Handicapping Novell's future
Source: Computerworld
Computerworld via Individual Inc. : It's no secret Novell is a prime acquisition candidate. The company's huge installed base and valuable directory software can't be reconciled with its floundering $10 per share stock price. Expect a deal within the next six months perhaps before year's end. A revitalized Novell would clearly be good for customers and the software industry.
PLACE YOUR BETS
The real question is who will step up and make the first offer. The following are the odds and the upside:
IBM, 5-1. It's no longer the heavy favorite it once was, but IBM still needs all the firewalls it can get to fend off Microsoft's aggressive enterprise push. Its recent stock surge makes this the ideal time to buy. It's like getting a 30% discount on the purchase price.
Cisco or 3Com, 7-1. These two are in a dogfight in an exploding market. Both want to sell more network hardware, need broader channel support and are getting heavily into the network management business. Both are stock-rich and acquisition-oriented.
Netscape, 9-1. At some point, Barksdale and Co. will admit that it takes more than a browser, some neat World Wide Web servers and standards support to go the distance against the Microsoft juggernaut. Novell is Netscape's best chance to join Microsoft, Oracle and Computer Associates as leaders of the independent software industry.
Compaq, 15-1. Compaq has been dipping its toes into the acquisition waters, with purchases of Thomas-Conrad and Networth. It also has a partnership with Cisco and a new Enterprise Computing Group. This activity sets the stage for something big.
Hewlett-Packard, 15-1. Supporting RISC, CISC, Unix, Windows NT and NetWare would make Hewlett-Packard the most ecumenical of vendors. Its purchase of Novell would mirror IBM's acquisition of Lotus. This would mark the return of the systems companies, Part Deux.
Sun, 15-1. Sun is now a server company. NetWare and Solaris, along with Java, would help Sun support all those pesky Windows PCs and maybe even a few network computers.
Microsoft, 20-1. Don't laugh. Put Novell's directory software on Windows NT to manage Microsoft and non-Microsoft systems, and the systems software game might be over. The antitrust watchers might have to turn the other way if it's clear that other companies could have bought Novell but chose not to.
Oracle, 20-1. Larry Ellison needs to expand into small and medium-size business markets before Microsoft gets hard-core about the midrange database business.
Electronic Data Systems, 25-1. What better way to show off its new freedom from General Motors? Whether Novell rises or falls, EDS' network services business would be strong for years.
Computer Associates, 25-1. It's been said that every ecosystem needs a scavenger. This makes CA the lobster of the information technology industry.
All others, 20-1. AT&T, MCI/British Telecom, a Japanese or European
technology giant? It's hard to say which of these would be more scary for Novell customers.
Any takers?
[12-01-96 at 15:11 EST, Copyright 1996, Computerworld]
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