As part of its transition to an open-source software model, Novell will scale back its investment in some proprietary technology that competes with open-source alternatives, the company has revealed.

It will make only minimal investments in its BorderManager VPN and other products in favour of open-source alternatives, as it tries to create a profitable blend of open and closed-source products, said Alan Nugent, Novell's chief technology officer.

Speaking in Boston before an audience of technology experts, sysadmins and open-source enthusiasts, Nugent voiced strong support for his company's decision to bundle its proprietary networking software with open-source products, and even envisioned a day when the company might sell only open-source technology.

"Open source is the right way to develop software. Novell is still in the business of making proprietary software, and there are good business reasons for that, but as time goes on more and more will be open source. It's the way things are evolving," he said.

For Novell, moving to an open-source model forced changes in both the model it used to license its technology, and its traditional, "closed-source" business model based on "vendor lock-in", where companies compete against each other to win customers, monopolise a given market, then sell new technologies into their existing customer base, he said.

To make money selling products that customers can also get for free, Novell is now concentrating on providing quality customer support and maintenance, while targeting proprietary development in areas where there is a customer need, Nugent said.

The company is encouraging investment and development of proprietary technology in areas that can complement open-source initiatives such as storage networks and grid computing, identity management and resource management. At the same time, Novell will reduce its investment in technologies that have become "commoditised" by open-source or proprietary alternatives, or could be used to "substitute" for open-source products, he said.

The BorderManager virtual private networking (VPN) product is one example of technology that lies below what Nugent called "the value line" and in which Novell will be scaling back its investments. The company will continue to develop and support BorderManager, but may begin integrating open-source VPN components over time in a way that is transparent to BorderManager customers, Nugent said.

More Novell products will go the way of BorderManager, with Novell planning announcements for the upcoming LinuxWorld Conference & Expo in San Francisco in August, and the BrainShare Conference in Barcelona, Spain, in September, he said.

In areas "above the value line", where Novell sees the potential for profit, the goal is to focus on technologies in which no open-source alternatives exist and in which there isn't much interest from the open-source community, such as identity management and provisioning, he said.

When working in those areas, Novell will try to distinguish itself from competitors like IBM and HP by making closed-source products that best co-exist with those developed by the open-source community. "We have to be careful to develop software that leverages the Linux distributions. We don't want to contaminate those open-source initiatives," he said.

The company must also ease customers' fears about adopting open-source technology, from anxiety about finding support when things go wrong, to concerns about liability in lawsuits such as that brought by The SCO Group, he said.

"The theme is co-existence," Nugent said, arguing that - lawsuit from SCO aside - "there was no inherent conflict between open-source and closed-source development."

Nugent pointed to the ongoing Mono project as an example of Novell's vision of the future. Novell took over that project to develop an open-source version of Microsoft's .NET platform when it purchased Ximian in August 2003. Since then, Novell has boosted the development team from a handful of programmers to more than 400 people to accelerate development, which is approaching a first official release.

The company also hired 22 developers just to create open-source components for Mono. Their output will benefit the open-source community, and also increase Novell's leverage in the market, spurring development within the open-source community and by third parties for the Mono platform, he said.

"There are companies on both sides of the fence who wholeheartedly believe everything should be open or closed source. But that's impractical. It's about taking things and crafting them in ways that solve problems," he said.

Nugent's account of Novell's transition to a mixed development environment sounded familiar to Todd Taft, a senior specialist in UNIX at Nokia. Nokia is also experimenting with mixed open and closed-source technology development and deployment, and wrestling with issues including compatibility, integration and security, he said.

While Novell's plans sound promising, especially to an audience of Linux enthusiasts, Taft said he is skeptical that Novell will be able to boost its business just by focusing on select technologies that do not compete with open-source projects. "Time will tell," he summised.