Software company Novell Networks has bought information technology consultancy Cambridge Technology Partners in an all-share deal estimated to be worth $245 million (#268 million), or $3.88 per share. Novell which designs network software, will focus instead on offering IT services, and products. Novell chief executive Mr Eric Schmidt - one of the most widely respected figures in Silicon Valley - will step down as a result of the merger. Cambridge president Mr Jack Messman will become Novell's CEO while Mr Schmidt will continue as chairman and act as chief strategist.

Novell, with 4,600 employees worldwide, earns 5 per cent of revenue from a small consultancy team of 300. CTP, which specialises in e-commerce and IT strategy, has 3,400 employees in 19 countries, with the European market worth #130 million last year. Cambridge employs 80 in its Dublin office while Novell has 140 employees, also in Dublin. In July, Novell will begin building a new headquarters capable of housing 1,000 workers on the Dublin docklands gasworks site.

According to Mr David Cotterill, Cambridge's head of marketing for Western Europe, the merger will not cause any shake-up within either operation. "It's very much business as usual." Both companies are likely to move to the docklands offices when completed. The merger is unlikely to result in any redundancies, he said.

"The merger is complementary rather than competitive, so there's very little overlap of skills," said Mr Cotterill.

But a Lehmann Brothers report yesterday questioned the merger's benefits, noting that no model existed for a successful link between a software company and a consultancy.