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

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To: Dieter Koerner who wrote (20162)2/15/1998 12:01:00 PM
From: George Papadopoulos  Read Replies (2) of 42771
 
Slitz responds to your and Don Earl's questions!!!

novell.com

Ask John Slitz

John Slitz

In the November 1997 issue of NetWare Connection, John Slitz, senior vice president of
Marketing at Novell Inc., answered our questions about Novell's marketing program. (See "John
Slitz Under the Microscope," pp. 22-26.) John offered to answer your questions as well, and
many of you have already submitted a question. This article presents some of the most
interesting questions submitted and includes John's responses.

John's offer to answer your question still stands: If you want to submit a question for John,
visit NetWare Connection's World-Wide Web site
(http://www.novell.com/nwc/dec.97-jan.98/askjhnd7). You can also send an e-mail message to
nwc-editors@novell.com, or you can send a fax to 1-801-228-4576.

If John selects your question, you will receive a free copy of CNE Product Link, which is a set of
CD-ROMs that contain limited-user versions of Novell's shipping products, such as
intraNetWare, intraNetWare for Small Business, GroupWise, ManageWise, and
BorderManager. These CD-ROMs also contain Novell's latest beta products and early-access
release products.

FIGHTING THE MICROSOFT MYTH

Dear John,

I live in Perth, Australia, where a very strong mind-set exists that Windows NT is the right
product to use. I have the following questions:

How does Novell plan to turn around the mind-set of both its customers who are
moving to Windows NT (only to be disappointed) and the people who sell networking
products? I used to work for a company whose primary directive was to sell Windows
NT even if it wasn't the best solution--mainly because Windows NT kept the service
personnel employed! The company even told Novell customers that Novell is dead. This
kind of talk is extremely destructive.
How does Novell plan to help its loyal small business customers, such as myself, who
truly believe in Novell products? Novell has always provided small business solutions,
but until I took Novell's PowerSell course, I had no idea what some of these solutions
could really do. (I admit that I thought GroupWise was simply an e-mail program.)
Novell does not hold many events in western Australia. However, a recent
BorderManager event was a huge success here. I invited a customer to this event, and
the customer bought BorderManager the next day. Does Novell plan to hold more
events in out-of-the-way places?

Jon L. Miller

Thanks for the questions, and I hope to see you soon. In late February, Eric Schmidt, Novell's
chairman of the board and CEO, and I are planning to visit customers in Australia to address
a lot of the issues you've raised.

In my visits to Australia, I've always been impressed with the no-nonsense approach taken by
Australians. I believe this approach will help Novell make real gains in the next year. The
facts are--

Novell is the fifth largest software company in the world with growing revenues for our
core products. We're not going away!
As you pointed out, BorderManager is a great product, but so are intraNetWare,
GroupWise, and ManageWise. Both large and small companies are beginning to
understand that they cannot compromise on network performance, reliability, and
scalability and that Novell products have consistently delivered on these values.

In 1998, you'll see more product announcements that increase Novell's lead in
network manageability and in what we are calling "total-value networking." NetWare
5 will merge IP and IPX, NetWare 3.2 brings year-2000 readiness to our large
installed base, and announcements surrounding Novell Directory Services (NDS) and
ManageWise will bring exciting new dimensions to managing networks easily and
efficiently.

We are advertising and promoting the success of our customers using today's products. We
will change minds and lead the information technology (IT) market into the next generation
of computing. We are focusing on the skills and expertise we have to build great networking
products and to help our customers run their businesses--not bet their businesses--on
networks that work.

Our products will support all the major operating systems because these operating systems
are not going away. Windows NT, UNIX, and others will have a part to play in a networked
future, and Novell will be there to help them connect in customers' businesses and beyond.

Good products, reliable service, and a worldwide reach will ensure that our marketing
messages are backed up by performance. That's a winning formula.

TARGETING UPPER MANAGEMENT

Dear John,

As a network manager with nearly 200 NetWare servers and an annual Novell licensing budget
of more than $300,000, I have a major interest in Novell's marketing success. My question is,
What audience is Novell targeting with its advertising dollars, and is this audience the right one
to target?

Novell has done a fine job selling its products to first-level managers and their technical
personnel. However, we are then left to convince upper management of the validity of our
choices. If you asked upper management to name five computer companies, you would be lucky
if Novell were mentioned along with Microsoft, Intel, IBM, and Hewlett-Packard. As a result,
when I try to justify my $300,000 Novell bill each year, upper management says, "What is that
for?" When I try to justify the $500,000 in Microsoft desktop licenses, on the other hand, I
scarcely get a question.

Novell has to make upper management realize that they are missing competitive advantages for
their company by not understanding Novell. Upper management must believe that following the
crowd is costing their company money. Get the Novell name in front of them--in the magazines
they read rather than in the trade journals. Believe me, when an executive asks, "What can
Novell do for us, and why aren't we considering its products?" the technical personnel will
come to find Novell.

Phil Dold

Thank you for your support over the last few years. Novell is targeting a broader set of
decision makers than we have in the past. We recognize that simply having the best
networking technology is not enough, and we are refocusing accordingly.

Senior executives and line-of-business managers are being targeted along with our
traditional, more technical audience. In 1998, success stories that take the business-benefits
point of view will play a prominent part in our marketing campaign.

ATTRACTING NEW CUSTOMERS

Dear John,

I have read a lot about Novell executives going out to talk to existing customers about
marketing. However, I have not read about anyone going out to talk to potential customers. I
don't understand how growth can result from talking to the same people over and over again.

For example, you mentioned the real estate market in your recent NetWare Connection
interview. When was the last time you walked into a real estate office and counted how many
unnetworked computers were on the premises? You would be hard pressed to find less than 10
of these computers in even the smallest office. Ask the employees if they subscribe to The Wall
Street Journal or read any computer publications. Ask them if they have ever heard of Novell.
Ask them if they have any idea how much easier their jobs would be if their computers were
connected.

How are you going to reach these people? Where is Novell's new business going to come from?

Don Earl

I can certainly see that you believe there is great potential in the real estate market for
Novell, as I do. However, to answer your question about new prospects in a broader manner,
you've hit one of my hot buttons, and I agree 1,000 percent.

To reach new customers, we are pumping up our partnerships with both hardware and
software companies. (Compaq and Oracle are at the top of this list.) Also, our advertisements
are turning toward stronger product messages that demonstrate customer success with our
products, and that is key to attracting new customers.

In forming partnerships, we've hired Chris Stone as senior vice president of Strategy and
Business Development. Chris is focusing his industry knowledge and contacts on building a
stronger base of applications that exploit the performance, scalability, and reliability of
Novell products.

Dear John,

I am a networking professional working for the U.S. government. Over the last year, I have seen
the U.S. government migrate its networks from NetWare to Windows NT at an increasing rate.
From a technical viewpoint, NetWare is much more powerful than Windows NT. Novell has not
addressed NetWare's major advantages over Windows NT with regard to managing users,
granting rights, and compressing data. The list goes on and on.

To perform a simple task such as adding a user with a home directory is a nightmare with
Windows NT. However, many decision makers in the U.S. government think that Novell is old
news. I strongly support Novell because I believe NetWare is the better product, but I am in the
minority among my coworkers.

I have two questions:

What is Novell doing to retain its market share in the U.S. government and educate the
decision makers who want to implement Windows NT on a large scale?
What is Novell doing to attract new business in the U.S. government?

Jason D. Malroy

I appreciate the vote of confidence in Novell products. You're correct: These products work
better than anything else on the market to bring manageability, scalability, reliability, and
lower cost of ownership to networking.

Both of your questions have the same answer in that Novell must focus all of its marketing
dollars on bringing these messages into every discussion about networking, whether inside or
outside of the U.S. government.

The U.S. government, more than any other large-systems user, is growing increasingly aware
of the need to connect what's there and to build on its established network. Novell is the best
company at helping all customers do just that. By focusing our marketing messages on the
solutions that are available today and on the strength of our technology, we are able to
demonstrate operational differences unmatched by other companies. By consistently hitting
on these messages, we are making headway with the press and, most of all, with our
customers.

Dear John,

How does Novell's new marketing program get the attention of new customers to purchase
NetWare instead of Windows NT? I've seen too many new installations of Windows NT. I
believe these installations are mostly due to upper management jumping on the Windows NT
bandwagon, not realizing that NetWare is the best choice.

Wendy Larsen

To address your question, I believe that Novell must do three things well:

Novell must show immediate and significant technical advantage that translates into
business benefits for customers who use Novell products, either with or without
Windows NT.
Novell must clearly and consistently show that it is not in direct competition with
Microsoft. The correct solution may very well be Windows NT and NetWare, NDS,
BorderManager, GroupWise, and ManageWise.
Novell must focus all of its marketing energy on the opportunities presented in the
wholesale change from task-based computing to network computing. Novell and its
customers (both current and future) will see tangible and significant benefits from
understanding and communicating the value Novell products bring to exploiting
these opportunities.

SUPPORTING CNES

Dear John,

As a Master CNE, I have a deep belief in a product line that has performed above and beyond
the call of duty for many years. However, I am still waiting for the day that announcements are
more than hype. For example, Novell recently announced that its BorderManager course would
be offered at three locations in the United States as of December 2, 1997, but the Novell
authorized education center (NAEC) in my area cannot get any solid information about the
student kit.

Novell must prepare CNEs more fully to fulfill market demand. When Novell releases a product,
we must be able to implement and support it. CNEs are your backbone. Novell has come a long
way with CNE Product Link and the CNE Net web site (http://cnenet.novell.com), but we are still
not adequately prepared to meet our customers' needs.

Maegan A. Mayer

Thank you for your question and for hanging in there with Novell. I also believe in Novell's
capabilities--that's why I joined the company.

In 1998, we are going to start several new programs to better communicate with CNEs. I
agree that they are one of Novell's most important assets, and we must do more to provide
them with the tools they need to serve their employers and customers. The first of these tools is
timely and accurate information about Novell products.

I think that you'll see a change in the next three months.

SEEING RED

Dear John,

Every time I turn on my computer, I see the Microsoft logo. Can you do this with Novell? It
would be nice for users to know that Novell is the company behind their network.

Dieter Koerner

As you know, Microsoft is in a unique position, technologically speaking, to have its logo
appear when Windows starts. We are now working on several ideas to have a message such as
"protected by BorderManager" appear whenever a Novell product is involved.

The IT world is changing, and we believe the system that consistently runs and guards your
network--a Novell system--will have a lot more to do with how well the network runs and the
value this network gives your company than a local operating system such as Windows.

John Slitz is senior vice president of Marketing at Novell Inc.

NetWare Connection, February 1998, pp. 22-24

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All good questions, standard BS answers IMO.

So what are u gonna do with your free CD?<g>

Enjoy

George
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