From CRN: Novell CEO Touts New Products
By Stuart Glascock
Orem, Utah
1:00 p.m. EST Fri., Aug. 22, 1997
.............
Moments after spinning out another lower-than-expected quarterly earnings report, Novell Inc.
executives pronounced confidently that new products--NDS for NT, BorderManager, GroupWise
5.2 and the next revision of IntranetWare--will spark a turnaround.
On a conference call with analysts, Novell Chief Executive Eric Schmidt pinned the struggling
networking company's future on a series of Internet/intranet products to be released within six months.
A somber-sounding Schmidt said that Novell Directory Services for Windows NT would be available
in October. NDS for NT is perhaps Novell's greatest shot at recapturing some of the market share
that Microsoft Corp.'s widely popular Windows NT has taken.
"Novell is the undisputed leader in directories," Schmidt said. "We are the only company that is
applying directory strategy to every aspect of the network from routers to the operating system."
Novell already has bundling agreements for NDS with Sun, IBM, HP, SCO and Fujitsu. A directory
is a central repository for all systems and applications that VARs use when configuring systems.
Novell has held the lead with NDS, but the release of Active Directory in Microsoft's Windows NT
5.0, due in 1998, is expected to heighten the competition.
BorderManager is a suite of Internet access products that includes firewall, proxy caching, virtual
private networking and content screening. Novell will announce the general availability of the product
next week, Schmidt said. Reportedly, the announcement is planned at the Java Internet Business
Expo.
"BorderManager is coming off of an incredibly successful beta test period," Schmidt said. "Customers
managing Web sites have called it magic for how it impacts the cost-effectiveness of security and
administration."
In another example, he noted GroupWise 5.2 would be delivered in September, and he touted its
new Internet capabilities.
Schmidt said the company will do everything possible to migrate companies to its IP native,
networking platform, code-named Moab and due out in 1998.
All this optimism comes in the face of a third-quarter net loss of $122 million, or 35 cents per share,
on sales of only $90 million.
Novell officials noted several reasons for the quarter's poor financial performance. The company
allowed $26 million in product returns and exchanges by distributors. OEM revenue was $25 million
lower than expected, the said. Revenue from licenses declined by $9 million. Revenue from support
and education was also down.
The company also took a restructuring charge of $55 million, primarily associated with a
1,000-employee reduction.
"Five months ago, when I joined Novell, the company had unclear management priorities, a work
force that was out of alignment with the realities of our business model, an indirect channel with too
much product and not the right mix of product," said Schmidt.
"Many of our customers lacked confidence in the company's future to make future investments. I'm
pleased to report that during the third quarter we took decisive actions in all of these areas and
embarked on a pragmatic recovery strategy, based on sustaining revenue from the core platform and
creating a new growth around network services." Schmidt vowed the company "will become the
intranet/Internet leader by the summer of 1998."
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Now, I'm curious. This is a fairly [fairly...] accurate description of yesterday, and today, IMO. Yes?/No?
This doesn't, well... umm... "inspire" me. Why? Because well, somehow, I just don't "feel" that "big-time" revenue is just gonna start "pouring like water from a broken dam into the company coffers".
Do you?
I dunno, maybe I'm just skeptical.
Am I reading this differently? Does anyone else get "excited" when reading it?
Or... are the previous 2 articles posted more exciting [as far as a "turnaround scenario goes"] when coupled with this article?
Just curious.
Regards,
Joe...
PS: Does anybody think that Forrestor, and the Burton Group, and Aberdeen, and so on and so forth know something we don't know here? |
