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: DJBEINO who wrote (29099)	11/24/1999 10:14:00 AM
From: Paul Fiondella	of 42771

What can be learned from the analysts Listening to the conference call from the company side was very upbeat, but listening to the analysts was enlightening. It must be a crushing disappointment to Novell's senior management to wake up this morning to the downgrades. I think the company has to face these downgrades and learn something from them. That's the message. ============================= First it is clear that the basis for the downgrades is the leveling off of revenue for netware perceived by some analysts in relation to WIn2000. The fear out there remains that somehow Novell's NOS will fade with Win2000. Add to that the rather public dismissal of Slitz who projected the image that netware would take back the market and never embraced the NDS message and you have a disconnect with the Street. I don't think Eric recognized this disconnect because he was already on the NDS message and probably couldn't even conceive of how anyone else wasn't there yet. (And this brings up a sub-problem at Novell of not understanding how difficult it is for ordinary people to understand the highest levels of technology STILL and simplifying that message!!!) Unfortunately when the analysts look at the revenues, they see netware and then caching. When they look at caching they see competition. They do not see clear wins. Secondly, Novell upper management has got to understand the psychology of ordinary people better. Eric keeps trying to sell Novell as a plumbing company, as the Cisco of internet directory services. This engineering message does not work well with ordinary non-technical people. IT doesn't work because an ordinary persons personal experience does not extend to routers and directories. The focus is much higher, it is at the level of useful applications and interesting web sites etc. that do things for me. So what Novell senior management is missing is that the analysts look for an internet win not in plumbing but at this higher glitzy level. The only product that Novell has to give the company this flash is digitalme. Because the senior management of the company has allowed this product to become an orphan not a banner it has missed the boat on Street level enthusiasm. Personally I have conveyed to Eric many times the need to strengthen the digitalme group with creative and entrepreneurial people. If this product had been given center stage in Novell's new focus engineering efforts then you would not be looking at these downgrades. Face up to it Eric, you have got to understand the consumer level market. With a company with such tremendous resources and talents it is beyond me why you haven't given a group of people that like Scott Lemon were willing to take chances the proper space and resources and direction to blossom. WHY ERIC WHY????!!!!! But let's not let the analysts off the hook either. These guys want to see revenues from caching and directory internet apps. Well look forward. I see revenue momentum in the caching products. I see marketing getting a handle on caching, going head to head with Inktomi and beginning to take competing products seriously in this area. Novell is hungry for that revenue. They ar not going to let Inktomi do to them what Microsoft did. You can bet on that! As to directory apps, those were big wins at COMDEX. IF the analysts choose to ignore those wins, they are overlooking the entire business to business ecommerce market that Novell occupies center stage in with edirectory. ================ In conclusion I am not disappointed with what I heard on the conference call. Novell is a strong and growing company. The stock is undervalued. The analysts downgrading this stock are fundamentally wrong about what is happening to the internet and the growing pains at Novell. But Novell senior management at the executive vp level and above has an Achilles heel in consumer level products that better be addressed. The only alternative is a unfriendly buyout attempt, which I speculate they will face anyway soon.

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