the delivery of content, media and applications.

Financial Information
The Novell Board of Directors has approved an initial plan to make Volera a publicly held company, with the ultimate goal of distributing Novell's interest in Volera to Novell shareholders. Any distribution of Volera stock is intended to be tax-free to Novell's US shareholders, and will be dependent on receipt of a tax ruling from the U.S. Internal Revenue Service confirming the tax-free nature of the planned distribution, and final approval by the Novell Board of Directors.

Growth and development of Volera's business could lead to an initial public offering for stock in the subsidiary company as early as late 2002. This will be dependent on future market conditions and other factors and would occur prior to any distribution to Novell shareholders.

The formation of Volera is an important step forward in Novell's transition to a Net services business. Volera is addressing a market opportunity that is different from, but complementary to, Novell's primary business of providing Net services software in eBusiness solutions for the business, government and education markets. The products and technologies transferred to Volera by Novell are all in early stages of market adoption, and represented less than one percent of Novell's Fiscal 2000 revenue of $1.16 billion.

As a subsidiary of Novell, Volera revenue and expenses will be consolidated in Novell's income statement and financial reporting.

 

About Novell
Novell, Inc. (NASDAQ:NOVL), is the leading provider of Net services software that delivers services to secure and power all types of networks the Internet, intranets, and extranets; wired to wireless; corporate and public across leading operating systems. Novell's Net services software provides the foundation for one Net a single global network that supports new applications and forms of business. Worldwide channel, consulting, education and technical support programs, along with strategic alliances, combine Novell Net services software with third-party products and services to form complete Net solutions.

For information on Novell's complete range of products and services, contact Novell's Customer Response Center at (888) 321-4CRC (4272), or visit Novell's Web site at http://www.novell.com. Press may access Novell announcements and company information on the World Wide Web at http://www.novell.com/pressroom. In addition, detailed comparisons between Novell products and competitive offerings from other vendors are available on the Web at http://www.novell.com/competitive.

About Nortel Networks
Nortel Networks is a global Internet and communications leader with capabilities spanning Optical, Wireless, Local, Personal Internet and eBusiness. The Company had 2000 U.S. GAAP revenues of US$30.3 billion and serves carrier, service provider and enterprise customers globally. Today, Nortel Networks is creating a high-performance Internet that is more reliable and faster than ever before. It is redefining the economics and quality of networking and the Internet, promising a new era of collaboration, communications and commerce. Visit us at www.nortelnetworks.com.

About Accenture
Accenture, formerly known as Andersen Consulting, is a $10 billion global management and technology consulting organization. The firm is reinventing itself to become the market maker, architect and builder of the new economy, bringing innovations to improve the way the world works and lives. More than 70,000 people in 46 countries deliver a wide range of specialized capabilities and solutions to clients across all industries. Under its strategy, the firm is building a network of businesses to meet the full range of client needs consulting, technology, outsourcing, alliances and venture capital. Accenture's home page address is www.accenture.com.

Conference Call Notification with Web Access Detail
A live Web cast of a Novell media and analyst teleconference to discuss its announcement of Volera will take place at noon EST Feb. 2 from the Novell Investor Relations Web page: www.novell.com/company/ir. Through midnight, Feb. 9, an audio replay of the call will be available from the same address. A telephone replay of the conference call will be available after 2:00 PM EST February 2 through midnight, February 9. To access the playback by phone dial: 888-566-0787.

Forward Looking Statements
This press release contains forward-looking statements that involve a number of risks and uncertainties, including assumptions about future events based on current expectations, planned business development efforts, near and long-term objectives, potential new business, strategies, organization changes, changing markets, marketing efforts, new Net services, anticipated demand for new offerings from markets that Novell is entering, future business performance and outlook. The risks and uncertainties associated with these forward-looking statements could cause actual results to differ materially. The risks and uncertainties include the following: business conditions and the general economy; changes in business choices and business partners; competitive factors; sales and marketing execution; shifts in technologies or market demand. Additional information covering factors that could cause results to differ materially from projected statements can be found in Novell's fiscal 1999 report on Form 10-K, as well as in its annual report and Form 10-Q filings.

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