Rodger,
You would probably agree to this report, it gives the flavor of what is out in the market, I am starting to get that twisted feeling in my gut that say's I should not have invested in Novell shares.
To all,
Anybody got any good news?
Costa
NOVELL'S NETWORK MONOPOLY IS OVER
Cambridge, Mass., August 30, 1996 . . . According to a recent report from Forrester Research, "Novell At The Crossroads," large corporations no longer consider Novell a strategic vendor and believe that NetWare is a legacy operating environment. Interviews with 50 senior IT executives revealed: 1) While 90% of large companies have NetWare today, only 48% said they would still have it in three years,
and 2) most users (72%) said that Novell will not play a part in their Internet/Intranet plans.
"Users are very dissatisfied with Novell," states Jon Oltsik, analyst with Forrester's Computing Strategy Service and author of the report. "Large companies believe that NetWare is a legacy technology. NT
seems like a better strategic solution -- it can do file and print, run applications, and includes native support of TCP/IP. And so far Novell's marketing message -- that NetWare will seamlessly transition into the Intranet -- has fallen on deaf ears. IT managers are already building the Intranet with Netscape, Microsoft, or Lotus. Novell is not even on the radar screen."
Novell's Financial Road Will Be Rocky
While Novell prepares products to address user needs -- like native TCP/IP and cross-platform services -- it will face 18 months of decreased sales volumes. Forrester estimates that Novell's revenue will decrease by 25% this fiscal year and continue to decline until 1998 when it settles at around $1 billion. Oltsik explains, "Before its next-generation products are ready, Novell will be forced to lower prices and offer bundled solutions just to encourage its installed base to upgrade. This combined with increased competition will compromise Novell's traditional high margins."
Novell Still Has Time
While Novell is in trouble, it is not out of the game. Novell has two things in its favor: 1) a strong balance sheet, and 2) its large installed base. But Forrester believes that Intranet technologies will ultimately replace NetWare, so Novell must quickly transition into a provider of standards-based services that enable the Intranet. In the meantime, the report recommends that large companies not panic; they should put their NetWare environments on ice for the next two years and evaluate new Intranet technologies and vendors as they emerge. Oltsik states: "CIOs should not panic and rip out NetWare. Making this
move would cost a mint and deliver no return. The right thing to do is spend tactically on file and print for the next two years and begin to implement Intranet protocols and products as they mature."
The report is part of the Computing Strategy Service, a Forrester research service that focuses on computing in large companies. Additional information may be obtained from Susan Somlyody, Forrester
Research, 1033 Massachusetts Avenue, Cambridge, MA 02138, 617/497-7090. |
