>> And what exactly would you like to see the new management do? <<
WELL JIM, I'D LIKE THEM TO "FIX" THIS:
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Since you took over Mr. Marengi the stock has depreciated more than 25% from an alreay abysmal point.
What in the hell are you going to do? When are you going to appoint a CEO? When is John Young going to get out of his ivory tower (and Lucent's) and make a comment. WHEN THE HELL ARE YOU GUYS GOING TO DO SOMETHING FOR THE SHAREHOLDERS IN THIS COMPANY?
HOW MUCH MORE OF THIS STUFF IS GOING TO GET PRINTED? WHY DON'T YOU JUST TAKE THE KNIFE, PLUNGE IT IT AND GET IT OVER ALREADY. YOU'RE INCOMPENTENCE AT RUNNING A COMPANY ARE SO PAINFULLY OBVIOUS, YOU MIGHT AS WELL JUST GET IT OVER WITH FOR ALL OF US!
OBSERVE:
Part of an article concerning Chevron:
Chevron didn't stop at the desktop. The company also will deploy standardized server applications. Heading the list of server-side changes under COE is a migration from Novell's NetWare to Microsoft's Windows NT Server during the next two years.
"One thing that contributed to NT winning was that Novell announced they were going to kill Super NOS," a promised, enhanced version of NetWare, says Wolfe. Chevron also had islands of Windows NT and Microsoft's BackOffice servers sprouting up around the company. That means training is less of a challenge than if there were no installed base of NT.
Chevron also decided to use Microsoft's Systems Management Server to handle lectronic software distribution and inventory tasks. The company expects that SMS will be a vital component in rolling out Win95 to so many desktops in such a short time.
Experts in software distribution agree. "Electronic software distribution is key because it's a very significant cost-saving tool," says Bill Holder, co-founder and director of operations at Micropath Inc., a computer asset management consultancy in Bellevue, Wash. "A company division with 2,000 PCs on average can save as much as $1 million by using an electronic software distribution tool."
In keeping with its plan to use mostly Microsoft products, Chevron selected the Exchange messaging server as its standard E-mail system. While there will be some exceptions for users of Unix and Internet E-mail products, Chevron is migrating most users to Exchange. The company already has about 25,000 Microsoft Mail users and is moving other users off of IBM's aging Profs mail system. More than 1,000 users already are on Exchange and more are moving to the system each week.
For some companies, relying so heavily on one company for the software to run its business can be scary-even if that company is Microsoft. "That comes up every time we talk, and the point is you have to consider all options," says Wolfe. While the current standard for desktop applications is Microsoft's Office suite, for example, the group's specifications do not refer to products by name or vendor. "Our vision statement, instead of saying 'Excel,' says 'spreadsheet,' and instead of saying 'Word,' says 'word processor.' We specify generic names in the bundle."
Chevron is negotiating with Microsoft over proposed changes in pricing under its buying contract. While Wolfe concedes the probability that his company will switch to another vendor is low, Chevron is talking to Microsoft's leading applications competitors and maintains that the door is still open for making changes.
"Don't believe we will not be listening to what Corel and Lotus are saying about their suites," he says. "Microsoft has to be more flexible and, depending on pricing and our negotiations, we might switch."
Chevron's decision is a big one for both companies. The energy giant spends $3 million to $4 million annually on Microsoft products, and a decision to switch to Corel or Lotus could cost Microsoft sales of 20,000 or more units of Office 97.
Another key decision still to be made is the choice of a Web browser. Chevron, which Netscape Communications recently touted as standardizing on the Navigator browser, may decide by early next month in favor of Microsoft's Internet explorer 3.0 instead of Navigator 3.0, according to Wolfe.
"I would say that it is highly likely that we'll switch to Internet Explorer," he says. "There's a 99% certainty this is going to happen, so I'm planning for it." One big reason is cost. Because Microsoft is giving away Internet Explorer 3.0 while Netscape now charges corporate users for Navigator, the cost differential when spread across 30,000 to 40,000 users comes to about $1 million in savings.
Another factor is that Microsoft plans to build its browser directly into Windows 95 and Windows NT some time next year, eliminating the need for a separate browser. "Our recommendation was that we go to Internet Explorer, and those people who need Navigator can use it as a custom, cost-added option," Wolfe says.
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The Novell Predicament
How Can Novell Get Out of This Predicament?
Novell's bid to remain a leader in departmental computing is being severely challenged. The company has failed in numerous attempts to architect a viable departmental applications server strategy - and has now fallen prey to the likes of Microsoft with its Windows NT Server and IBM with OS/2 Warp Server.
IT (Information Technology) managers and strategic planners are now struggling with how to position Novell NetWare servers within their enterprise client/server architecture. These executives tell Aberdeen that their organizations have made the decision to standardize on Windows NT Workstation as the enterprise strategic desktop operating environment-of-choice. And, these same executives expect that the strong applications linkage between Windows NT Workstation and Windows NT Server will ultimately drive their organizations to replace their Novell file and print servers with the file and print services
found in Windows NT Server.
In this Market Viewpoint, Aberdeen closely examines Novell's new strategic directions and the ramifications that Novell's new business directions will have for IS (Information Systems) decision makers, managers, planners, and Novell NetWare users. And Aberdeen advises IT executives to carefully evaluate the use of NetWare for their IT needs for the medium and long term.
Executive Summary
Despite enviable marketshare, a strong world-wide service and support organization, established indirect channel suppliers, and blazingly fast file and print services, Novell has failed to turn-the-corner to remain a viable departmental workgroup leader.
After numerous attempts to bring ISV (Independent Software Vendor) shrink-wrap applications to users of its NetWare (the Novell network operating system) servers, Novell has conceded its roleas the departmental application-server to Microsoft, IBM, and Unix. ISVs are porting their applications fast-and-furiously to Microsoft's Windows NT platform, IBM's OS/2 Warp Server, and a variety of Unix platforms, but not to NetWare -- and where the applications go, the enterprise follows.
Based upon discussions with IT decision makers, business-line managers, major ISVs and system-platform suppliers, Aberdeen believes that the future of NetWare as a cardinal application server for the enterprise is bleak.
Novell's new strategy reflects that NetWare cannot compete head-to-head with Microsoft's NT, IBM's OS/2, and Unix as an application server. Novell now plans to provide its large installed-base with a combination of products and services centered around Novell Directory Services (NDS). Novell's strategic NDS-based initiatives include: a major NetWare upgrade (also known as"Green River"); GroupWise for groupware; ManageWise for systems/network management; Inter/Intranet related offerings including plans for Internet publishing, Web services, and an endeavor to establish Novell NDS as the basic infrastructure platform for Java-based applets.
Aberdeen believes that Novell's NDS-centric strategies does offer value to Novell's installed-base -- but can find no compelling evidence that without new, business-critical client/server applicationsthat Novell's current strategy will succeed outside of the installed base. Longer term, Aberdeen believes that Novell's current strategy will force its existing users to look to other suppliers for application services -- Novell file and print services will be replaced by the file and print services included within the application server environments of other suppliers.
For Novell's users to remain committed in the long run to their investments in NetWare, Aberdeen believes Novell will need to:
Make additional applications available by integrating NDS with Windows NT server;
Refocus its engineering efforts on application projects that can be delivered to its installed-base in the near-term, rather than on grandiose long-term projects such as NDS-Everywhere;
Enable Novell users to gain access to Internet-directory services and applications by exploiting the emerging Internet directory services (LDAP, Light weight Directory Access Protocol) standard rather than by trying to force NDS upon the Web community; and, Succeed in new business ventures (particularly in its Internet, multimedia and telephony-related endeavors) in order to open new sources of income to replace revenue lost by decreasing NetWare marketshare.
The New Enterprise Standards Do Not Include Novell
Aberdeen recently talked to IT executives of large, Fortune 500-type accounts -- face-to-face, at their sites -- in order to examine their IS (Information Systems) transition plans as they move to xlient/server architectures. These IT decision makers told Aberdeen that they are migrating from Novell's NetWare to Windows NT Server, and cite four primary reasons for doing so:
1.IT planners believe that the latest, client/server applications and development tools are to be found on Windows NT, OS/2, and Unix -- not NetWare;
2.IT decision makers believe that NetWare's mainstay strengths -- file and print services -- are becoming commodities that are provided with application servers. And these decision makers are now consolidating departmental-level file and print services for their users on Windows NT Server or OS/2 Warp Server;
3.IS administrators and LAN administrators, the people who manage distributed computing for the enterprise, indicate that supporting multiple operating environments drains ever-shrinking IS resources. The choice of a more homogeneous operating environment allows them to minimize or dissipate problems integrating, deploying, and supporting client/server applications; and
4.IT executives believe that either Novell will fully integrate NDS with NT; or Microsoft will deliver OLE Directory Services that will interoperate with NDS -- ultimately allowing administrators to manage large numbers of departmental NT servers in existing NetWare networks.
To triangulate these findings, Aberdeen talked with key hardware platform suppliers and software ISVs to ascertain their views regarding NetWare trends. Aberdeen found that few ISVs are actively porting their applications to NetWare environments; and that PC server suppliers are reporting a decline in their NetWare sales while Microsoft's NT continues to ramp up. The consistency of
feedback from IT planners and managers, hardware platform suppliers, and software suppliers regarding NT Server adoption trends leads Aberdeen to project further erosion of the Novell position within the enterprise
Novell's Failure to Execute Makes All Wonder
But, can Novell successfully execute its current strategy? Not if Novell's recent history of technology failures and market blunders serve as examples.
The beginning of the end came for Novell in the late 1980's: Novell had identified the changing role its file and print servers would need to play within an enterprise. Servers were to become file/print/applications and communications servers capable of running client/server applications as well as
hosting integrated database capabilities. And, Novell proclaimed with great fanfare its intention to be the next-generation workgroup-server of choice through a continuation of ambitious technology undertakings and acquisitions.
Yet, Aberdeen's analysis suggests that Novell has continually failed to fulfill its objective to become an industry leading application server option -- and has failed for three principal reasons:
1.The repeated annual change of tactics and business lines orchestrated by Novell's executives resulted in continued loss of focus, and unattainable and undelivered results;
2.Novell consistently failed in the technical execution of building a client/server application server out of NetWare; and,
3.ISV partners tired of the protracted disorder, the ever-increasing costs to do business with Novell, and their inability to recoup costs from multiple Novell ports -- and decided to look elsewhere.
Novell put forward multiple initiatives in order to enable NetWare to become the full-function,server-of-choice for client/server applications -- initiatives that consistently failed. Examples include:
Portable NetWare: an attempt to take advantage of application services on Unix servers by co-hosting NetWare file and print services on Unix operating environments. Subsequently renamed NetWare for Unix, this initiative failed because the native versions of NetWare on Intel-based PC servers consistently outperformed all the hosted Unix versions of NetWare. IT executives hoping to
consolidate the number of their installed NetWare servers found their hopes dashed;
NetWare Loadable Modules (NLMs): an attempt to enable ISVs to load their applications directly onto the NetWare operating environment. This initiative failed because both users and ISVs found programming and configuring NLMs to be too difficult, time consuming, and prone to NOS crashes. NLMs turned many ISVs away from NetWare;
Processor Independent NetWare (PIN): an attempt to eliminate the reputation for poor performance that Portable NetWare had garnered by porting NetWare natively onto Risc-based (Reduced Instruction Set) hardware platforms. Originally scheduled for shipment in late 1992, PIN kept being delayed until it was finally canceled in late 1993. By this time, IT executives that had pinned their hopes and capacity planning on PIN, and ISV's that had hoped PIN would salvage
their costs decided to test Microsoft's Windows NT Advanced Server as an alternative to NetWare;
UnixWare and the Acquisition of UNIXƒ from Unix Software Laboratories: an attempt to fuse NetWare with Unix application servers. This initiative failed because Novell made several misjudgments: Unix was not conducive to becoming a shrink-wrapped software option; users of Unix had already standardized on NFS (Network File System) file-sharing and distributed Unix print-sharing; native NetWare users didn't want to install and manage Unix; and ISVs found that
instead of a merge of Unix and NetWare, UnixWare was a new, third environent that cost just as much to port to and support as the other two;
SuperNOS: an attempt to completely redesign and rebuild NetWare to be a multitasking competitor to Microsoft's Windows NT Server. SuperNOS was originally scheduled for shipment in 1995, and then delayed to 1996. The effort to build a complete, system-level operating environment with network services added to it would have duplicated existing Unix or Windows NT Server services.
SuperNOS failed because it was too-much, too-late; and WordPerfect and Application Suites: as part of its effort to forestall the entry of Microsoft's NT Server into its own user-base, Novell acquired WordPerfect and Borland's Quattro to construct a suite of application programs that would compete with Microsoft's OfficeSuite. Unable to compete with Microsoft in core office applications, Novell sold WordPerfect at a large loss in 1995.
Revenue Declines Confirm the Trend
Due to a change in its distribution stocking program, Novell had revenues of only $188 million for its second quarter of fiscal 1996. This is quite a come down from 1995 when second quarter revenues were $530 million.
Novell states that in its FY 1995, completed October 28, it had NetWare revenues of $1 billion, up 19% from the previous year. Yet because the production-quality application version of Microsoft NT Server 3.1/SQL Server 6.0 did not ship until July 1995, Novell avoided most of the fiercest competition in FY95 that it is encountering now. Reviewing Novell's first and second quarter FY 1996 financial statements, Aberdeen believes that NetWare is now shipping at an annualized rate of $750 million - down 25% from the previous year. This rate of decline could accelerate as more enterprises decide to stop all new NetWare installations and upgrades in favor of an evolutionary migration to NT Server.
Summary Observations
Novell caught the proverbial software brass ring with NetWare. It had the right product for the right market with the right distribution channels at the right time. But that was then and this is now.
Aberdeen believes that if Novell cannot successfully execute on the four required operational actions described in the previous section, Novell's predicament may soon turn into a deadly dilemma.
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And then you asked me Jim >> And why can't the existing management (fairly recent, still under the process of organizing themselves) perform these tasks? <<
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And now I answer you:
>>NOVELL IS NOT ON THE VERGE OF BANCRUPTCY. THE VALID ARGUMENTS ARE YOUR "MANAGEMENT'S" PAST PERFORMANCE, THE RADICAL DECLINE IN SHAREHOLDER VALUE OVER THE LAST 2 YEARS, THE BALANCE SHEETS THAT REFLECT THAT RADICAL DECLINE, AND THE "DOCUMENTED" DISSARAY THAT PERMEATES YOUR CORPORATE HEAD-QUARTERS. THAT, IS NOT, I REPEAT NOT HEATED "RHETORIC". IT IS A FACT!
LET ME SAY THAT AGAIN. BROWN BROTHER'S HARRIMAN DOES NOT HAVE NOVELL
RATED AS AN "AVOID" STOCK BASED ON "HEATED RHETORIC". IT IS BASED ON
THE REALITY OF THE CURRENT MANAGEMENT'S PERFORMANCE. THAT IS "WHY" THE CURRENT MANAGEMENT CANNOT PERFORM THESE TASKS. THEY DO NOT KNOW HOW TO.<<
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Now Jim. I got "tons" of this stuff. If you don't consider this "constructive criticism", then this will be the last communication between you and me, at least. I've said before, and I'll say it for the umpteenth time. You couldn't FIND a more ardent NOVEL supporter than me. But, I have had enough of this BS. Your company DOES NOT LISTEN. THEY WANT TO DO IT THEIR WAY, AND THEY (AND US) WILL PAY!
I don't know what else you want from me. I'm not interested in flame wars, I don't need this s*it. I have many other investments that are doing quite well thank you very much. But, as I've said privately to other folks, I just cannot understand this company. Maybe that is what 's keeping me interested. Maybe I'll write a thesis on it. Maybe I'll just sell at a loss, and then you'll be happy (FORGET IT! YOU WON'T SEE THAT).
Now. Do YOU have anything constructive to say?
Regards,
Joe... |
