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Novell’s Gillette tactic hurts Sun

Feb 05, 20032 mins
Enterprise Applications

* Sun blames poor Q2 loss on Novell's eDirectory giveaway

Popular wisdom is that Novell is irrelevant and has been for a few years. Microsoft, IBM and Sun see each other as competitors and everybody at least pays lip service to Linux. So it was especially interesting when Sun’s VP of software sales recently blamed Novell for Sun’s financial troubles.

Barbara Gordon claimed that Novell’s tactic of giving away eDirectory licenses undermined Sun’s sales and led directly to a $2.3 billion loss on reported sales of $2.9 billion for its second fiscal quarter. Well, to be fair, Gordon only claimed that Novell’s practice contributed to the loss, not that it caused it. But the folks in Provo probably celebrated anyway.

For years, a number of people have urged Novell to, in essence, give away eDirectory as a “Gillette marketing” tool. It was King Gillette who is credited with the tactic of giving away the razor so that he could sell users the blades. One of the reasons Novell’s vice chairman, Chris Stone, left the company for a while was his advocacy of the Gillette marketing idea. He was a champion of giving away the directory and then selling directory-enabled applications. One of the first things he did upon returning to the venerable networking company was to put this theory into practice. At least according to Sun, the tactic is working beyond Stone’s wildest dreams.

However, Sun is also in the business of giving away its directory service. Products such as the Sun One Identity Server, are really directory-enabled services that come bundled with the directory. You can still buy Sun One Directory Server (just as you can still buy eDirectory), but why should you? Find the directory-enabled application or service you want and chances are the vendor includes directory licenses with it. If not, it’s still worth asking if they do – the vendor might just throw in the licenses to clinch the sale.

What it means is that the directory has almost reached commodity status. Standardized interfaces (such as Lightweight Directory Access Protocol) – essentially identical features – plus little or no charge for licenses indicate that the battlefield has moved. It’s no longer important to try to differentiate the various directory products but to establish superiority in the application and service marketplace. A directory without applications could be interesting technology, but it won’t solve business problems.