Novell's plodding turnaround raises industy ire
By Christine Burns - Network World
03/10/97
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This is the "Entire" Article, from Network World...........
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Orem, Utah
Customers, shareholders and other industry observers are growing
impatient with Novell, Inc. The company's repeated claims that it is about to turn itself around are being undercut by continuing bad news bulletins, the latest being disappointing first-quarter financials.
In addition, the company appears to be losing the mindshare battle to
Microsoft Corp. and its Windows NT offering, and is still looking to
replace Robert Frankenberg, who stepped down as chief executive officer last summer.
Novell is turning about as quickly as an ocean liner, and that
doesn't cut it in this Internet climate, said Paul Strauss, an analyst with Sentry Market Research in Westborough, Mass. Financial analysts faulted Novell for not meeting conservative Wall Street expectations for first-quarter earnings and revenues, which are 20% and 15%, respectively, below last year's first-quarter numbers. They've promised growth for two quarters and haven't delivered. That
doesn't inspire confidence in where they are going, said Scott Reamer, an analyst with Cowen and Co. in Boston.
Putting a silver lining on the earnings announcement, President Joe
Marengi pointed to record sales of IntranetWare and said to expect a flurry of activity from the company soon. At its BrainShare conference later this month, the company will announce enhancements to its Novell Directory Services and ManageWise programs, as well as roll out Novell Border Services for tying intranet services to the Net.
Chairman John Young said the uncertainty surrounding Novell's
leadership will be cleared up when a CEO is named in the near future. When Frankenberg left in August, the plan was to fill that spot within four to six months, but that decision is not expected for another few weeks.
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Some shareholders are calling for more drastic measures to make the
company turnaround happen more quickly. We want Marengi and the entire board of directors out of there now, said Joe Antol, a stockholder from New Jersey who has organized other shareholders in a cyberspace protest against Novell management. The group, which calls itself the Novell Investors' Coalition, has pooled more than 500,000 shares to help influence its request for new leadership.
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Other industry observers contend that Novell is a likely target for an
acquisition. With Novell stock so low, if you wanted to take them over, milk the revenue streams and take the $1 billion in liquid cash, now would be the time to do it, said Neil MacDonald, an analyst with Gartner Group, Inc. in Stamford, Conn.
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