Novell Market Strategy....
Novell's business objective is to become a pure Internet / intranet
network software leader by the end of 1998. The company plans to
evolve its traditional products, and deliver all new products,
based on Internet standards.
From a customer perspective Novell is expanding the value of its
products from enabling file and print sharing on local area networks,
to providing the servers and network services necessary for highly
distributed Internet / intranet information solutions.
Novell sells Server Operating Systems (SOS). These are very different from Applications servers. NT and Unix own the Application server space (Dedicated machines that run a database, for example)
Out of all the Netware SOS deployments Novell estimates less then 20% is used for application serving. Novell's products provide platforms for network services that range from directory and security, to file and printer access, Web publishing, to messaging and network management. (NT when deployed for file and print serving competes with Novell. When deplyed as a applications Server NT competes most often UNIX.) WolfMountain is not needed for Novell because Novell is a SOS not a popular Applications server.
According to International Data Corporation (IDC), in 1996 worldwide shipments of server operating systems totaled 2.4 million units. Of this total, IDC attributed a 41% share to Novell. Between 1996 and 2000, IDC has projected Novell server operating systems growth at a compound rate of 8 percent.
That 8% growth rate if it is correct will not allow Novell to stage a recovery on the back of Netware alone. Novell knows this and is calling for the Network Services software to be the real driver of growth and sales:
Novell classifies its network services software into two segments:
1. Application services such as GroupWise email with integrated
document management, and ManageWise network management software.
2. Infrastructure services software including directory, security,
file and print resource sharing, proxy caching and firewall.
In fiscal year 1997, network services software accounted for approximately 23 percent of total Novell revenue. That number has got to rise. If it doesn't rise then the strategy is a failure and Eric S will get the Gil Amelio treatment.
It will take a whole lot longer then Eric thinks for the demand to develop for large scale consumption of BorderManager, NDS, and the other Internet centric products at middle tier companies..
During the transition GroupWise, ManageWise, BorderManager have to tow the line. They have not grown this past year. Take out Border Manager and whats left?
Here is the 1997 Fiscal Year Revenue Breakdown:
Intranetware / Netware SOS 61%
Groupwise / Managewise 14%
Infrastucture Services 10%
Education / Support & Other 12%
Unix Royalties 3%
Novell is at "Break even" after last quarter. Expenses are at lower then expected at 247 and Revenues are running at 252. I can not see them making further expense cuts - but hey you never know.... I would not count on it.
So watch the Network Services number not Netware - Eric wants to focus on Network Services. Novell will be a platform to deploy network services.
The only thing making money for them is the 1billion in the bank....
No way are they going to post a profit this quarter - no way.
Jim |
