10/19/98 WSJ: Lucent to Use Directory Software From Novell; Firms to Collaborate
By DON CLARK
Staff Reporter of THE WALL STREET JOURNAL
Lucent Technologies Inc. agreed to use an important Novell Inc. technology in communication-switching systems, a boost to Novell in a closely watched contest with Microsoft Corp.
Lucent, the big AT&T Corp. spinoff, will announce plans Monday to use Novell's directory software in hardware that helps manage voice and data traffic around corporate networks. The companies also agreed to collaborate in pushing for industrywide technical standards to help build networks based on products from multiple vendors.
Directory software is a piece of communications plumbing that is becoming vital as the Internet accelerates the spread of electronic commerce. Directories list all users and devices on networks, controlling how people sign on to computer systems and which resources they can use.
Novell has a head start in the field over Microsoft, which is expected to deliver its first significant directory technology next year as part of a new version of its Windows NT operating system. But Microsoft has gained endorsements for its technology, called Active Directory, from companies that include Cisco Systems Inc., the biggest maker of computer-networking gear and a major Lucent competitor.
"Cisco's use of Active Directory is a competitive issue for both Novell and Lucent," said Jamie Lewis, president of Burton Group, a market-research firm in Salt Lake City. Lucent's use of Novell Directory Services, or NDS, will help Novell gain ground before Active Directory hits the market. "This is probably the most important use of NDS so far," Mr. Lewis said.
Microsoft contends Active Directory will work better than NDS with some nonproprietary technologies that are becoming popular on the Internet. Eric Schmidt, Novell's chief executive, said that perception isn't true.
"We are competing with something that doesn't exist yet," Mr. Schmidt said of Active Directory. After the Microsoft product enters the market, he added, it will easier for customers to evaluate real data about the two products' performance.
The Lucent endorsement, while important strategically, doesn't have much immediate financial impact for Novell, Mr. Schmidt said. Lucent says it will start using NDS in high-end switching gear in the first half of 1999.
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