Veitch Speaks: Novell, the comeback kid
Things aren't what they used to be. They never are in this fastest moving of businesses but that said, what an amazing turnaround Novell is making.
Novell today looks a more admirable comeback kid than Bill Clinton, but there seemed to be plenty of reasons to question the company's future just a year ago. Novell suffered from rapid turnover of executives, it made a humiliating mess of the WordPerfect acquisition, it was losing money and vast amounts of market share to Windows NT, and it seemed generally rudderless.
Against these drawbacks, Novell could count on a huge base of NetWare customers who weren't going to go away in one fell swoop, and it had a cash pile totalling over $1bn. More than this, Novell had a simple strategy to refine its focus on network security and management while meshing all its products with the Internet and pouring a healthy dollop of Java into the mix. It may not be showing too clearly in revenues just yet but Novell is on the up after laying the foundations with a series of great products: Novell Directory Services (NDS), Border Manager, ZenWorks and NetWare 5.0.
It is with NDS that Novell has its best opportunity to complete the still unusual double -- of being a company that develops not one but two breakthrough products, the first being NetWare. Ironically, one of its key reasons for NDS existing is the old NetWare nemesis itself, Windows NT. While Microsoft has done a terrific job convincing enterprises that NT is a good choice of application or messaging server, IT departments have been left to pick up the mess of server and network sprawl. The complex spaghetti of today's networks and the associated soup of passwords, domains, user rights and so on is one of the most pressing problems for IT managers. Today top marks to Novell for spotting this and developing an answer that goes right to the heart of the problem.
Having established the need for directories, Novell shows every sign of delivering the solution. Only last month you could justifiably criticise Novell on the grounds that only NT and NetWare were supported, the company has moved to address this. Pairing off with Oracle and its Oracle Internet Directory (OID) to integrate directories is a move that is good news for any enterprise that has the leading network operating system -- NetWare -- and the leading database -- Oracle. By pledging to support the most important Unix versions and server operating systems, Novell has shown that it understands the need to put its directory services on as many platforms as possible.
NDS 8, just into beta, is another step forward, sticking to standards through a native LDAP 3 implementation, and scaling to the sort of mindboggling numbers that will satisfy even telecoms firms and Internet service providers.
Perhaps the most surprising aspect of Novell's turnaround is that it has successfully reinvented itself without spending too much on mergers and acquisitions. I would expect to see some investment from Novell this year on companies or technologies that will help its vision of managed networking. A big buy is probably out of the question, but given the way that Oracle is cosying up, a sale of Novell is not beyond the realms of plausibility. Hewlett-Packard and Compaq have also been mentioned as potential buyers, even though Novell's stock is riding high. I hope there's no sale.
An independent Novell could do a very useful job at being the traffic cop at the heart of enterprise networks.