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Novell buys into IT consultancy market

Novell has announced it is planning to buy computer consultancy Cambridge Technology Partners in a stock swap worth about $266 million.

Novell has announced it is planning to buy computer consultancy Cambridge Technology Partners in a stock swap worth about $266 million.

As part of the deal Jack Messman, president and CEO of Cambridge, will become CEO of Novell, replacing Eric Schmidt. Messman already held a seat on Novell’s board of directors before the acquisition.

Schmidt will continue as chairman of the Novell board of directors and act as the company's chief strategist.

In a conference call on Monday evening, Schmidt said that buying Cambridge would help Novell reach its goal of having 30% revenue come from consulting services. Currently, about 5 percent of Novell's revenue come from consulting services.

"We need the skill set to quickly step up our consulting around our one Net vision," Schmidt said. "Companies are going to take network services and build up their e-services. Cambridge Technology Partners are big leaders here."

During the conference call, analysts asked Schmidt if Novell actually looked at acquiring other companies or stuck with Cambridge since Messman was already on the Novell board.

Schmidt said that Novell began considering consultancy acquisitions last summer and that he looked at several other companies.

"CTP made sense because of their position in e-commerce, and I felt Jack had the leadership skills and the history with both companies to pull it off," Schmidt said.

Messman said Cambridge would concentrate in areas where Novell's other consultancies aren't involved. He also said Cambridge's clients would not be "captive" to using only Novell products.

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