Novell Versus Veritas
by Chris Connor
Click here for the introduction to the Ultimate Storage
Championship.
The Match-Up
Fighting out of the red corner is the winner of
a hard-fought battle with Brocade {BRCD} in
the first round, Novell {NOVL}. Fighting out of
the blue corner is Veritas, who squeaked out
a victory over fellow storage giant EMC {EMC}
in the opening round. This match-up pits the
tournament's two software powerhouses
against each other. These two companies
have advanced to the second round because
the efficient management of data will be the
most crucial concern for the post-PC era.
Round 1: Which Company has the
Superior Leadership Position?
Although Veritas is the world leader in
storage management software, Novell has a
tighter grasp on the directory market. Veritas
has to contend with a number of major
companies such as BMC software {BMCS},
Legato {LGTO}, IBM {IBM}, Sun
Microsystems {SUNW}, and EMC. Software
may make up a small amount of EMC's total
sales, but EMC's presence in storage
software is undeniably significant. Novell's
directories have been superior to competitors'
directories for years - including those
proffered by software juggernaut Microsoft
{MSFT}. Now, Novell has separated its
directories from its floundering Netware
products to extend its leadership in
directories. Chalk this round up to Novell.
Round 2: Which Company has a
Better Growth Record?
Without question, this round goes to Veritas.
Novell has suffered through some tough years
and appears to just now be getting back on
track. On the other hand, Veritas has been
on fire. Over the past four years, Veritas grew
its revenues from just $15 million in the first
quarter of 1996 to an outstanding $226 million
in the fourth quarter of 1999, while Novell's
revenues declined from about $438 million in
the first quarter of 1996 to around $345 million
in the fourth quarter of 1999. In addition,
Veritas has increased its revenues thirteen
straight quarters on a quarterly basis and
twelve straight quarters on an annual basis.
Projected growth also goes to Veritas.
Analysts predict that Veritas will grow its
earnings 47.8 percent per year over the next
five years while they project that Novell will
grow its earnings only 20.9 percent over that
same time period.
Round 3: Which Company's Industry
has a Brighter Outlook?
This final round will decide the outcome of the
match-up. Although both software companies
provide products that enable customers to
manage their data more efficiently, these two
companies serve completely different
markets. In fact, some people may not
consider Novell to be a storage company, but
Novell is involved with Internet caching and its
directories allow access to network storage
from any location. Veritas' software performs
more hands-on functions such as backing up
data, protecting against storage hardware
failures to eliminate business interruptions,
increasing storage capacity, and speeding up
data delivery. Furthermore, Veritas will
ultimately be one of the major factors that
renders Storage Area Networks (SAN) more
user friendly. Nevertheless, directories could
be to networks what Windows has been to
the PC. Directories ensure that companies
can communicate securely with their
networks and those of their customers and
partners. This communication between
company networks facilitates optimal
transaction of e-business. Via this
technology, for example, suppliers can
always be well-informed about shipment
schedules, and important data can be
gathered at the blink of an eye. Moreover,
directories can capture user-specific
information to better target customer
preferences; every e-commerce company
seeks this information to increase sales.
Simply put, Novell's directory service has
outgrown the boundaries of a software product
to become the preferred standard for
organizing and managing data on a network -
which gives the storage referee authority to
raise Novell's hand in this round.
The Winner
Novell defeats Veritas by a split decision and
moves on to face Network Appliance {NTAP}
in the championship. Novell will definitely
have its work cut out for it as it goes against
the most dominant company in this
tournament thus far. The interesting point
about this match-up for the championship is
that both are major players in Internet
caching. Can Novell stop Network Appliance
in its tracks or will Network Appliance sweep
another opponent? Find out in the
championship.
*This report is part of a multi- part series
about storage in the post-PC era. Click here
for the initial report that profiled the entire
storage industry.
Disclaimer: This report is published solely for informational
purposes and is not to be construed as advice or a
recommendation to buy or sell a security. Trading involves
risk, including possible loss of principal and other losses.
Your trading results may vary. No representations are
being made that utilizing techniques mentioned in this
article will result in or guarantee profits in trading. Past
performance is no indication of future results.
wallstreetcity.com
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This guy Chris Connor "gets it" about the power of directories. Now if only NOVL can get a stock appreciation like EMC, NTAP and VRTS have the past 2-5 years. We're talking a $1,000 stock in 5-7 years IMHO. A Qualcomm special for Mr. Danti. =;-) Hey, I like to think "BIG", as I believe Eric does. Vision, product development, and execution. GO NOVL NET! |
