The Intranet is top of the to-do list for every chief technology officer worth their salt as they busy themselves installing browsers and Web servers. Novell has just woken up to find it might have the perfect package to run your Web site. But is anybody listening? asks Susan Amos from our sister publication, Software Futures.

The software industry is littered with examples of companies that once dominated their chosen market sector, took their eye off the competitive ball, and hence got trounced by their more alert rivals. Such would appear to be the case with Novell. For the last decade, if you talked about network operating system (NOS) you were talking NetWare. And then last year the company seemingly forgot all about the 60 million users of its bread and butter networking software. It was as if the Orem, Utah-based company sent a memo round forbidding all mention of the product that had made its fortune. Instead head honcho Bob Frankenberg could oft be seen gazing dewy-eyed into the distance warbling about a giant Novell network of the future, with a billion connections by the year 2000 and smart houses where you can open your fridge door from the PC on your office desk. Without so much as a straw poll to ask if anybody would actually wanna do that. The timing of Novell’s embedded NetWare experiment couldn’t have been worse – leaving the door open for desktop upstart Microsoft to get serious about linking a bunch of Windows PCs to a server, with the deadly NetWare killer Windows NT. Now Frankenberg is departed, and hopefully has taken the papier mach miniature of the smart house with him. His position is vacant, and candidates whose CV runs to network operating systems embedded in household appliances are not invited to apply. Also gone to pastures new is Steve Markman, executive vice president and general manager of Novell’s product group, off to head up personal digital assistant software provider and Apple spin-off General Magic. Whoever takes the Novell top spot will have a tough job on their hands. They have to get the company noticed. They must be in-yer-face and Internet savvy. A new chief executive has got to get people thinking Intranet = Novell IntraNetware. (Version 4.11 of NetWare has morphed over night into a Web server with the addition of a few bits and pieces.) And this is not going to be easy at this late stage (several months behind market leader Netscape), despite the fact that file-and-print, Novell’s forte, is exactly what you need to set up a Web server.

If they’ve any sense, a new leader will trash the current advertising campaign which limps along like this, We’ve taken the lion’s share by keeping a low profile. Still, at least the company knows it’s got to pull its finger out and up the marketing budget. Marketing aside. A new CEO will have to dig the company out of the financial hole it’s dug itself into, as revenueand profits are locked into a downwards spiral. For Novell’s third fiscal quarter ending July 31st 1996, sales were down massively to $365m from $538m in the same quarter last year. Profits were halved from last year’s $102m to $59m. Last year’s figures were swollen by revenuefrom WordPerfect (acquired in 1994 and sold to Corel earlier this year) – a fact the company uses to play down this year’s shrunken sales figures. That may comfort staff and shareholders for a brief moment, but there’s no getting away from the bottom line that revenuefrom NetWare 3.x is shrinking faster than sales of NetWare 4.0 (which started shipping in January 1994) are growing. The company predicts it will sell one million units of NetWare this year, but revenues will be flat, because many units are mere upgrades and not juicy new sales. Yes, NT is kicking Novell while it’s down. One bright spot in the financial doom and gloom is that sales of Novell’s email and calendaring product GroupWise are up 100%. But an email product is hardly going to right the capsizing networking ship – it only accounts for a measly 5% of total business. Novell, suffering from delusions of grandeur, hope

s to clean up on the aging MS-Mail base, 80% of whom, it claims, run the email system on top of NetWare. Microsoft Exchange, the successor to MS-Mail, does not run on NetWare – so Novell thinks MS-Mail users will stick with their familiar network operating system and buy GroupWise as a replacement, rather than stick in a Windows NT box and run Microsoft Exchange. Has nobody told the company that applications trail operating systems with them, and not the other way round?

Caretaking Novell at the moment is Joseph Marengi, for the past four years in charge of running the worldwide sales organization. He was recently bumped up to company president following Frankenberg’s ousting. He thinks he’s in the running for the top spot, but we think his donning of the mantle of the saviour of Novell is perhaps a trifle too premature. Markman recently described Marengi as a chew-’em up, spit-’em-out, hard-nosed guy who won’t take no for an answer in PC Week. The same magazine’s profile piece dubbed him Marengi the Hun, following an ex- employee’s remark that Joe had all the management style of Attila. Marengi took it as a compliment! Hmm, maybe that’s what he’s like at home, but he certainly didn’t come across that way at a recent customer presentation. Software Futures found the guy a little too humble to be Billy the Kid. We’re gonna talk to customers about what we’re doing. We’ve done you a disservice and not exposed you well enough to what we are doing and where we’re going. He’s obviously still honing his mean streak on a bunch of tin cans back at the ranch. Novell has thrown a gateway and a few browsers at netware 4.11 in order to make it big as a full service Intranet provider

SO WHAT DOES MARENGI HAVE IN STORE FOR THE COMPANY?

To halt the downward revenuespiral, it looks like what Novell is going to have to do is lay off at least some of its 6,000 staff. A flatter structure is called for. Marengi has already moved swiftly to alter reporting structures at the top of the company. Now he has all the big wigs reporting to him: the chief technical officer, and the executive vice presidents of Novell’s three product groups, as well as the senior vice presidents for legal, human resources, marketing, sales and engineering. Ask him what lay-offs he’s likely to make and you hit a raw nerve. Can I get some help? I didn’t understand that question, he answers evasively. Marengi is a firm believer in Novell Directory Services (NDS), renamed about a year ago from NetWare Directory Services after it was liberated (on the slide projector) from the NetWare platform. He thinks it’s the goose that lays the golden eggs, but in the next breath admits it is the biggest misunderstood technology in the industry. Well that would be because the company hasn’t even tried to explain it, Mr Marengi. But he pledges to put that to rights. Novell intends to educate the world about NDS, holding it up as the glue that brings the client and the network together, in a unified user directory for all networked applications. If you’re having trouble picturing NDS, he compares it to an ATM (the hole in the wall you get cash out of, not the cable in the ground kind). An ATM does four things. It maintains a large database of objects. It manages the relationships between objects. It does verification. It gives out money, which is the equivalent of a directory giving access to devices. Gottit? If Novell is banking on NDS as its golden goose, then it had better get the bird laying pretty damn quick. NDS is tied fair and square to NetWare 4.0 at the moment. Nice if you’re thinking of upgrading from 3.0 to 4.0, but of no use if you’re kicking the tires of Windows NT as a general purpose applications and file-and-print server. Windows NT 4.0, just launched, does not have directory services. Indeed Microsoft’s network operating system will not get them until Windows NT 5.0, due into beta next year. But like it or lump it, Novell ought to be going all guns to get NDS ported to NT, as NetWare is beginning to look like a legacy NOS. In real life, the timetable runs like this: In August Novell demoed NDS on Windows NT, and by the end of the year is aiming to get a production release out. We think the company should swallow its pride and act quickly to reinvent itself as a Microsoft value added reseller (VAR), and get NDS blasted out to the market before Microsoft throws its hat into the directory services ring. And while it’s at it, Novell should also make sure NDS runs on as many platforms as possible, in an effort to make NDS an industry standard. If Novell doesn’t do it, nobody else will. A step in the right direction is Novell’s port to Hewlett-Packard’s flavor of Unix. An NDS-ed version of HP-UX is due out at the end of the year. And you may have blinked and missed the announcement but Unix-on-Intel outfit The Santa Cruz Operation is now shipping UnixWare with NDS in the mix. So once NDS runs on NT, Novell will be ahead of Microsoft, even if it is not ahead of bit player Banyan. The Westborough, Massachusetts-based also-ran is planning to ship its version of directory services for NT, StreetTalk, this month, to sit on top of version 7.0 of its operating system, Banyan Vines, also due out this month.

Microsoft, once rumored to be sniffing around Banyan for its directory services, looks to have gone cold on the deal in favor of building copycat functions into NT 5.0. Network Clinic, a London-based systems integrator has ten consultants running Novell networks for the likes of British Airways and British Telecom. Technical director Faris Sipi thinks NDS is the trump card in Novell’s hand, but that the company needs to play it right. Novell has an advantage in NDS but has not yet realized it. Having the best product is not a guarantee of success. Novell’s vision is for a network administrator to set up users for a financial application or word processing application from NDS. But to do this, an application needs to be NDS-enabled. And is Novell talking to ISVs to get them to NDS-enable applications? N-O spells no. Novell talks about doing things, Microsoft does things, says Sipi. Look at Microsoft and Windows 95. Microsoft said that to work with Windows 95, you’ve got to write 32-bit applications. And that got things going. So what is it that is stopping Novell make NDS a household name, we wondered? Could it be down to the fact that you can’t market something you can’t see?

INVISIBLE NDS

NDS suffers from the same problem as NetWare – it is an invisible product. You can’t demonstrate it to business people the way you can glossy new software like Internet Explorer 3.0, with slick Microsoft sales people and their headset microphones showing off interactive features and borderless screens. It is difficult to market something that could make a network administrator’s life a lot easier, but other than that, does not have the mission-critical ring about it that security products enjoy. The lack of visibility of NetWare is a big problem for Novell, when it’s selling up against Windows NT. As power users of Windows on the desktop work their way up to positions as system administrators, they plump for the network operating system with a familiar face, Windows NT, and not the faceless NetWare. It’s a shame Novell didn’t make itself a front-end out of DR-DOS, while it still had it. That would have given NetWare more of a fighting chance, points out one astute user. The company sold DR-DOS in July of this year ironically to ex-Novell chief executive Ray Noorda’s Orem, Utah-based company Caldera, which is now trying to turn back history with an anti-trust suit against Microsoft. Caldera alleges that Microsoft’s predatory practices have prevented DR- DOS from gaining market share over the last five years. Dream on, Ray.

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