"Whither Novell" - If you took all of the posts on this thread and shook them up and rolled them out, you (IMHO) would come out with this article. This is the most coherent article I have seen on NOVELL. I, personally CANNOT find ONE (1) fault within it. It leaves me at the end with a "quiet pause". A pause that say's... Well?...whatta ya' gonna do NOVELL? And you better be quick about it!
What do you think?
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Whither Novell? (THIS IS IN THE CURRENT INFOWORLD HARDCOPY AND ONLINE)
Even if it can quickly deliver on its product promises,the company must still overcome its credibility gap
By Ilan Greenberg
Publication Date: September 30, 1996 (Vol. 18, Issue 40)
There are few second acts for American technology companies. The short history of the industry hasn't been kind to comebacks. Look at stripped-down Borland International Inc., which continues its long hunt for a profitable quarter. Or take Apple Computer Inc., which seems to lose market share as steadily as the company hemorrhages employees.
And though some companies do manage to transform themselves -- Digital Equipment Corp. and Oracle Corp. come to mind -- the lack of role models for companies looking to reinvent themselves can't be
heartening to the latest member of the down-and-out brigade: Novell Inc.
The fact that Novell is in serious trouble is not in dispute. The resignation last month of CEO Robert Frankenberg only highlighted what company officials have conceded for some time:
Novell is at a crossroads; decisions made now by its executives are likely to determine whether it will provide relevant and innovative products for the next century.
For Novell's customers, this uncertain period can be a frustrating waiting game. As the company formulates its strategic direction, corporate networking managers are faced with the prospect of sitting
on their hands while Novell's decision makers, in Orem, Utah, figure out their company.
Waiting a few months, or even many months, isn't necessarily a problem for companies that aren't wrestling with significant networking issues, which range from migrating to Windows NT to building
intranet platforms. And, fortunately for those companies that do need to make strategic decisions during the coming months, enough information is available so that at least preliminary decisions about the company can be reached -- if not now, then in the very near future.
NT: FAIT ACCOMPLI? The heart of Novell is NetWare, its network OS (NOS). But after having long dominated corporate LANs, NetWare is now under intense pressure from Microsoft Corp.'s Windows NT Server. Novell's lackluster state is such that Windows NT's eventual victory over NetWare is seen as a forgone conclusion by industry analysts.
"Green River [the next NetWare upgrade, which will include Novell's IntranetWare, a Web server and protocol bundle] is the market they could have owned. It's their natural franchise where they should have
expanded, with both the application and Internet servers. But in neither place do they have any real credibility anymore. Microsoft is coming on just too strong," says Jim Duggan, a technology analyst at
First Albany Corp., in Stamford, Conn.
Credibility is an issue that is lately often mentioned in conjunction with Novell, among the company's customers, partners, and employees. Although NetWare has an installed base of 55 million users, the
company's recent announcements that it will open up the platform with components, such as network services and directories, have been met with a fair amount of skepticism, even among observers sympathetic to Novell's travails.
"Frankly, I think Novell is healthier than it has been in the last few years. A lot of work happened behind the scenes to clean up the company and refocus it, and Frankenberg deserves a lot of the credit for that," says Chris Shipley, editor of the newsletter Demo Letter, a division of InfoWorld Publishing Co., based in San Mateo, Calif. "The problem has been that the company was so internally focused in order
to rebuild and redirect it that externally the market became unsure of what Novell would or could deliver.
"I don't think Novell is looking to stymie NT so much as it is willing to build on it with network services. My understanding is that Novell will make its network services available on all prevailing platforms. But it all depends on [Novell's resellers, partners, and customers]: If those people are still loyal and excited, then Novell can make the turnaround. If they've given up, then things are probably pretty grim," Shipley continues.
At this point, however, even optimistic Novell watchers have a hard time conjuring a scenario in which Microsoft doesn't become a major NOS player in the next few years. NT's march to victory is usually
credited to Microsoft's marketing acumen and dogged determination to continue to develop a product until it's successful. But in this case, analysts say, Novell's own decisions played a significant role in
NT's ascent and NetWare's subsequent slide toward obsolescence. Specifically, Novell decided not to support NT as a complementary platform to NetWare and early on refused to port such profitable
technologies as directory services to NT.
"[Novell] claims they will offer directory services on NT, but they continue to position NetWare as the preferred platform. As long as they continue in that vein, their leadership in the marketplace will be limited," says Craig Burton, a former employee at Novell and principal of the Burton Group, a consulting company in Salt Lake City.
Statistics and widespread sentiments from Novell's corporate customers affirm Burton's pessimistic attitude. Framingham, Mass.-based market researcher International Data Corp. predicts that NT sales will eclipse sales of NetWare within five years. But many customers stand by NetWare because they say it is simply superior to its competition.
"This is really a case of technology. I think they [Novell] have the strongest NOS out there. I think they lost a lot with directory services; they just didn't make it easy enough to understand, but they're still a marketing machine, though maybe not as much as Microsoft," says Walter Mosley, director of advanced technology in the Enterprise Networking Group at Anixter Inc., a Skokie, Ill.-based system integrator.
Mosley sees intranets as one of the key components to his billion-dollar business. And in his mind, Novell is clearly still a vital player.
Nonetheless, once-loyal NetWare customers are beginning to consider a post-NetWare order.
"I think [NetWare] continues to serve its purpose for our needs, but increasingly [Lotus Development Corp.'s Lotus] Notes and NT Server are making inroads for document storage. I can see a time when NetWare becomes entirely less significant," says Mark Zeiss, a manager at a large Midwestern consulting company.
NOT BETTING THE COMPANY. Two years ago, when Internets and intranets began their skyrocketing ascent into the corporate consciousness, a few technology companies understood that the nascent technology was pivotal to their survival. Sun Microsystems Inc. responded by developing Java, a key Internet development technology, and Oracle took a leadership position in developing the Network Computer, a $500 Internet client device. And even though many people criticized Microsoft for its relatively late charge to the Internet, Bill Gates has since announced and shown that he is betting the company on the Internet. But, analysts point out, little was heard from the biggest networking company in the country -- Novell.
"We can't dwell on the past," says Novell's newly appointed president, Joe Marengi. "Were we slow on the upside? Definitely. But this simply will no longer be the case. We are staking this company on the
Internet."
To wit, Novell has recently launched a slew of Internet- and intranet-related technologies. Chief among these is the expected release next week of IntranetWare, which bundles the next release of NetWare, Version 4.11, with NetWare Web Server 2.5, FTP (File Transfer Protocol) services, NetWare Multiprotocol Router, and an IPX/IP gateway. (See Product Reviews, Sept. 16, page 117, for a beta
review of IntranetWare.) And the company has clear research and development advantages from its vantage point as a networking leader. Focusing on intranets, company insiders say, was the impetus
behind the company's shedding of its non-networking assets. The most dramatic example was when Novell off-loaded its WordPerfect application unit to Corel Corp. for a fraction of the $1.2 billion the
company paid to acquire it in 1991.
But Novell's new-found focus on intranets has been slowed by the company's reluctant adoption of the TCP/IP Internet protocol standard, a standard nearly all its competitors -- most significantly Microsoft -- were quick to embrace.
Novell earlier this month announced it will support TCP/IP natively by October, but many customers feel frustrated by what they perceive to be inexcusable tardiness.
"They [have] got to kick it into gear to support TCP/IP natively; I think they're falling behind. It's got to be dynamic. In any case, we're going to have to wait until they iron out the bugs just like we did with directory services," Anixter's Mosley says.
Some analysts even doubt that Novell will follow through on its announcement, highlighting the company's credibility gap.
"I don't believe it will be in a month," Burton says.
Whether or not Novell produces native NetWare 4.1 support for IP protocols in a month, statements from Novell managers do suggest that the company is intent on focusing on intranets and the Internet. The
question for corporate IS managers, then, is not the company's stated technology strategies and vision but credibility in such crucial variables as execution and timing.
IS THERE A FUTURE? Since Frankenberg's departure from Novell, there have been rampant rumors that Novell is likely to be acquired. Novell officials roundly deny that the company is for sale. But a
depressed stock price, still-robust technology, and moneyed Internet start-up companies make for an atmosphere thick with gossip. One persistent rumor has Netscape Communications Corp. acquiring
Novell. Many analysts, however, are bearish on the takeover rumors.
"With Netscape there's a cultural issue for them to consider. Novell started off much the way Netscape did, with disheveled programmers who could run rings around everyone. But that was a long time ago,
and it is certainly no longer the case at Novell," First Albany's Duggan says.
In fact, some industry analysts argue that Novell's watershed period, when the company could have been taken to the next successful phase, now has passed. Perhaps moreso than in other industries, to
stay ahead of feisty competitors, technology companies require sparkle and excitement. Especially in this era when the best and brightest employees are in intense demand, getting that old excitement back
may prove to be very tricky for Novell's executive brass.
"There are a lot of dynamic start-ups out there; it's so much more enjoyable to work for a company where people will return your calls. It's scary how fast that sort of legacy will deteriorate," Duggan points out.
Ultimately, however, the problems currently besetting Novell are based on its output, not its customer bandwidth or a lack of staff excitement.
"All this smoke and mirrors from these Novell executives on how they are going to get things right isn't credible. It's a product problem, not a marketing problem, and not a personnel problem," Burton says.
"Somewhere between 1987 and 1990, Novell made a transition into believing they were an operating systems company, and the way they thought they should keep that business afloat was to keep any
other operating system from being successful, namely NT. It was just an amazing thing to watch them try to do NT in. In short order Novell switched from being the first company to proactively support a new
platform from Microsoft to becoming the last," Burton recounts, adding that most companies that opt out of supporting Microsoft's system platforms have paid a price.
"They did not understand what business they're in and still are not moving toward understanding it. They're in such an awkward position, and their problems are so big I don't know if they can be solved,"
Burton says.
"Ray Noorda [Novell's founder and former CEO] is in the interesting position of being responsible for Novell's success and failure at the same time. When Frankenberg came to Novell, although he isn't
clean from responsibility, he was handed a company with a bomb, and all he had to do was detonate it," Burton adds.
In a nutshell, this is Novell's bind. It knows that the future is in software that will enable companies to set up broadband intranets, networked multimedia applications, and videoconferencing systems over
WANs and to conduct business on the Internet. It has the technological background to thrust itself into an immediate leadership position. And it still has the financial resources to market itself appropriately.
But even with 95 percent of the formula, an elusive 5 percent may doom the whole enterprise. The missing component is credibility. Having gone down the wrong road for so many years, it may take a long time to find the right on-ramp. That is a possibility IS shops will have to consider even before Novell attempts to deliver on its promises.
Marengi promises to open up company, speed development
CEO Robert Frankenberg's departure isn't the only recent change in Novell Inc.'s executive suite. Appointed last month, Novell President Joe Marengi fielded questions on the company's strategic product development plans and the future of his company.
Q: During the next couple of years, how should Novell be judged?
A: Probably the most important metric is the mind share given to Novell products in the Internet space, [because] right now it's a mind share game.
Q: Microsoft Corp. has released its beta version of Distributed File System for Windows NT and may release the final version by year's end. Will this prompt Novell to speed up the release of the Novell
Advanced File System, due in 1997?
A: All I can tell you is we are on a path to speed up everything. I'll leave that as the answer, except to say we're going to execute everything, including development efforts, much faster.
Q: Can you comment on merger rumors?
A: The bottom line is real simple: Our position is that we're a stand-alone company. At this point that's all there is to say, and there have been no discussions with Netscape [Communications Corp.] or
anybody else.
Q: What do you make of the criticism that Novell has significant problems in how it is perceived by its installed base?
A: The biggest perception problems are coming from the fact that people don't understand what we're doing. We have to open up the company to business analysts, partners we deal with, everyone. For
example, people still say we don't support open standards. It should be a no-brainer that we support open standards. Bottom line -- we need a much more aggressive PR campaign. I want to be more
proactive. There are a lot of things being said about us that [show that we are] misunderstood. An example of that is this notion that we don't support IP. We support IP. We've been marketed into a
corner by our competitors, and that's not acceptable anymore.
Q: Why is it said that Windows NT is beating NetWare?
A: NT is having good successes in the marketplace; our customers are using it, jointly deploying it with NetWare. Part of our job as a platform developer is to let people use NetWare with NT. That's a strategy we announced a while ago. But look, last year we sold 800,000 [seats]. That's an increase over the previous year. Our OS is much more niche-oriented, whereas NT is being sold in a broader stage. But
by no means is NetWare troubled; going to fixate on the problems of the past.
Q: Do you have any aspirations to be CEO?
A: I'm here to get the company to execute. All I'm interested in being is president.
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Joe <I don't know who this guy Greeberg is, but I gotta tell ya',
"He's right on the money"! RE-READ it again point by point and then
for those who have followed the threads, remember what we said here.
There ain't much time Joe Marengi (or whoever) -- You Gotta "Sparkle", and You Gotta get PRODUCT OUT!>
Which BTW, if I can find the NEXT post, I'll ask why this guy you got working in your marketing department couldn't be reached for comment, and also said -- In a somewhat pompus tone "We think our product is superior ...etc.. Now if that's Cryptic, let me see if I can dredge up the article, and you'll see what I mean. (What I mean is YOU GUYS DON'T HAVE THE LUXURY OF BEING POMPUS! IF IT WERE ME, I WOULD GET RID OF THAT GUY AND GET SOMEONE WHO "EXECUTES").
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