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

To: Spartex who wrote (23549)	8/23/1998 11:48:00 PM
From: Paul Fiondella	Read Replies (2) \| Respond to of 42771

Eric Schmidt's dangerous gamble The message coming from Eric Schmidt in last Thursday's conference call is that he has successfully steered Novell toward direct licensing of software and away from box sales. Novell is now exactly where the Novell BOD and Bill Gates have always wanted Novell to be---an enterprise only company selling corporate strength NOS systems to corporate customers. Networks in small offices, on desktop PC's and eventually in the home will all become the property of Microsoft Inc. apparently with Novell's blessing. Having made this dangerous gamble long before Schmidt came on the scene, the Novell BOD hired Schmidt to execute the plan --- which he has done masterfully. Build us the corporate strength NOS!!! to sell to our corporate customers. Schmidt's biggest gamble was to listen to them and ignore the PC end of Novell's business. To his and your and our peril. ----------- Some of the people that follow the numbers may have noted the questions on THursday of one Mr. Levy. He referred to a Gartner survey contending that only 3-5% of Netware 3 and 4 customers will upgrade to Netware 5. You may have caught Schmidt's comment that "no one knows" what their adoption rate will be. "Our customers move slowly." "Our people promoting level 5 report great interest but we don't know." It is further worth noting that Schmidt estimated that there were 40 million directory enabled "seats" out there in the Netware world. In other words if the future of the company has been bet on the success of Netware 5 in the enterprise and the future growth of the company has been bet on NDS in an IP world, you are looking at only 40 million customers! In the future revenue will grow with the number of directory enabled seats and with products directed to those seats based upon NDS capability. Yet I see no great effort on Novell's part to define for its customers the most visible corporate use of "IP" enabled servers. In fact I hear nothing at all from Novell on how they expect their customers to use the Internet tools they are about to sell them. I don't know what to make of this!!! Having said all of this, I do expect Netware 5 to sell. It is a terrific product. Unfortunately it reminds me of my experience at Bell Labs many years ago. At that time the VAX was a new computer and the Labs had bought some 50 million dollars worth of VAxes and put them in this huge room. Need a VAX....enter the room...pick a machine...and if you knew VAX sys admin procedures the machine you got your hands on was yours (until the ops took back control). In other words noone knew what to do with these systems. The UNIX was buggy, the C compiler wasn't finished etc. etc. So it is that Schmidt is moving Novell's customers into the Internet age---without a plan, without a map, without a killer app. I call that a dangerous gamble.