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: Leo Sanders who wrote (5175)	11/25/1996 12:17:00 PM
From: E_K_S	of 42771

Hi Leo - You summarize the course of events over the last 18-24 months quite well. I have concluded from my analysis, that there is a significant stratigic advantage for NOVELL to seriously consider a merger if the right partner is found. As I summarized in several of my previous post over the weekend, I believe a Novell merger could in deed be a huge positive going forward for the stockholders, for the Novell employees and for the acquiring suitor. There is a lot of risk going forward for Novell is they dodn't implement their business plan (and explain it) in every step. There is no room for error as the future of the company relies on the migration of current customers from 3.1 product to 4.11. Novell must obtain other revenue sources to survive and this may indeed come from their NDS project, NEST, service revenues or other non Netware related products and services. But past history has shown that these other sources of revenue are slow to develop. You might explain in a bit more detail how a merger could be positive for Novell, shareholders and a potential suitor going forward. Also, you might add Computer Assosiates as one of the potential suitors. The only other comment to make is NOVELL has an exceptional talent base of engineers and software developers (perhaps one of the best pools of talent in the WORLD!) which are not matched by many other companies in the industry. I think the company needs to leverage on these human resource assets as our new management implements their 'new' stratigic plans. One idea would be to develop a pool of 'in-house' problem solvers that would work directly with the customer and the VAR similiar to what Computer Associates announced last week. You do hit upon this concept in your paper, but I believe it might be better understood by the market if Novell established a separate company or subsidary to provide these services. The company would be it's own profit center and IMO the revenues generated from this unit would eventually far exceed the software sales of Netware only products. Shareholders and Wall Street would immidiately see the gains and down the road perhaps NOVELL could spin off the shares of this independent unit back to the shareholders. In sumamry, very good overview on a company that has made several mistakes but still has significant opportunities ahead. EKS <Joe - is this complex enough when the dusts settles?>

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