Novell (NOVL) dirt cheap, good buy? Message Board

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

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To: E_K_S who wrote (18581)	11/20/1997 10:10:00 AM
From: BP Ritchie	Read Replies (2) of 42771

Hi Eric! ... the 'recovery' plan/story hasn't changed since Eric Schmidt first articulated it only a few weeks after he started as CEO. I (Joe A, and Paul F did too) did exchange some email messages with several different Novell Senior Managers for several months early this year. I did get an email from Eric Schmidt in which he clearly stated that he expected that the 'turnaround' would take several years, one of his emails did include an estimate of 3 years ... to become recognized as #1 again (I believe ... this is from memory, and might not be exactly correct) and included some implied concern about investor's (me?) unrealistic expectations of an 'instant fix'. Although never clearly stated to me in any of the correspondence, I did get a good indication that they intended to focus on resolving product, process, staffing, and infrastructure problems in 1997 ... which they saw as a pre-requiste for improving marketing and sales. I also got enough information about what they are actually measuring and planning to conclude that they did not feel pressure to increase revenue in 1997 ... rather that they felt it would be better to 'stabilize' the business model and establish a (probably artificially low) baseline (1997 results) to measure future progress from. I would be very surprised if Novell reports revenue or profit higher than estimates for 1997 ... and personally expect that it will be in the low end of the range. I hope they also have enough sense to explain why they expect future years (already underway) will be much better. I continue to believe there is enormous upside potential with NOVL, but am also concerned about how that potential is being managed. This is not a complaint about Eric Schmidt, or any specific manager ... but an overall concern about their 'management culture' ... even today I believe there are too many Novell managers that place technical issues much higher in their priorities than are necessary and continue to ignore sales and marketing opportunities (too busy with technical issues), and it's very difficult to change these 'habits' that are the foundation of this culture.

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