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

To: Scott C. Lemon who wrote (28573)	10/14/1999 1:29:00 AM
From: DJBEINO	Respond to of 42771

Who Are You? Novell tries to solve an identity crisis--on the Web and for itself. By Elizabeth Corcoran IDENTITY ON THE INTERNET IS A hot property these days. Shoppers fret over the privacy of their on-line buying habits, and marketers lust for insights into the very same. Some firms so value a peek at your on-line behavior that they give away PCs or e-mail service to people willing to provide personal data or a look at their ad-viewing habits. Even on the Web, where seemingly everything is free, your identity has tangible value. Novell Inc. says it's time you took control of it. On Oct. 5 the on-the-mend maker of network software unwraps a bold strategy for an innocuously named new product: Digitalme. Novell, which is offering the Web service free, hopes to coax millions of surfers into using it and passing it along to their friends. Digitalme aims to make it easier and faster for users to register and shop at on-line stores, manage their address books and control who knows what personal information about them on-line. Executives at Novell dream that Digitalme will become a widely used tool that will seem almost as essential as a Web browser. "You can't have electronic commerce without strong identity," says Chairman Eric Schmidt, who in 1997 left a job as Sun Microsystems' chief technology officer to try to revive a then-ailing Novell. But prevailing and turning the free product into profits will be a Herculean task. Novell will have to beat out rival schemes in the works. And because this is the Web, the design is "open." That means, even if Digitalme catches on and creates a Furby frenzy among consumers for identity software, Novell has no assurance its particular brand will be the one consumers prefer. Novell aims to solve an identity crisis of its own. For big software makers, the Web poses a problem that can't be overcome with just a snazzy Web site. Suddenly, the skills that made them a success look outdated. Selling disks for your PC is out--storing everything on Web servers is in. By the Numbers Novell is on the mend. Results for 12 months ended July 31; stock price is average for month of September. 12-MONTH REVENUE (IN $BIL) Fisca1 1999 Fisca1 1998 $1.23 $1.06 12-MONTH NET INCOME (IN $MIL) Fisca1 1999 Fisca1 1998 $175.0 $67.0 SHARE PRICE September 1999 September 1998 $22.45 $11.75 Few people understand such identity crises better than Silicon Valley's king chameleon, Schmidt. In the past decade he has turned himself from a Dr. Science nerd into an affable, at times mesmerizing, boss. In the mid-1990s he helped turn Sun from a mere maker of big iron into a hip "dot.com" outfit by championing the Java software language. Now it is Novell's turn. Schmidt spent two years stabilizing product lines and finances. That was just a warm-up for the really tough job: creating a Web identity for Novell that will drive growth and sprinkle some Internet pixie dust on its stock price. He hopes to make Digitalme so hot among on-line shoppers that Web firms will have to buy various Novell server programs that work with it. It is a radical leap for Novell, a vendor of corporate software that has never had much luck selling to individuals. Maybe it will have better luck when the product is free. Digitalme's main lure is convenience. Going through a Novell site on the Web, consumers can use any PC or Web gadget to go elsewhere without having to re-register or recall the password for each. Digitalme will also keep a user's address book and update it instantly. When someone listed in your book changes, say, his fax number and notes it in his own Digitalme file, your book will make the change for you. That's because all software resides on servers rather than on your own PC. Soon, Novell vows, Digitalme users will collect e-mail from multiple accounts (now in prototype as "Myrealbox") and chat on-line with friends. Other sites offer such services, but Schmidt says his is much broader. "This is the only solution that deals with all the problems people are having on-line," he says. Central to the service are MeCards, essentially Web pages where consumers can store data about themselves and their on-line accounts. People will likely have multiple MeCards tailored to various needs--one for business, another for on-line shopping, another that only your pals can see. Change your job title on your business MeCard and all Digitalme users authorized to see it get the changes. Hefty security technology keeps unwanted eyes from seeing the cards. As consumers realize how valuable their personal information is, they will grow warier of simply handing it over, says Michael Sheridan, a Novell vice president. MeCards will help them control who gets to know which things, he says. One card describing your passion for the Brooklyn Dodgers could be shared with other fans, while the card you use for shopping could omit it--so you don't get flooded with offers to buy Dodgers memorabilia. Novell says it won't impose on Digitalme users by bombarding them with ads. But Schmidt wants a real return. Novell will sell companies the software for managing MeCards as an add-on to its Novell Directory Services software. More than half of Novell's $327 million in sales in the July 31 quarter still relied on Netware, the networking operating system on which the firm was built. But the real growth will come from products that work off of its directory services. Partners in the ID push will be unveiled this week, and rivals are revving up. Microsoft is talking up Passport, which also features a single sign-on for member sites. The race to turn "e-business" into "me-business" is on. forbes.com