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Novell Up Close

By Christy Hudgins-Bonafield Pray. That's what many top analysts suggest. But after six months researching Novell and taking the pulse of its chief decision-makers, we're convinced Novell may yet have a fighting chance not only to retain much of its installed base but also to take a leadership role in technology innovation.

That chance is premised on the vision and pragmatism of a single man: Novell's chairman and CEO, Eric Schmidt. Novell isn't headed in the wrong direction, Schmidt asserts, it just hasn't been moving quickly enough to that destination. And Schmidt says he is convinced he can remedy that problem by providing focus and bumping up the pace.

If ever Novell needed a savvy technologist at the balustrades, it is now. Novell is under siege on all fronts. Hist orical change, in the form of the Internet, caught the company unprepared. From one side, it is being pummeled by the marketing muscle of Microsoft Corp.; from the other, by standards-based innovation from Netscape Communications Corp. From within, Novell must counter the complacency engendered by years of networking leadership. It must shape up, too, after a period of corporate corpulence and an expansion spree that left it bulging with fatty Unix technology and superfluous application acquisitions (see "Off Course," on Network Computing Online at www.NetworkComputing.com/818/818f2.html).

Novell's chance for success lies in its finding a way to bar Microsoft's inroads into its base, especially low-end networks, while it goes about the task of reinventing itself. And Schmidt, Sun Microsystems' former chief technology officer, is the man in the lab coat (see our interview with Schmidt on page 90). In his vision, Novell continues to derive its primary revenue from the NetWare platform, with customers draw n to that platform by revenue-producing directory-enabled services: single sign-on, inventory management, authentication and commerce. To succeed, Novell must pick up the pace, lead the competition in directory services and the Internet, and build the better mousetrap.

One of Schmidt's first actions upon taking the helm at Novell last April was to almost double the 165 engineers in the Internet Infrastructure group responsible for Novell Directory Services (NDS) and applications.

Schmidt gives himself two to three years and any or all of $1 billion in cash to turn Novell around. The timeline is founded on the "network effect"--a belief that customers will stand by Novell for a certain length of time based on factors such as loyalty, the risk involved in change, and training and investment in existing applications.

Significant change isn't apt to surface until the first quarter of 1998, although a major announcement from the company is expected sometime in November. Meanwhile, Novell is hard at work tightening customer hooks with low-cost or free products such as Application Launcher, which help to reinforce its Internet and directory service directions.