Good News Joe??
Connect The Letters:
Does WAN, LAN & Internet Spell Novell?
______________________________
[June 25, 1996] In the alphabet soup world of wide area networks (WAN), local area
networks (LAN), intranets, Internet and online world there hasn't been much buzz
about one company that quietly led the revolution in corporate connectivity-Novell
(NOVL). Yes, this is the same Novell that bought Wordperfect for $855 million,
couldn't find the word "connectivity" in the application's dictionary, and recently sold it
to Corel at the fire sale price of $124 million. While that piece of juggernaut may be the
one item bobbing around the content flotsam another item seems to be all but
unspoken by fish or fowl-Netware. With more than 50 million users Netware has more
than 60% of the mega-billion dollar corporate network market and dwarfs virtually all
other network software products made by anyone, including Netscape (NSCP) and
Microsoft (MSFT).
Novell By The Numbers
We estimate that Novell's leadership in the network operating system market could
push its sales past the $1.5 billion mark for 1996 with net income coming in at a
possible $175 million or $0.48 cents per share. Past 52 weeks NOVL has traded as
high as $21.62 per share and as low as $11.37 per share.
The sudden emergence of the web has led Novell to chart a new course. In 1995, for
example, 57% of sales came from network systems while a meager 4% came via
groupware. This year could see groupware percentages hit double digit thanks to the
development of Novell's 'GroupWise' that features e-mail, conferencing and file sharing
capabilities and seeks to leverage the network operating system installed base. For
comparison, Microsoft trades at more than 30x price to earnings and Netscape still has
investors discounting its first $1.50 of earnings per share (EPS) which may not be
evident for two or three years. So why isn't Wall Street a believer yet? First, the
mantra "the network is the computer" that Sun Micro and Novell have been reciting all
these years (mostly to themselves) is now the call to arms for all hardware and
software makers. In other words, the webbed (as in WWW) world is trying to
swallow WAN and LAN and could very soon as intranets proliferate and a common
platform is needed to cut costs and hasten rollout of WWW protocols.
Possible Lead On Rivals And Darwinian Concepts
While Microsoft pursues its "be-all, end-all" web strategy and Netscape goes after the
Fortune 500 crowd with its "newer, cooler, better" selling points Novell says its
Windows NT web server is more than 4 times faster than rivals. In the alphabet soup
of networking the trend seems to be: WANs eat LANS and the web has 'em all for
lunch. Question here is can Novell, as a major LAN player, break the food chain cycle
and become a major web player? That begs others discourse into the idea of
acquisition or merger.
Consolidation, some say, is starting to emerge in a market bound for
essentially the same goal-to get businesses wired.
----------------------------------------------------------------------------
What do you think about Internet stocks and finance (venture capital, too), the wide
world of web and Wall Street...Send us your rants, raves or ramblings and they may
be included in this column in a special feedback edition every week. Want to receive
this analysis sent to your email box daily? Send email to the above with "all" in the
subject header. Every afternoon after the stock market's close (4 pm Eastern U.S.
time) be sure to check iWorld for a roundup of how Internet stocks fared that day with
Internet Daily Stock Report 'MOVERS SHAKERS' Market Close Briefing, a play by
play of ISDEX, Internet Stock Index, the leading barometer of pure plays on the 'Net
AND Wall Street.
----------------------------------------------------------------------------
Disclaimer: Neither Mecklermedia nor Steve Harmon makes specific trading
recommendations or gives individualized market advice. Information contained
in the Internet Daily Stock Report is provided as an information service
only. Mecklermedia recommends that you get personal advice from an
investment professional before buying or selling stocks or other securities.
The securities markets are highly speculative areas for investments and only
you can determine what level of risk is appropriate for you. Also, users
should be aware that Mecklermedia, its employees and affiliates may own
securities that are the subject of reports, reviews or analysis in the
Internet Daily Stock Report.
Although Mecklermedia obtains the information reported herein from sources
it deems reliable, no warranty can be given as to the accuracy or
completeness of any of the information provided or as to the results
obtained by individuals using such information. Each user shall be
responsible for the risks of his or her own investment activities and, in no
event, shall Mecklermedia, its employees, agents or affiliates, be liable
for any direct, indirect, actual, special or consequential damages resulting
form the use of the information provided.
----------------------------------------------------------------------------
[http://www.iworld.com/]
© 1996 Mecklermedia Corp. iWORLD Financial Network
Let me know what you think?
Jean |
