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


To: Loring who wrote (26102)3/18/1999 4:50:00 PM
From: Loring  Read Replies (1) | Respond to of 42771
 
This may be already old, dated 3/13/99. So apologies if you've already seen it. It is being passed around the IT folks at a major corporation in L.A. FYI

NetWare vs. NT 4.0: The Debate Rages On Page 1 of 4
gigaweb.com 3/15/1999
NetWare vs. NT 4.0: The Debate Rages On

Date: 03/13/99
Author: Laura DiDio
Catalyst: Conversations with users
Question: What are the pros and cons of NetWare 4.x and 5.x versus
Windows NT 4.0?
Answer: This question is being raised with increasing frequency these days by many of your peers in Corporate America. The fact that it is being raised at all is a direct consequence of two things: Novell's resurgence over the last 12 months and Microsoft's failure to deliver Windows 2000 and the Active Directory.

The NOS Market: 1997 to 1999
Before delving into specific economics, let's take a look at this issue
from the historical perspective. Novell's problems during the last
three years --- lack of focus, internal strife and a couple of quarters of red ink --- gave Microsoft's sales and marketing forces (the most
aggressive in the industry) just the opening it was looking for to help
Windows NT gain a giant foothold in corporate networks. Microsoft
very sagely realized that in order to sell its fledgling NT 3.51 and 4.0 operating systems, it had best go straight to the top. This Microsoft did in a very convincing manner: CIOs, CEOs and CTOs bought the message that Windows NT was the wave of the future and that
NetWare was merely a legacy file and print operating system and not
the platform to take the corporate network into the millennium. To
help buttress NT sales, Microsoft engaged in steep discounts ---
sometimes even giving NT licenses and server hardware away for free
to large and strategic accounts. Microsoft is certainly not the only
company to have used such tactics, but no other firm has done it quite
so masterfully. The strategy has paid off big time: Upper
management, often to the chagrin and over the protests of MIS
managers and rank-and-file network administrators, dictated that
their firms would migrate to Windows NT and abandon NetWare. As
a result, Windows NT has out-shipped every other rival OS platform
during the last 12 months and now commands about a 39 percent
market share according to companies like International Data Corp.
and Dataquest, Inc., which track market share numbers. NetWare
currently commands about 37 percent market share according to most
industry forecast houses. Such was the surging momentum for Windows NT that a year ago the conventional wisdom held that due to Novell's financial woes, NetWare would be consigned to niche status in most organizations and would eventually disappear, subsumed by Windows NT.

Total NT Domination Delayed

But a funny thing happened on the way to Windows NT's total
domination of the NOS market. Novell CEO Eric Schmidt got the
Provo, Utah firm back on track and delivered on every promise.
While Novell certainly still has issues, Schmidt nonetheless
accomplished that rare feat: delivering every product on time (in
some cases ahead of time, i.e., NetWare 5.0). Additionally, the
products that Novell has shipped under Schmidt's stewardship have
also been notable for their lack of bugs and reliability. What a novel
concept in the software industry, where glitch-ridden 1.0 releases are
the order of the day. While Novell was quietly delivering (bad
marketing move, by the way) products like NetWare 5.0,
BorderManager and ZENworks, which truly delivered better
management, scalability and total cost of ownership to the enterprise,
Microsoft kept on hosting scalability days. These exercises were well-orchestrated marketing attempts complete with testimonials from top
Fortune 500 accounts, all attesting to Windows NT's scalability and
reliability. Microsoft also outlined all the advantages of its
forthcoming Windows 2000 and the Active Directory. Microsoft also
held a well-publicized press conference with Cisco Systems, Inc. at
the Spring Networld+Interop two years ago to announce that the two
industry powerhouses would partner on the Directory Enabled
Network initiative, an effort designed to allow the Active Directory to
manage internetworking devices like routers and switches. That effort
has of course been delayed, along with Windows 2000's and AD's
ship date. Giga is fairly confident that Microsoft engineers are now in
overdrive and will most likely ship Windows 2000 in relatively good
working order by year's end. Nonetheless, Novell's resurgence,
coupled with the undeniably late ship date of Windows 2000, has left
the door open once again for both NetWare, Unix (especially Linux).
This is not to say that Windows NT does not still have incredible
momentum. It does. And Novell still faces an uphill climb in its battle
to thrive against its onslaught. But NetWare is not the 100-to-1 long
shot that it was 12 to 18 months ago.

NetWare 4.x and 5.x vs. Windows NT 4.0
The ongoing NetWare vs. NT debate often takes on the overtones and
fervor of a religious war. For the record, Giga is agnostic and neutral
in these so-called vendor and platform wars. Giga also believes the
market is large enough and diversified enough to accommodate
several network operating systems including Windows NT, NetWare
and Unix.

I have addressed the issue of the pros and cons of NetWare vs. NT in
other Giga IdeaBytes, most notably Upgrade to NT From NetWare
Can Triple Users' Costs, [876094-LD98], Laura Didio.
There is no one absolute answer to this question. Whether or not
NetWare 4.x or 5.x is a better, more cost-effective solution than
Windows NT 4.0 (and I am confining this discussion to NT 4.0 since
Windows 2000 will not ship for at least another eight or nine
months), hinges on one question: What is your organization's
infrastructure and what are you using the network operating system
for?

If your business consists of a limited number of users (2,000 or less),
if the network is used mainly for departmental or workgroup
applications and if your network administration is centralized, than
Windows NT 4.0 represents a very good solution. One of the
advantages of Windows NT lies in its strength as an application
server and the integration between the underlying NT Server platform
and the BackOffice suite of products. While businesses are advised
not to run multiple applications on a single NT Server, the Microsoft
platform nonetheless has the edge over Novell's NetWare in the
applications space. To date, most of Windows NT's encroachment
into both the NetWare and (to a lesser extent, the Unix) shops has
come in small and mid-sized organizations. In fact, Microsoft
recently cut the price of its nascent Windows Terminal Server
offering, specifically to wrest market share away from small Novell
NetWare shops (see IdeaByte, New Terminal Server Pricing Takes
Aim at Novell, Citrix, [790848-LD99], Laura Didio.

However, if yours is a large enterprise shop with thousands of users,
including a large contingent of remote branch offices and mobile
workers, where the economies of scale demand that your business
deploy an enterprise-wide directory services database, then NetWare
4.x and 5.x is currently the better choice. Novell Directory Services
(NDS) has been shipping for a full six years. In its current iteration it
is stable, reliable and robust. Additionally, Novell executives are, by
necessity, providing better integration between the NetWare and NT
environments, especially via NDS for NT 2.0 (though we are still
waiting for Novell to ship the pure TCP/IP version that is due out in
April).
Novell is hardly standing still waiting for the Active Directory to ship within Windows 2000. At a recent analysts briefing, Novell engineers successfully demonstrated that a single NDS directory could handle in excess of 500 million objects. Active Directory, which is still in beta test, is not even close. This may change when the final product ships, but it is still a big question mark. Another factor to consider for large organizations: Since its launch in September 1998, NetWare 5.0 has proven amazingly reliable, with minimal bugs. And NetWare servers are famous for going months or even years without requiring a reboot.

Microsoft is currently working on hardening the NT operating system
and eliminating many of the underlying factors that cause NT to
require more frequent reboots than NetWare, but it's not there yet.
Simply put, the combination of NDS, and the adjunct ZENWorks
desktop management and BorderManager products, means that it
takes fewer administrators less time to perform more work. Anecdotal
evidence based on interviews with dozens of large corporations
suggests that it requires about one-third the administrative staff to
perform daily routine administrative tasks. In other words, a business
that elects to deploy multiple Windows NT 4.0 domains will wrestle
with the tedious task of managing PDCs and BDCs. To do this
effectively requires very skilled NT Administrators. That brings us to
another point: There is currently a well-documented shortage of
skilled NT administrators and they can command a premium --- as
much as 20 percent to 30 percent in major geographic markets.

Conclusion and Recommendations
In summation, Windows NT Server and NetWare both offer some key
lures for users.

l. Novell Directory Services (NDS) offering enterprise
management and scalability
2. An installed base of 50 million desktops that are heavily
invested in NetWare
3. A head start in penetrating the market for global services
4. Allies and users who fear an all-Microsoft world (IBM, HP,
SCO and Sun)
5. Six years of experience as an enterprise NOS including
directory services
6. Very large contingent of skilled CNEs, who are very familiar
with the ins and outs of the operating system
7. Incredibly reliable; rarely crashes

Windows NT Server's advantages:
1. Microsoft's domination of the desktop
2. NT's strength as an application server
3. Strong relations with developers and the Microsoft Developers
Network
4. Unparalleled marketing muscle and brand name recognition
5. Good integration with the BackOffice suite of server products
6. Large and growing number of ISVs that are writing myriad
applications

Giga believes that Microsoft is an iterative company with
unparalleled resources. Windows 2000 will some day equal and
possibly better its two main rivals --- NetWare and Unix --- in
features and functionality. But it's still a question mark. And indeed
for many businesses, the Microsoft brand name alone is enough of a
reason to install Windows NT --- many companies strongly believe
that even if Active Directory doesn't initially offer all of the features of NDS, it's good enough.

Copyright 1999 Giga Information Group Inc.
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