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 (5505)	12/4/1996 9:31:00 AM
From: doug doan	of 42771

Eric, SAIC is a giant government contractor that is hoping to grow its non government business. Annual revenues of SAIC are over $2.2 billion and it performs a variety of technical services from Defense Planning to Transportation and health Care. In fact, one of its largest accounts is in VA hospitals where they are automating nursing stations, and billing procedures. The interesting thing about them is that they are 100% employee owned and none of their paper is outside the company. They organize themselves into a variety of different profit center's (they call them divisions) that all compete as independent entitites. Sometimes this backfires as DOD once had three different SAIC divisions competing for the same contract. However, on par it ensures that each entity of SAIC either competes profitably or dies. To keep a sold presence in the federal market, SAIC hires big names. The current Sec of Defense was once a senior SAIC guy. That insures access to all the key decision makers and as a result government contracts keep flowing. About the recent acquisisiton, DOD is worried about this since SAIC accounts for such a large chunk of the contracting dollars. SAIC is hoping to transform itself from a systems integrator into a one stop solution to integration-telcom problems. They are clearly at the head of the convergence of computer and telephone networks. My guess is that they will own the government market with this acquisistion. They will take business from ATT, and IBM. Government business accounts for 93% of revenue (prior ot bellcore acquisition). Their ability to innovate and capture commercial business is poor. What I hope it might mean for good ol NOVL is a much much better presence in the government market place where they are currently getting killed. MSFT is taking market share at a very fast clip. Also even Groupwise has a smaller( and shrinking) presence among Government buyers.

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