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

To: DJBEINO who wrote (20228)	2/22/1998 9:59:00 PM
From: Jim McCormack	Respond to of 42771

Novell Purchase Would be Big Surprise... Just a couple of thoughts in the wake of the Compaq purchase of Digital and the Computer Associates bid for Computer Sciences. As many on this thread have opined in the past the "Professional Services" market is hot. No one seems to want to buy large software companies anymore - they want professional services companies. Firms are out to get the services revenues. Now can you make the case that Novell has a Service arm? I still think not. Novell remains committed to a channel model and will not sell direct ever in my opinion. I think that it is a real shame that Novell has such a bad after taste thanks to a failed merger strategy in the past. The bad history and the hard fast commitment to channel sales makes it less and less likely that Novell will be purchased... or worse yet that Novell will have the Guts to buy someone else to build in the service component to it's own business. NOTE: Novell should buy Cambridge Technology Partners. It would be costly of course. They have a market value of nearly $2.3 billion--more than five times its 1997 revenue of $407 million. Cambridge Technology, which is growing at a rate of 49 percent annually, specializes in fixed-cost contracts for rapid design and installation of IT systems. Eric talked about becoming a professional services firm - What the status? That has to happen for the share price to gain a multiple. The market is favoring those companies that choose to add a service component to the portfolio. IBM, CPQ, ORCL come to mind. So who is Dell going to Buy? One thing is for sure it will not be Novell. So what do you think - With all the Professional Services large Scale Mergers is anyone going to want to buck the trend and go after a product based company like Novell? Hey the CA bid is hostile to CSC so maybe this will become an established strategy. Usually you buy the people when you buy high tech so mergers have to be friendly - but in Novells case a hostile bid just might be perfect if it worked and even if it didn't it would put the fear of God back into management. Can't wait to see the earnings! Jim McCormack