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

To: PJ Strifas who wrote (30427)	2/18/2000 12:02:00 AM
From: Spartex	Respond to of 42771

Nice synopsis of conf. call by fellow on RB. I really like his summary of where NOVL is going, and meshes with my beliefs. By: Lurker3626 Reply To: None Thursday, 17 Feb 2000 at 9:03 PM EST Post # of 5894 Impressions of conference call Pluses -- Dr. Schmidt and Mr. Raney did an excellent job explaining NOVL's long-term strategy and presenting the company and a one-net company. They described a superb lineup of products with promises of new releases for Brainshare. The product pipeline is bulging and Eric explained the importance of partnerships with consultants in generating sales for what NOVL is offerings of e-business solutions. NOVL has NO competitors in this space. Nobody else is trying to do what NOVL is already doing, which is to present a single suite of seamlessly operating e-commerce applications to address the problems and online business needs of companies. NOVL's caching software is just starting to generate significant revenues, and interestingly, Dr. Schmidt mentioned that NOVL is using a MSFT marketing strategy for ICS by licensing it original equipment manufacturers. Dr. Schmidt (with some veiled humor) noted how effectively MSFT has used this sales technique in the past. Earnings will start to ramp up later this year with 20-percent plus quarters (still not the 30 percent-plus you need to be a "growth" company). But both Schmidt and Raney emphasized the long timelines for NOVL's marketing strategies. Minuses -- Sales training for the consulting partners for NOVL's complicated new software packages and custom solutions are just starting to show results. Schmidt said he eventually wants to have 100,000 people selling NOVL products around the world (NOVL sales people plus consultants), but right now they have a few hundred. This will improve over time. Each NOVL e-commerce package sale is a 6-8 month sale, utilizing consulting services. (ICS (caching) on the other hand, will go almost on automatic pilot, and Schmidt thinks this technology will be as ubiquitous as routers). Impression: Very credible and restrained presentation by Schmidt and Raney, notable for its lack of hype and any display of slickness. It was just the facts, but the theme was very apparent. This is a new company with a new strategy, building an entirely new business with new products. The message I got was that knock-your-socks-off growth is a year or two away, although they are going to have good progress toward the goal of total domination of this market space in 2000. I was also impressed by Schmidt's dismissal of Active Directory as any sort of serious competitor to what NOVL is doing now and will be doing in the future. He doesn't see Active Directory as a factor in the market for another year or two. Prediction: Short-term, NOVL may slack off a bit but will be higher with Brain Share conference and then with Q2 results, higher still. We'll see trading in 60-80 range by year end. After that, higher still. This is a get-rich-slow stock. A wealth builder, I think, but not a get-rich-quick scheme. Eric said it in 1998. "Ubiquity, revenue later." ragingbull.com

To: PJ Strifas who wrote (30427)	2/18/2000 9:23:00 AM
From: Rusty Johnson	Read Replies (1) \| Respond to of 42771

Novell Meets Quarterly Profit Target, But Sales Show Disappointing Growth By LEE GOMES Staff Reporter of THE WALL STREET JOURNAL Novell Corp. used cost cutting to meet its profit target, but the company's fiscal first-quarter sales were slightly below expectations due to lingering effects of the year-2000 computer problem. For the period ended Jan. 31, the Provo, Utah, software company reported net income of $44.8 million, or 13 cents a diluted share, up 55% from $28.99 million, or eight cents a share, a year earlier. Sales increased 11% to $316 million from $285.8 million. Novell's earnings were exactly in line with a consensus of analysts' expectations compiled by First Call/Thomson Financial. But its sales growth was below the 13% increase the company -- and many people on Wall Street -- expected. ... Analysts often are skeptical of claims by technology companies that Y2K hurt their sales, especially since so many companies escaped unharmed. But Bob Lam of Bear, Stearns & Co. said the calendar turnover had indeed posed a problem for Novell in the last quarter. He also suggested the market may have slowed as Novell customers waited to learn about the new Windows 2000 product from Microsoft Corp., Redmond, Wash. ... Novell is girded for a major battle with Microsoft; last week, for example, the company announced it had found a serious flaw in the Windows 2000. Microsoft responded that Novell's engineers had made a mistake in their analysis of Windows 2000. But Novell said third-party testers had verified that the flaw exists. Mr. Lam said that while Novell will have its hands full in its battle with Microsoft, the company is developing products for other markets besides the desktop-computer arena, where it is most vulnerable to inroads from Windows. One example is in using Novell software to power a new class of products to speed up Internet traffic; Mr. Lam predicted Novell will start seeing some upside from those efforts later in the year. Write to Lee Gomes at lee.gomes@wsj.com Subscribe to the Wall Street Journal Interactive Edition interactive.wsj.com Best of luck.