Any business likes to claim to be number one at something; the biggest pet-shop in town, the largest office productivity application provider globally, the only telco that provides both mobile and broadband in your area.

To this end categories are often invented to suit the business "This is the only shop in town where you can buy sweets, records, magazines, kitchen accessories and have a cup of coffee". This is an attempt to characterise the now defunct Woolworths in the UK— trying to be all things to all people was not distinctive enough to save it in the face of the recession.

One IT vendor that faces such a problem is Novell. It once had a clear market-leading position—in the 1980s and early 1990s Novell's NetWare network operating system was the network operating system of choice for sharing files among workgroups. The ascendancy of Windows, Linux, the IP protocol, among other things, led to a fall in demand for NetWare and left Novell seeking a new identity.

Unlike Woolworths (in the UK at least) Novell is still with us and doing OK; it has $1bn in cash and, although sales shrunk a little in Q1 2010, profits and earnings per share doubled. A sign of a business managed well in tight times?

Novell's main problem is getting the message out there about what it is and what it stands for. This is hard because the reality is that Novell is not number one in any of its core markets. Since the decline of its NetWare business Novell has survived by building up four new product lines.

1. It has a commercial distribution of Linux through its acquisition of SUSE back in 2003. A strong and growing business to be in, Novell has achieved particular success in the public sector, where open source is becoming more and more attractive as budgets are squeezed. Novell is helped by partnerships with Microsoft and IBM, but it remains number two to Red Hat (and, in the datacentre, Linux is still number two to Microsoft Windows Server).
2. It has maintained a long-term presence in the identity and access management (IAM) market, but this remains fragmented; directory management is dominated by Microsoft Active Directory, the Oracle/Sun merger has bought together two strong players in access security and there are many others including IBM, CA and EMC/RSA.
3. Through its acquisition of Plate Spin in 2008, Novell entered the configuration management database (CMDB) market; but again there are a number of major players in the mid-market including HP, IBM and VMware.
4. Finally it is in the business of measuring and monitoring IT systems and performance with tools from a number of areas including its acquisitions of e-Securities/Sentinel in 2006 and Managed Objects in 2008. Again a fragmented market with lots of players.

Novell has made it clear that it is a software products company by divesting itself of its services arm in 2008 (the results of a 2001 acquisition of Cambridge Technology Partners). So, it may be that Novell can claim to be the worlds number one supplier of Linux/IAM/CMDB/measurement and monitoring products, but such a Woolworths-style proposition is confusing and will not gain traction.

A better approach is to take a recognised market requirement and build a value proposition to address it drawing on relevant components from a broad product portfolio. This is what Novell is doing with its Intelligent Workload Management initiative. IWM aims to address the problem of securely managing workloads across dynamic IT infrastructure (think virtualisation and cloud computing). It requires elements of IAM, CMDB, measurement and monitoring. Identify with an emerging category well enough and perhaps Novell can be the thought leader, as it is attempting with the web site http://www.intelligentworkloadmanagement.com and, if that works, even market leader in the long term.

However, Novell should not lose sight of where its revenue is coming from right now. At the end of the day, there is nothing wrong in being number two or three in a market if you serve it well and address niche requirements. A siloed approach focused on a variety of core businesses, doing a good job in each, providing the products and expertise that buyers want and keeping the leaders on their toes, remains a viable approach for any vendor with a mixed bag of products—even if they are not the market leader in any one area.