A Ripe Plum for the picking. Hmmmmm.....<g>
August 22, 1997 6:00 PM ET
Novell: A ripe plum for IBM?
As stock sinks, company readies new wares
By Lisa Wirthman, PC Week Online
Novell Inc. is ripe for the picking.
With the company's stock hovering around its year-low
price, a solid product road map and a slimmed-down
work force, speculation is mounting that Chairman and
CEO Eric Schmidt has successfully conditioned the
networking company for purchase.
The prime suitor? IBM, according to sources from both
companies.
"Novell's huge installed base, networking expertise and
billion dollars in cash make it an attractive option for
IBM," said John Oltsik, an analyst at Forrester
Research Inc., in Cambridge, Mass. "For Novell, a
merger with IBM could keep it in the picture by
renewing faith in its viability."
An IBM/Novell marriage would be advantageous to
both parties. Novell's strong network services such as
file, print, directory and replication would add value to
IBM's various operating systems. IBM subsidiary Lotus
Development Corp.'s Notes and applications services
would strengthen that mixture even further.
For Novell's part, the financial stability a merger with
IBM would bring could keep the company's products
afloat and renew customers' long-lost faith.
"Customers talk about Unix and NT. There's no one
talking about NetWare anymore," said Gary Sudin,
owner of Novell reseller GSI Inc., in St. Louis.
Officials from Novell, in Orem, Utah, and IBM, in
Armonk, N.Y., declined to comment.
Since joining Novell in April, Schmidt has indeed cut
costs. Following poor second-quarter results in May, he
trimmed the company's work force by 18 percent to
4,800. He also reunited Novell's development teams in
Orem and San Jose, Calif. This month, Schmidt
strengthened two of Novell's weakest areas with the
addition of new executives to handle marketing and
strategy.
Despite these moves, Novell continues to post dismal
quarterly results. Yestesrday, the company reported a
net loss of $122 million for its fiscal third quarter, ended
July 31, or a 35-cent loss per share on revenues of $90
million. For the same period a year ago, Novell
reported a profit of 17 cents per share on sales of $365
million.
The company's stock rose after news of the loss to
$8.75 as of midday today. The year-low price was $6.
Novell will try to regain some momentum this week
when it releases the first of a series of new products at
the Java Internet Business Expo in New York.
Novell is expected to announce its Java Application
Environment for IntranetWare, as well as a new NDS
(Novell Directory Services) developer initiative and the
first shipment of its BorderManager suite of Internet
access products.
Beyond JIBE, Novell is preparing to announce new
products next month, sources said, including NDS for
Windows NT.
Other products now in beta and expected to ship in
September include Remote Authentication Dial-In User
Service support for NDS, Novell Replication Services
and Novell Distributed Print Services.
Other products slated for fall release include Visigenic
Software Inc.'s Object Request Broker for IntranetWare
and an NDS trader service, enabling objects to be
registered and managed in the directory.
Novell will ship into beta its next release of
IntranetWare, code-named Moab, in late 1997. In 1998,
Novell plans to deliver its next-generation file storage
services, IntranetWare support for IPv6 and the first of
its Wolf Mountain clustering technologies.
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Regards,
Joe... |
