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: Joe Antol who wrote (19074)	12/13/1997 9:30:00 AM
From: Paul Fiondella	Read Replies (6) of 42771

Joe here is my take on NOVL after the show IntranetWare 5.0 (Moab) is going to be a much stronger product than 4.11. Bordermanager and Bordermanager fastcache are the first entre products into the strategy of turning Novell into a leader in the internet market. Novonyx believe it or not is going to tell us how well this plays out. Its the first internet product that actually uses/requires a Novell server. If it competes well as a flavor of Netscape then we will know how successful Schmidt's strategy of moving Novell into the internet market will be. Where we will get revenue from this is in the NOS sales period. People will actually have to chuck their NT server and go to Novell as they expand server sites for us to know Novell is in turnaround mode. IT has to become the platform of choice. Here press reviews of Novell's performance will help. Fastcache being the lead product for those reviews since it uses NT buts moves people toward Novell. Both the NDS on NT and fastcache products show that they understand how to relate to NT better (and its not the old philosophy of share the market with MSFT and let them eat our lunch so they won't eat our dinner, from the Marengi days). Whether they can develop more products that piggyback onto NT as they go along and whether they can supplant NT as the dominant non-UNIX Intel based web server NOS platform, well once again look to Novonyx as the test. If it takes market share away from NT then Schmidts strategy is a success. If it flops then Schmidt is in trouble. The company is being bet on JAVA. The early release is out but the first release of developer SDK's is March. Everything looks like it is March or April of next year in terms of release dates for the Moab generation of products. What that means to me is two more quarters of weak earnings. It also seems like a stock recovery (in terms of new investors coming in) timed with Brainshare publcity. I think you and I know how fudged the numbers were for the last quarter. This was obviously done to protect Schmidt and give NOVL some breathing room to get these products in place. Schmidt is going to have a problem with market perception of Novell this current quarter when results are out however. I expect if he has any CEO street smarts he will deflate them early and call attention to the market transition in place. He needs at least one decent market success to point to however in this scenario or he may find himself and his strategy under attack. Any Novell sales people have any candidates for a product whose sales and performance in terms of revenue he can point to? The low end is still a vacuum on two levels at Novell. I see them still pushing IFSB. I can buy 4.11 5 user for $420. Why would I spend $295 on IFSB? This is a joke which someone of Schmidt's intelligence should be able to understand. This group within Novell just isn't doing its job. He needs to bring in some Phillipe Kahn like talent to kick some ass. I want to see a product at the low end, no more excuses. For example IBM's esuite is targeted on the low end of the mainframe market. In essence what IBM is saying is we understand products like Novell's that takes the dumb terminal interface and enables conversion to HTML so that one can now do a browser to mainframe communication. What we are going to do at IBM is take that proposition one step farther and develop a suite of simplified Lotus applications entirely written in JAVA including the browser and sell you somemore netpcs to replace your dumb terminals with and give you what those guys with PCs have in the way of local applications--- a reduced Lotus set. IT may not work but we'll try and as we get better with JAVA we will sell you a PC with JAFA apps. Meanwhile if you want to develop JAVA programs, here are a whole set of tools and an easy to understand path forward for you. Now for Novl there ought to be a similar approach to the low end. Here is something you can use in your small office now and we will sell you something better later. They haven't got it. My assessment is that the company has stronger products than they did before primarily in their core technology area and they are likely to have more success with Moab then any NOS product in some time beacuse other companies will look at its tie in to standards. ================= Conclusion: I will start buying some stock above 7 rather than waiting until the low is reached after the Q1 announcement. Especially if there is a market blow out due to Asia. My only concern is that I am doing this because I like this company too much and am ignoring its increbibly bad management record of turning opportunities into disasters.

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