Novell Inc claims that the healthy third quarter results it posted yesterday are proof that its Directory Services strategy is working. Novell posted third quarter revenues of $272m, up from $262m in the second quarter, with net income of $27m, up $7m from the last quarter. Last year, the Provo, Utah company reported a third-quarter net loss of $121.7m on revenues of just $90.1m. Revenues for the first nine months of fiscal 1998 were $786m, compared with $738m in the same period of 1997, with income of $60m compared to an $85m loss last time. CEO Eric Schmidt said he was pleased with the results, particularly in the run up to the release of NetWare 5.0 next month – an event that would usually see sales of the current version of NetWare drop. Any such drop was masked by strong sales of directory-enabled products, the new ZENworks zero administration toolset introduced in May, and network services products such as Border Services, he said. The ManageWise product line was one of the weaker areas, but the quarter saw Novell’s highest ever sales from large network accounts and OEMs of $165m, 60% of its total revenues. These sales were driven by Directory Services, the company claimed. Directory-enabled NetWare and other NetWare servers contributed $160m in the third quarter. Geographically, Novell was strongest in the US with $162m in revenues. Europe contributed $72m during the summer quiet period, while Asia was weak at $19m, or 7% of the total. Improvements there will come only slowly, the company warned. Novell’s new glow of health can be seen as a realization that Microsoft Corp’s competitive Active Directory and NT 5.0 products are still a long way from reaching the market, and seem to be moving back further every month. NetWare 5 has now been cleared for release by Novell’s five biggest beta test sites, is being used internally at Novell itself, and is due to be launched on September 14 in San Francisco.
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