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

To: Joe Antol who wrote (18878)	12/3/1997 10:42:00 AM
From: Paul Fiondella	Respond to of 42771

I'm not short NOVL Emotionally I could never bring myself to short this stock. Also the dollars have never been enough to interest me. Shorting is best for stocks that move up and down more than a fraction of a point at a time. I was a long, then the company beat me up. My poor brain kept saying, 'when are you going to recognize this is a bad investment and stop losing money' and 'what's the point of arguing with them to do better, do you like to get your head banged against a stone wall while the new CEO gets stock at a penny a share?'. The final straw though was when I realized how much capital I had tied up in this stock while it was going nowhere. Capital that I could use elsewhere to make money. I feel much better sitting here on the sidelines. My emotions are still involved with NOVL and I want the company to succeed. However the revenue picture is unclear, the hole in the bottom of the product line remains etc. etc. I think if I were on the Novell BOD and attending a meeting after this quarter, I would probably have insisted on a better accounting for the failure to reduce operations costs given the enormous reduction in personnel. I would want some explanation of that IN DETAIL. I would recommend that Schmidt and others read THE KENNEDY TAPES about the Cuban missle crisis over the Christmas vacation (or on one of the company jets). That is how a company should function in a crisis. This company doesn't. ========================== Also born in 46, Joe. And Scott, Unlike Schmidt I pay full market value for my shares. Therefore I have to "do the numbers" without the fudge factor to hide the quality of the cake.

To: Joe Antol who wrote (18878)	12/3/1997 10:49:00 AM
From: BP Ritchie	Read Replies (1) \| Respond to of 42771

About the 'gloomster' label ... and outlook for Novell. I don't think of myself as a 'gloomster' ... more like an optimistic 'parent' of a brilliant but naive graduate student. There is so much promise with this company, so much opportunity that they could capture if only they just made a real effort to make some decent revenue now, instead of simply doing the technical work to 'perfect their products' and expecting that they will be recognized and rewarded for good technical work. On perspectives ... MSFT Vs Novell ... upthread many people seem to think that MSFT is 'dishonest', or 'cheating' because they sell what the potential customers want to buy ... before making it work (in many but not all cases). And most of these folk appear to believe that Novell seems to be 'pristine' because they would rather make the Software 'work properly' before allowing customers to buy it. IMHO ... Novell folk are really much too naive! MSFT is only doing what makes sense in the Marketplace ... almost all of their competitors have missed the most important point about the PC Software business. The 'rules' of the marketplace are NOT the same as either the Hardware market or other Computer Software markets ... and most importantly: MicroSoft makes the rules! By now there should be no doubt in anyone's mind that people will buy (at unit prices of < $99 at least) almost any packaged software that hints that it will perform most of the functions that the purchaser is interested in. MicroSoft excels at finding out what the purchasers are interested in ... then makes 'packages' wrapped in the right kind of language to persuade people to buy them ... they usually attempt to fill the packages with some working software, and frequently succeed ... and those times that they fall short, well ... sorry folks! ... those bugs will be fixed in the next release, at a bargain price of $29 (or something else fairly low). The purchasers don't seem to mind, they now expect this kind of transaction. Novell seems to feel that it is 'beneath them' to engage in the same kind of sales tactics ... and that sooner or later the purchasers will come around to support the 'Novell way' of making the products robust before allowing them to be sold. This is a fairy tale that will not come true ... and this is the premise that the entire company seems to use as the foundation for all of it's business plans. I thought that Schmidt, and recently Slitz would replace the 'fairy tale' planning with something based on reality ... if they have I can't see it in working form yet ... but, I do know that the effort was and probably still is being made. In reality from both a purchasers and vendors perspective what really happens is a 'subscription' to rolling software releases is established ... with more and more of the desired functions being delivered with each 'release' (or fixpak, or service update) ... AND most importantly ... usage patterns and expectations of Interface interactions become more and more firmly tied to the design of the FIRST product purchased. This makes it more and more difficult to switch to a 'superior' product later ... too much 'conversion' and re-learning to accomplish. So ... while Novell has working technology that is anywhere from 2 to 3 years ahead of Microsoft's ... and the lead seems to be growing ... MSFT is busily collecting small amounts of money and securing future customer loyalty while dealing with complaints about inadequate products and deferring solutions to future releases ... and Novell is busily telling prospective purchasers ... sorry! we can't let you play with that product yet, but come and see this really cool demo instead! ... Oh, of couse we can't accept your money yet, the products aren't perfect yet! Another important point that seems to be not getting adequate attention from Novell's management is MSFT's 'competition model' ... although their marketing model is impressive, what really makes them most successful is how they compete ... they are the only company that I know of that specifically 'targets' competitors for the purpose of eliminating them from the marketplace ... about 4 years ago, Novell and MSFT were pretty close to even in terms of future results expectations (and they were 'targeted' by MSFT) ... Novell folks grew tired of the 'fight' with MSFT and attempted to change the marketplace rules to become more co-operative with MSFT ... and MSFT took advantage of the opportunity Novell's management gave them and used it to damage Novell's marketing ability, only within the last 6 months has Novell come to understand the significance of this set of events. Now MSFT doesn't seem too worried about Novell anymore, they have too many other 'distractions' ... while Novell still has most of the technical and marketplace advantages ... but doesn't seem willing to use them! Now they (Novell management) seems to prefer 'sitting on the bench' instead of competing agressively. And the bulk of the company is still following the 'old' product development & marketing model ... believing that 'someday' the customers will once again value good engineering more highly than effective marketing. My comments are intended to persuade them to 'get off the bench', get into the game ... if they start making sales, they'll lose their naive attitude ... and probably use the advantages they still have before they lose the opportunity permanently. Kind of like seeing a brilliant University grad that is unwilling to fill out a job application ... but still somehow expects to get a great job. Naive, possibly even stupid! That's what I'm concerned about. And, most stupidly on my part ... I was more concerned about helping the company succeed, helping the Novell employees with their own success ... than my own investment success. I got 'pooped on' for my efforts ... and now it's time to re-think what I've been doing with my money and time. I guess that I've been just as foolish as the Novell folks that I've been trying to help ... only just in a different way.