Novell Sees Steady Growth After Turnaround: Bloomberg Forum
Bloomberg News
March 8, 1999, 12:29 p.m. PT
New York, March 8 (Bloomberg) -- Novell Inc., which lost
leadership in network software to Microsoft Corp., ''has done the
turnaround'' and now expects revenue growth from new products,
said Chairman and Chief Executive Eric Schmidt.
''The products are shipping, the customers are happy and the
model is working,'' he told the Bloomberg Forum. ''We anticipate
growth, although we don't know just how much growth.''
For Provo, Utah-based Novell, revenue gains would be welcome
after years of decline, then two years of standing still that
coincide with the chairman's tenure.
Schmidt, 43, an electrical engineer with degrees from
Princeton University and the University of California at
Berkeley, came to Novell in April 1997 after serving as chief
technology officer of Sun Microsystems Inc., the No. 1 maker of
workstations and a major seller of network computers.
''I'm very happy at Novell,'' he said. ''I've just begun.
We're just beginning to focus on the Novell opportunity.''
Schmidt's predecessors -- Ray Noorda and Robert Frankenburg
-- took Novell far afield from its original mission.
''We took Novell back to what it was five and 10 years
before,'' Schmidt said, by restoring its focus to NetWare, one of
the first products for network management, as well as software
directories, ''which let you find all the tools on networks.''
The strategy has worked, said Schmidt, ''because most of the
other categories were fleshed out, but one area was absolutely
wide-open: networking and all the things that you can do on the
net.''
Earnings
Novell reported fiscal first-quarter net income more than
doubled to $28.9 million, or 8 cents a share, from $14.1 million,
or 4 cents, a year earlier. Revenue for the period ended Jan. 31
rose 13 percent to $286 million from $252 million.
It's now forecast to earn 10 cents a share in the fiscal
second quarter, the average estimate of analysts surveyed by
First Call Corp. -- double the year-earlier amount.
The company will complete a 35 million-share buyback
announced in June, Schmidt said, ''and may make a decision about
what to do next.'' Novell has spent about $322 million to acquire
26 million shares.
To expand revenue growth, Schmidt said Novell will keep
working closely with the top makers of network equipment such as
Cisco Systems Inc., Lucent Technologies Inc. and Northern Telecom
Ltd.; computer makers like International Business Machines Corp.,
Hewlett-Packard Co., Sun, Compaq Computer Corp. and Dell Computer
Corp.
Novell also has a strong tie to Oracle Corp., the biggest
database company, which uses Novell directory services in its
current software.
Schmidt said Novell also works with Microsoft, which has
sold its Windows NT for networks since 1993 and plans to
introduce an upgrade called Windows 2000 later this year, to
insure compatibility. While it's ''a very able competitor,''
Microsoft doesn't have Novell's experience in networking and
directories, he said.
''We're focusing on the differentiation,'' Schmidt added.
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