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Business Week: The New Novell: Tough Enough to Fend Off Microsoft?

“Novell rebounded after new CEO Eric Schmidt reorganized the
company and rebuilt its product line to replace the NetWare
operating system as the company’s flagship program. In its place,
Novell introduced Novell Directory — an uber-directory that
organizes and controls all others on a network. The current version
of the product, called Novell Directory Service 8.0, is a
breakthrough success. Novell says that more than 200 of the world’s
500 largest companies use NDS.”

“To hear some analysts tell it, a new menace has arisen — from
the direction of Redmond, Wash. Microsoft’s (MSFT) new operating
system for networks, called Windows 2000, will include a so-called
Active Directory system that will compete with Novell’s Directory.
… ‘Windows 2000 is going to have a negative effect on Novell,’
says Morgan Stanley Dean Witter analyst Charles Phillips, who
nevertheless rates Novell’s stock as outperform.

A close look at the directory market, however, shows that
Windows 2000 might not be as potent a threat as some think. …
Novell’s genius was to make its Directory
platform-independent.
Thus it can oversee a network that
includes PCs running the Windows NT operating system, a NetWare
printer network, and an E-mail system that runs on Unix servers —
all at once. By contrast, the Active Directory in Windows 2000
will only interact with other Microsoft products. …for large
corporations, it represents an infrastructure nightmare.”

“Unlike other software companies — such as Oracle (ORCL) —
that have failed in trying to develop their own consulting
businesses, Novell is teaming up with established consulting firms
to train companies to use NDS and related products. Its revenues
from consulting are running 40% ahead of a year ago.”


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