Can directories sustain Novell?
By Paul Desmond
Network World, 12/14/98
In response to questions about the perception that Novell is losing
ground to Microsoft, CEO Eric Schmidt turns the question around
by asking, "How many quarters of rising revenue, rising profits and
successful products would it take to get a positive story written
about us?"
I thought that was a pretty good response and it got me thinking
about whether it was time to write a "Novell is back" sort of story. I
did a little research and found that, for the most part, Schmidt's
claims about Novell's comeback hold water.
In a late October interview with a handful of Network World editors
(NW, Nov. 2), Schmidt said Novell's revenue has gone up roughly
$10 million in each of the last four or five quarters. If you ignore the
quarter ending in January 1998, during which Novell suffered a
revenue decrease of $17 million vs. the previous quarter, his
statement is on the money, according to Hoover's Online.
Novell has had five consecutive profitable quarters, starting with the
fourth quarter of 1997, and has seen net income and net profit
margin increase in each quarter. Net income has gone up from $7.2
million in the fourth quarter of 1997 to an estimated $42 million for
the fourth quarter 1998, which ended October 31. Over the same
period, net profit margin has gone from 2.7% to 14.1%. So it
certainly appears that Novell is the comeback trail.
That's only part of the story. The more intriguing part has yet to
come.
Schmidt is clearly betting Novell's future on Novell Directory
Services (NDS). When asked whether he thought this was enough
to sustain the company on, he said the directory opportunity is like
the SQL database market of 15 years ago, noting that the SQL
market is now worth $80 billion (that's his figure, not mine).
Schmidt says it's not so much NDS that will make money for
Novell, but the myriad applications built around it. "We don't really
sell the directory, we sell things that use the directory," he says.
Most of these will be management applications - for example, tools
that help you find resources, do software distribution and manage
security certificates. Novell's ZENWorks management tool is one
specific example, and it has done well by most accounts.
In his keynote talk at Networld+Interop in Atlanta, Schmidt painted
a picture of directories extending to the Internet. Consumers will
have profiles of themselves at various places on the 'Net as well as
lists of their shopping preferences and such. Some of this
information would be shared among companies, depending on the
level of privacy users select for themselves, so a user won't have to
enter credit card data and shirt sizes to both L.L. Bean and Lands'
End. Directories would be behind it all.
Corporations will have similar profiles for their employees, for
example, showing what applications they should have on their
desktop. If a user accidentally deletes some applications, they could
be easily replaced. ZENWorks can do such things already. The
corporate profile would also hold information that would be relevant
to multiple departments; this means that finance won't need to
duplicate information that is already in the HR database.
This sounds all well and good (assuming some rather tough security
issues can be worked out), but is the directory opportunity as big as
Schmidt says? Is it enough to sustain the kind of growth Novell has
seen over the last year?
To find out, I've picked up on Schmidt's question about what it
would take to write a positive story about Novell and have
commissioned a feature story about the company. In it, we'll explore
what has led to the growth Novell has seen of late. But we'll also
explore this directory opportunity, in an effort to find out whether it
really can sustain Novell going forward.
The plan is to talk to the players that will have to make it happen.
Novell is clearly one, but for Schmidt's vision to come true there
will have to be lots of other companies building directory-driven
applications. Likewise, user organizations will have to buy into the
whole idea, and be comfortable with betting their directory strategy
on Novell.
This is where we can use your help. We're looking for users who
can speak to this directory issue, whether you agree with Schmidt's
vision or not. If so, how much would you be willing to spend for
the kinds of products that Schmidt envisions? Will you buy from
Novell today, or wait and see what Microsoft comes up with?
And developers, we can use your help, too. What applications are in
the works that will take advantage of this directory technology?
What do your business plans say is the revenue opportunity from
these applications?
Send your comments to me at pdesmond@nww.com, or drop your
thoughts in our online forum. Thanks in advance.
nwfusion.com
For online forum comments go to:
nwfusion.com
Network World Features Editor Paul Desmond wonders if they are. Do you buy CEO Eric
Schmidt's directory-centric vision for the future, or are you going to wait to see what Microsoft
comes up with?
Paul Doherty - 10:26am Dec 15, 1998 EST (#1 of 5)
Do I buy Eric Schmidts' directory-centric vision for the future?
You bet I do, and so does anyone else who has tried to setup or manage a large network (either lots
of users/objects in one place, or in lots of places (geographically-speaking)). Microsoft has
obviously "bought it" too, or didn't you know their central offensive involves *successfully* (key
word there :) producing AD (Active Directory) which is a direct imitator of Novell's NDS. So if MS
is "buying it" (as if it's a ploy or a red herring) then why aren't you?
Paul Doherty, B.A.Sc., CNA (3 & 4), CNE (4), MCP+Internet, MCSE
dfw.net
Davin Miller - 11:53am Dec 15, 1998 EST (#2 of 5)
File & application servers that have not abended or gone down in over two years, several hundred
users on a single processor server, new client machines loaded automatically when the user logs in
for the first time, the ability to easily set policies for Windows desktops, the ability to manage my
entire LAN from a single administration interface. You better believe that I will continue to buy
Novell. No other company can truthfully claim to provide this. Microsoft NT would require more
servers, extra third-party products, and a miriad of administrative tools to even come close. Oh
yeah, don't forget another employee or two! I cannot believe that you are even asking the question!
Why would I want to wait on a bloated OS that will not even have a functional, reliable directory
until 2001 or later? The fact that you even ask the question shows how effective Microsoft FUD
really is. Businesses run on what can be provided now and what works now. Shops that have
converted to NT are bleeding money spent on the extra staff needed to administer the beast.
Al Woolf - 06:20pm Dec 15, 1998 EST (#3 of 5)
Why wait years for Microsoft to build a directory when a reliable, scalable directory (NDS) exists
today? Plus, if MS can't get NT to be reliable, how will they ever get Windows 2000 to be a stable
platform? From what I have read, there are more lines of code in Windows 2000 than in IBM's
MVS Operating System. This is suppossed to be efficient? Please, be serious and look around at
how many Novell servers are like the energizer bunny...they just keep going and going and going
without rebooting.
Al Woolf - CNE3, CNE4 www.mnsinc.com/amwoolf
Jacob Sterngel - 10:00pm Dec 15, 1998 EST (#4 of 5)
Today in our NDS tree: 5000 users, 120 servers, about 600 applications delivered(ZEN), 900
printers (point and print), policies, 180 CD-ROMs.... And we are not very big.
How soon do you really think we will be able to convert this to a stable Active Directory. 5 or 7
years??.
There are about 60000000 lines of code in NT5.
Get real!!!!
There is no quetion. We will stick with Novell!!!!!
Jacob Sterngel
Sr. Engineer.
Mark Rogowski - 06:35am Dec 16, 1998 EST (#5 of 5)
When you see a new CEO coming to Novell and providing a more refined direction to a company
that was hurling endlessly downward, some sort of innovation comes from it.
Dr. Schmitt has his focus, and its on the directory. Moving the directory to the Internet is the words
of a true pioneer. In no way have I heard him "gospelize" his ideals like that of other company
CEOs, just state what could and should happen to an otherwise unmanagable inter-network.
I commend Dr. Schmitt for his insite, because his statements not only provide us with a direction as
to where Novell is going, but also sparks talk between other major players in the industry.
You ask if I will wait to see what Microsoft has to offer? My answer is NO. Microsoft wouldn't be
where it is today if it weren't for Novell. M$ copied Novell's technology and mass-produced it,
leaving nothing desirable. Hell, they're even copying Novell's directory service technology in hopes
they can convice the masses that they too are pioneers in the industry.
Here's another great example: Windows Terminal Server - Now there's a product that was literally
stolen from the UNIX world and made to work with Windows-based products. What erks me is
that Microsoft is coming off sounding like they invented the thing. Sorry Bill, you can't reinvent the
wheel.
Novell is clearly ten steps ahead of Microsoft in the "directory race". This is a company that is
literally tearing the directory service from their own operating system product and making NetWare
a second-rate entity that should be considered an afterthought.
Anyone who is willing to do this to their own product certainly has the insight to see what is
needed, and most certainly has my vote of confidence. |
