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Technology Stocks : Novell (NOVL) dirt cheap, good buy? -- Ignore unavailable to you. Want to Upgrade?

To: Loring who wrote (27985)	9/3/1999 1:25:00 PM
From: PJ Strifas	Read Replies (3) \| Respond to of 42771

For discussion sake....no. Only because these companies (INTC and CSCO) are using acquisitions to enhance their product portfolios in terms of the networking hardware they offer. They are using this approach to bolster their R&D because it seems to be cheaper to buy someone who has already invested the time, effort and vision into a new product that is selling and works as advertised. It eliminates the "Oops" factor of bad ideas that didn't pan out and cost some $100 million plus to a company. This way there's a guarantee of return on their investment. It lessens the risks involved since INTC and CSCO transfer that risk to startups and smaller companies. They just wait around and pluck up the ones that succeed. Novell's chief product is the Directory. That's all software based - no chips, no products. Sure you can use NDS to enhance a piece of hardware like a switch or router but it would be more cost effective to license NDS. Also, if you buy Novell for NDS, it becomes a hardware companies "proprietary" enhancement and not an open standard for hardware companies to implement in terms of supporting NDS-enabled enhancements like policy-based network management. You can make the arguement that by buying Novell, a hardware company like CSCO or INTC would then have a "leg up" on their competition. And if say CSCO bought Novell and implemented NDS into every piece of networking hardware they owned, then perhaps they would create a de facto standard. All that would remain would be how "open" CSCO would leave NDS for further development or intergration and at what cost to other vendors would that integration be? If those questions could be answered with definite answers and not supposition, then perhaps yes. In any case, too many "ifs" to warrant an speculation that CSCO or INTC would buy out Novell. Peter J Strifas