Nine months after announcing its One Net strategy, Novell claims to be seeing positive results . . . results that are just starting to be reflected in the company's quarterly earnings reports. Customers, analysts and partners apparently have started accepting Novell's sweeping move away from its legacy NetWare operating system to a variety of open systems, multiplatform applications that are designed to exploit the Internet. But few company watchers stand ready to judge the effort a success at this early stage.
Novell's One Net strategy blurs the distinction between the networks users deal with every day. It treats a company's LAN, WAN, intranet, extranet, telephone network, the Internet and the computers and devices they use away from the office as a single network consisting of multiple operating systems and diverse equipment. Novell says that to safely conduct business on the Internet, users need to have directory and security services that span whatever operating system or equipment is encountered.
Customers see the strategy as a move in the right direction.
"We had a vision of one network before Novell even published its One Net strategy," says Chip DiComo, network manager for shipping firm Hellman Worldwide Logistics in Miami. "In July 1999, I presented a plan of how we were going to build a single network based upon a directory. Our network corresponds to Novell's One Net and is a huge success and a reality now."
One Net includes an array of packaged software, appliances and hosted services for large companies, OEMs and service providers. Supported operating systems include Windows NT and 2000, NetWare, Unix, Linux and limited OS/390. Novell will continue to market NetWare via channel sales and hosted services.
Partnerships are becoming increasingly important for Novell, and some experts believe the company needs to be more aggressive in that area. Novell acknowledges that it can't do everything itself, but has only recently started enlisting help from companies such as DeLoitte & Touche, Marchfirst and Cap Gemini Ernst and Young.
"If Novell continues with its timid approach to acquisitions, an inability to strike strong partnerships and a tendency to try building everything itself, the company will continue to lag behind companies such as the Sun-Netscape Alliance and IBM, which are pursuing similar cross-platform strategies," says Jamie Lewis, research director at The Burton Group.
Novell has also repositioned GroupWise and NetWare to fill multiplatform, multiprotocol roles. GroupWise works across NetWare, Windows NT and Solaris, while Novell moved NetWare to IP from its proprietary IPX protocol.
The next version of NetWare accommodates multiple processors in a server and will have storage services that work better with Linux, Win 2000 and NT, and Solaris clients. NetWare 5.1, the company's current network operating system, was introduced earlier this year as the first application server for NetWare environments, but so far has failed to garner new customers.
Cultivating a new image is important to Novell's comeback chances. The good news is that it's Novell's newest products that have garnered the best reviews. Those products include Internet Caching System (ICS), Content Exchange, DirXML and Novell Directory Services (NDS) eDirectory. ICS works with Intel servers from most systems manufacturers; Content Exchange is used by GlobalCenter, a large Web hosting firm; and a variety of corporate users have adopted DirXML and NDS eDirectory. Many users of these products, such as True North Communications and CNN, do not have NetWare in their environments.
True North, a global advertising company in Chicago, has Solaris, NT and Linux servers located in 280 cities. Richard Reid, manager of worldwide messaging and directory services, chose NDS eDirectory when the Netscape directory he had installed failed to properly replicate directory information. He put in NDS eDirectory for its replication capabilities and for its ability to work across network environments.
United Airlines bought 110,000 licenses of DirXML, eDirectory and iChain to build a customized Web portal for its employees and business partners. GlobalCenter chose Novell's Content Exchange for its combination of caching, acceleration and customer usage billing. In addition, Novell has partnered with Akamai, Digital Island and Mirror Image, three of the leading companies in Web acceleration technology.
Novell this year also announced an investment of $20 million with Sun and Compaq in CMGion, a wholly owned subsidiary of Internet giant CMGI. CMGion will build a worldwide network of data centers that will deliver content, data and applications over the Internet. Novell will contribute its directory, caching and digitalme technologies to the project.
The company has also been pushing a number of products introduced this year, ranging from a universal Yellow Pages directory called eGuide to its standards-based Novell Internet Messaging System. It has started to sign application service providers to host NetWare, GroupWise and BorderManager for small and midsize businesses.
For Novell to thrive long-term, however, the company first needs to halt a string of disappointing financial results. Novell reported a break-even performance for the fourth quarter of 2000. Although the company reported revenue from network site-licenses to large businesses and OEMs grew to $750 million from $669 million and accounted for 65% of total revenue in fiscal 2000, it also cited a 47% decrease in packaged software sales to small and midsize businesses.
In the coming year, Novell plans to introduce a secure transactions component to its ICS product, spin off its caching and content delivery division and make more of its recently introduced Novell Portal Services. The latter lets users create Web desktops that provide access to applications they use and many of the products the company offers.
Novell's Net Services strategy, which encompasses One Net, demonstrates the degree to which Novell must transform itself in order to succeed.
"How aggressive Novell is willing to be in creating that transformation will have a significant impact on the company's long-term position," The Burton Group's Lewis says.
| New within the One Net lineup Novell introduced a number of products this year as part of its One Net initiative | |
|---|---|
| Management | |
| Security | |
| Web acceleration | |
| Collaboration | |
| Storage | |
| Directory | |
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