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Technology Stocks : Novell (NOVL) dirt cheap, good buy?

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To: scott blomquist who started this subject	3/15/2001 9:10:54 PM
From: Paul Fiondella	Read Replies (2) of 42771

Failure to understand Novell --- wake up everyone Jack Messman and Eric Schmidt have complimentary skills. Messman has extensive operational experience and Schmidt has a track record of being ahead of the industry on technologies that will make a difference. Hey did anybody notice that JAVA is being used to deliver real time data feed quotes? Remember it was supposed to go the way of slow BASIC interpreters. Didn't happen did it. Instead Microsoft settled with Sun on the issue of diffusing a unified standard for JAVA. Microsoft conceded it cannot derail JAVA by leveraging its desktop monopoly. And who got SUNW to embrace JAVA. Eric Schmidt. JAVA beat Microsoft in the internet tools arena. It was a new market and SUNW got there first with the most. Sound like a strategy being used with EDirectory? Eric's problem at Novell has always been corporate culture. This is not to say that Novell culture is "bad" and other corporate cultures, such as at Microsoft are "good". The fact is that Novell had a very important success in the LAN PC market that upended the entire history of networking in the 1980s. Success with known products eventually breeds bureaucratization. It goes with the terain of accomplishment. And Novell became a bureaucratized network LAN company. Not a bad thing if you own the LAN market. But that market changed and Noell didn't own it any more without realizing what was happening.! Turning this company into a different company with an internet perspective developing different products hasn't been easy. But it has been necessary and it is nearly done. Ask anybody working to get things done inside of Novell about how much resistance there still is to doing things "differently". Our way is always the easiest way inside a company because most often in a successful company which Novell was, our way in the past produced results. So our way is the best way maybe not for you but definitely for us. are you with us or aginus. And I should point out that without execution on a good strategy you get no results. That has been Novell's problem --- execution on a strategy that was RELUCTANTLY EMBRACED. The culture at Novell had to change in order for the company to execute better on the eDirectory strategy. We have suffered because of the power of Novell's former position in the industry which it was clear to anybody looking forward could no longer be based upon LAN sales yet still was The problem of changing that mindset within management at Novell has taken a long time. We are getting closer to that happening and this merger because it brings in 3800 results oriented professionals will change the internal perspective of management at Novell probably more than anything that has happened previously That is why I support the merger. We've tried enlightenment and now we are going to vote with numbers! Messman is not going to sit around and watch CTP not get the products it needs from Novell to sell solutions in the enterprise. He has to sell solutions for CTP to survive. He will have to wade into the Novell bureacracy to unravel the botlenecks. But he will be accompanied by a large number of OUTSIDERS. People new to Novell. Fresh perspectives and questioning of "the way we do it here" is on the agenda. Schmidt had few options to get some execution on his strategy when he came into Novell and he tried everything except fireing everybody. He was unable to attract a hands-on senior executive like a Ray Lane who would go in there and knock heads together and unravel roadblocks to get results. The reason was simple --- every executive looked at the company, looked at the entrenched fortress mentality and looked at Microsoft lobbing incoming and then said shit I'm not going to become cannon fodder in this F**Ked up company. One person cannot shout changes in a companies direction and implement a strategy to get out of the way of an elephant at the same time. Only Superman does that. Only Hollywood. In the real world Schindler saves a few thousand Jews. He doesn't have the power to change the direction of 20th Century German history. And Novell has a history. Another alternative was to fire everyone the minute they questioned your strategy.. Schmidt just wasn't interested in firing people. and that is what he would have had to do --- fire huge numbers of executives. I suggest some of you armchair quaterbacks read Gertsner and see what he did. He just came in and fired people en masse. It was bloody. He had to fire all those blue suits. Loyal employees that had worked for the company their entire lives. Sell the country clubs. End the dress code pecking order. Not that the people fired were "bad", but they were so wedded to the way they were doing things that it was impossible to move the company where it had to go with his strategy if he had to spend the time to bring every executive kicking and screaming along. People are stubborn. Few are able to look at the facts and change their opinion. Even fewer can actually grasp reality by putting themselves in the other persons position. How many people at Novell have tried the exercise of looking at the company from Microsoft's point of view? Gerstner decided the new guys would have less committment to the old ways and it would just be easier. Similarly if you read Andy Grove he talks extensively about the same problem. He calls it an inflection point and the one for Intel that he faced was getting out of the memory business. He also choose to bring in new people. Novell could have the best NOS on earth and compete with the worst NOS from a monopoly on earth and still lose. That is the way the modern capitalist market functions. The best product doesn't win in a market that isalready dominated by a monopoly. many people at Novell still cannot admit this. Possibly as we noticed in the last election, that is because they cannot get out from under their prejudices. They feel more certain with those prejudices. Its a scary world when you have to change your opinion frequently based upon a change in facts. Schmidt tried to move Novell screaming and kicking away from a Netware centric world to an eDirectory NOS agnostic world. Sure things work better on Netware but that is not the issue for most applications. Wordperfect is just as good as Word but so what. Too many people beat their heads against a wall on this at Novell instead of undestanding that Microsoft lives in those marketplaces and owns those marketplaces in which just good enough is okay to deliver sellable products. When Novell's portal strategy is implemented we may just see a change in the application marketplace. But today we live in a world where you cannot build your companies future on going head to head with a company that owns the market you are after. So how do you change the culture at Novell.? Well you can reason. Or you can fire. But the damage done by the later is too great. Nor could Eric have brought about changes at Novell alone He had to come in with a bunch of his own people and he didn't. Unless he came in with a bunch of outside executives --- his own team, there just wouldn't have been the momentum to execute on the strategy. And he didn't have that option either. When he left SUNW he agreed not to raid that corporation for executives. He was left in the unenviable positon of trying to bring around an old management team with no one at his back. I think he really went the extra mile there. Clearly he decided to respect the abilities of the people at Novell. Clearly he helped Nelson make the transition from Wordperfect applications software to network services and quite a few other executives were allowed to make major mistakes without being shown the door. So the situation today is that Eric and Messman are complimentary figures. Jack has his work cut out for him and he knows what he has to do because he has been hands on restructuring CTP for the last year to save that company which also had legacy transition problems. He will be the person to execute the strategy that Eric developed. Sure I would have rather had Ray Lane. Sure I would have rather had a Silicon Valley savy person. Biut the company that MEssamn has to get to execute the strategy is Novell. Novell has a history and Jack knows that history. If jack and Eric mesh these two companeis together it means Novell sells more eDirectory baased solutions to more people. That acceleration as Novell's directory gains traction is what we need. I hope this has been helpful. I completely support Eric at this point because intellectually I have become convinced, completely convinced that he knows what he is doing strategically and the problems at Novell have been structural and operational. Getting Novell to execute is on the front burner. LEt's give these guys a chance to do their jobs as professionals.

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