..
Schmidt does seem to have sorted out the product focus and has emerged with a
better strategy for the Net economy, with what Novell calls "one Net" being at the
centre. Although it is late - with a resultant negative financial impact - there may be an
upside because Novell seems to have found (some would say stumbled) into a
marketing idea that is simple to put across and sounds good. It is also something that
Microsoft cannot achieve because it woefully lacks networking experience and has a
non-adaptable and flawed design for Windows networking. It's some time since Novell
came up with an idea that looked as though it had the potential to win new customers,
but one Net could just be it. Schmidt said - with a trace of surprise, it seemed - that
"one Net was wanted by everyone". If so, then the problem is how quickly Novell can
translate the idea into revenue.
The message, not the medium
Nelson said that Novell was getting over talking about what he analogised as the
plumbing in the Novell Jacuzzi and was [at last] trying to concentrate on the
hydrological experience - what Novell makes possible, rather than how its done. It's a
novel idea for Novell. It's pursuing the objective of getting NDS accepted as the
industry cross-directory (and telling people about the significance), and clearly hopes
to get IBM to join Compaq on this. In the medium term, Novell should gain from this
ability - particularly when the limitations of third-party efforts to make Microsoft's active
directory cross-platform are appreciated. Big banks are beginning to perk up interest,
because typically they have three dozen or more directories and no doubt many
sleepless persons worrying about integrating information and data integrity. Novell's
message is that its one Net design can take over from the old directories, so that they
can gradually be phased out.
Much confidence is being put in "proven-leader" Steve Adams, the new marketing
supremo, but it will take at least another quarter before any actions he takes could
have a significant impact. Schmidt said that Adams was sorting out what he had
inherited at the moment, but that there would be "marketing and support dollars for the
channel, which was why it was screwed up last year". Nelson admitted that there was
indeed a training problem for the channel, but that this was being rectified. This all
sounds like a pretty honest admission, but changes won't come until under-performing
and over-performing areas have been identified. Nelson said that Adams would be
supported financially if he showed a need for a bigger budget, but there can hardly be
a doubt that Novell needs to spend substantially on marketing. At least Novell seems
to have realised that there can be no significant effect on marketing without
leadership. Schmidt admitted that Novell had historically been too product oriented,
and that internally had not been coherent from a marketing perspective - but at last it
had a simpler message.
Novell is doing marketing things - it has an over-subscribed series of meetings
throughout EMEA, in conjunction with IBM, when some 10,000 people will be told
about what the companies can do in eBusiness and eDirectory. Nelson wants to
make marketing a core competency at Novell, and will be embarking on a major
advertising campaign "this quarter" (before the end of July - it has funny quarters) in
the major financial and business press. Failing to tell the CEO mob that there was
someone out there other than Microsoft has always been a Novell weakness: founder
Ray Noorda was steadfastly reluctant to spend anything on advertising. Perhaps in the
future, if a CIO wants to go with Novell, at least the company's business leader might
be familiar with the Novell brand.
Fortunately buzz words come and go quite quickly: in Novell vogue at the moment are
phrases like "not providing the metrics to CFOs and CEOs". It's jargon for their not
understanding technology, with the sub-text that Novell doesn't seem to have a
generalised cost-benefit analysis of committing to Microsoft rather than Novell. Nelson
said he saw an opportunity to grow the market - but the reality is of course that the
market is growing very nicely, whatever Novell does. The question is whether Novell
has momentarily stumbled, or has been more badly hurt than is realised. We shall find
out a bit more next week when the gags are off and it announces its financial results.
Questions about Novell's finances had to go unanswered because the company was
in its quiet period, which must have been a relief after the warning and the dive in the
share price to around a quarter of what it was some months ago. Schmidt said he
never comments on the share price, but did observe that "It goes up and down". In a
rueful aside, Schmidt noted that Wall Street "works on a 90-day shock clock". Schmidt
did say that "The company is absolutely for sale - one share at a time, through your
local broker." Maybe he's getting his one-liners from Scott McNealy.
Schmidt also said that the issues that confronted Novell were tactical and not
strategic, so they are easier to fix. Shareholders who believed in the one Net strategy
"would be happy", but it was the middle of the debate so far as how long it would take
for this to show in revenue. It was clear enough that Schmidt had become very
conscious of the need to generate more revenue, particularly in new areas. ©
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