Novell (NOVL) dirt cheap, good buy? Message Board

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Technology Stocks : Novell (NOVL) dirt cheap, good buy?

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To: E_K_S who wrote (739)	5/23/1996 11:58:00 AM
From: Gus Risberg	of 42771

Novell Sales should Increase a Minimum of 20% a year Eric: The consensus of stock analysts and S&P is Novell sales will increase approximately 20% annually over the next 5 years. In light of the "Street's" negative perception of Novell this estimate is probably on the conservative side. Could sales increase more than 20%? Maybe. The positives and negatives for Novell follow: Positives: -Asia, S.America and Eastern Europe market is huge. NT is at a disadvantage due to the hardware requirements, lack of NT solution providers, and heterogeneous IT environments. -USA market strength is obviously converting current Netware 3.11 shops to Netware 4.1 . The case needs to be compelling and it is already for medium to large sized IS shops (thanks to NDS). The Internet is the key for the smaller existing Netware 3.11 companies. Can Novell provide a cheap solution with no upgrade headaches for Network managers? If Novell delivers in the next 6-9 months with real products that are perceived as winners at a low price point an avalanche could occur in 97 and 98. The decisions on which path to take for these shops will occur late in '96 and all through '97. -Hot new products adding to revenue will be Groupwise XTD (August '96 release date. This product will boost revenue immediately) and NEST ('98 to year 2000 will be high growth period). Negatives: -Novell has lost the startup and small USA companies to NT. This market is Microsoft's due to a number of reasons including Novell's apathy, homogeneous Windows environments, Microsoft's excellent marketing, and ability to provide a universal solution. -Pricing pressures will intensify with IBM, Sun, Novell, and Microsoft all providing network-centric solutions. -Perception can become reality. Novell's perception has been through Hell and back 15 times. Frankenberg is the right person at the right time. He was one of the "best and brightest" executives at HP and HP has one of the best management groups in the world. How will Frankenberg change perceptions? Focus, real products, and beating the "Street's" expectations.

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