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

To: DJBEINO who wrote (19732)	1/20/1998 8:48:00 PM
From: George Papadopoulos	Read Replies (2) \| Respond to of 42771

Lan Times January 19.1998 issue lantimes.com Novell starts to see the light in connectivity By Philip Allen Johnson hings have looked gloomy for Novell Inc. lately, but there may be some light at the end of the tunnel. Several years ago Novell was the driving force in PC connectivity, with roughly 70 percent of the NOS market. Then Microsoft Windows NT Server came bursting on to the scene. International Data Corp. estimates that in 1997 Microsoft Corp. sold more than a million copies of NT Server. The majority of those sites might otherwise have bought NetWare (or IntranetWare). Trends seem to indicate that Novell is selling fewer licenses but getting more revenue from the licenses it does sell. This suggests that corporate users are consolidating to fewer NetWare servers, but bigger servers that support more clients. Many of these seem to be longer-term Novell sites in larger corporations. Windows NT's greatest success has been in penetrating newer, smaller sites and corporations. The major attack point that Microsoft has been using against Novell is NT's capability as an applications server. Windows NT has a rich environment for applications developers, offering easy-to-use tools, a reasonably solid platform for their applications, and Microsoft's established leverage on the desktop. Novell's NLM environment is more difficult for developers. NT also has been leveraging other BackOffice components such as Microsoft Exchange and SQL Server. In new territory Novell's advantage lies in its installed base. In round numbers, 80 percent of all large corporations have NetWare as part of the computing landscape, primarily for PC file and print services. They normally don't throw out current working solutions just because new technology becomes available. On the contrary, they first try to find new uses for existing solutions. Some corporations are beginning to use their existing NetWare servers as high-speed intranet servers. They see this as a way to gain access to their own wealth of information stored on departmental and corporate PC servers. Of course, the first job of a World Wide Web server is to receive a browser request, find the corresponding HTML (HyperText Markup Language) file on disk, and transmit it over the network. Although the protocols used are somewhat different, this is fundamentally the same job that NetWare servers have been doing for PCs. Refocusing this functionality on the Web makes sense for Novell and opens some interesting growth opportunities. Despite this foundation, to be successful in this new direction Novell needs help on the applications-server front. It looks like help may be on its way. Oracle Corp. would love to see Novell succeed, particularly if that success comes at a cost to Microsoft. After successfully serving HTML-based and Sun Microsystems Inc. Java-based applications, next on the list for a Web server is to serve databases. Last month Oracle announced the availability of Oracle8 and Oracle Application Server on the Novell platform. This partnership gives IntranetWare a reasonably complete solution as a Web server for intranet applications and database management. Novell's announcements regarding Moab, the next release of IntranetWare, indicate its efforts to provide services in the Java applications environment. Oracle, JavaSoft Inc., and others are supporting this work. If they can demonstrate that IntranetWare is the fastest, most manageable, and least costly Java platform, Novell could win corporate business from organizations that are committed to developing in Java. As noted above, the first place these IntranetWare servers will be deployed is in Novell's installed base. The key for Novell is not so much to open new sites as to continue growth based on happy customers at current sites. This is the key to blunting the Microsoft attack. A high-performance, general-purpose Web server with integrated database capabilities goes a long way toward addressing the applications server needs of many departmental and corporate users. After a long time in the dark, Novell may see that glimpse of light. Philip Allen Johnson is a market-research consultant in Fremont, Calif. Contact him at paj@pajc.com.