Imagine software that gives users a single view into a seamless network, wherever they are and wherever their browsers take them. It's enabled by a directory, which becomes a sort of über operating system. But users don't care about operating systems anymore, or directories either, all they care about is finding answers to their business problems.
A bold vision, indeed, but Novell Inc. is betting the company on it.
Novell introduced its NetWare operating system in 1983. By the early 1990s, it had nearly 70 per cent of the network operating system market. But since then, pounded by competition from Windows, Unix and Linux, Novell's sales and market share have shrunk.
Now Novell is responding on three broad fronts. First, it has shifted development and marketing efforts from NetWare to products for collaboration, security, directory services and network management that have higher growth potential, particularly for e-business.
Second, Novell hopes to evolve from a company that sells products to midlevel technical people to one that offers packages of products and consulting services to senior IT and business managers. That effort got a big boost in July when Novell bought Cambridge Technology Partners Inc. and in one fell swoop boosted its consulting staff from 350 to almost 3,000.
Finally, Novell has adopted a strategy of "if you can't lick 'em, sidestep 'em" to head off the threat from Microsoft Corp. The vendor is evolving its products to open standards, such as XML, and to independence from its flagship network operating system product, NetWare. Novell claims that its One Net strategy, built on its NDS eDirectory product, will give users a single view and point of access to resources, whether they're on public or private networks, intranets, extranets or the Internet.
Despite users' praise for these changes, Novell continues to lose market share. As Windows application servers began to creep in, many organizations decided to standardize on Microsoft's network operating system. Now Windows 2000's Active Directory, tightly integrated with Windows and other Microsoft applications, is commoditizing directory services another area in which Novell has excelled.
Novell's Big Bet
NetWare 6, introduced last month, illustrates Novell's new direction. It supports eDirectory, Novell's directory system, and it adds end-user services such as iPrint, which lets end users with Web browsers find and use printers, and iFolder, which lets them access and synchronize files stored on file servers running a range of operating systems.
"We used to appeal to the technical people," says Jim Tanner, Novell's director of NetWare product management. "With 6, it now becomes a set of services."
NetWare 6 also eliminates the requirement for historically trouble-prone NetWare client software, relying instead on the Windows network client. And it makes upgrades easier, Tanner says. "A NetWare service can be made available to any user without the administrator having to touch the client," he says. "For example, you could deploy a single NetWare 6 server and then broadcast iPrint to 10,000 users."
What's more important is that Novell's products from ZENworks to GroupWise are being decoupled from NetWare. They now only require eDirectory, which runs on a variety of network operating systems, from NT to Solaris. Novell is betting that by tying its own applications to eDirectory and then providing connections to other directories through its DirXML metadirectory service, users will embrace it as the glue that connects all applications and directories, both inside and outside the enterprise.
Right Direction
Current Novell users and analysts generally applaud these developments. Aidan Garcia, a network services manager at Eastern Bank in Lynn, Mass., says, "We've liked what we've seen from Novell, even for integrating our Microsoft servers into our Novell Directory Services environment. Our external authentication is all done through Novell. So there's one set of user accounts for everyone, not one for Unix, one for NT, one for the virtual private network and one for the Web."
Novell also has a distinct quality advantage over Microsoft, says Dan Kusnetzky, an analyst at International Data Corp. in Framingham, Mass. "Microsoft is facing problems of scalability, security and management that Novell solved years ago. And Novell has better directory services, better management tools and better user-provisioning tools," he says.
And Novell has picked the right strategy to move it beyond the realm of legacy operating systems, Kusnetzky says. "A lot of big organizations are beginning to see Novell as the glue that will link Windows clients to Windows servers and to servers like Solaris," he explains.
Rockford Corp. in Tempe, Ariz., has a mixture of NetWare, Windows and Unix servers and relies on eDirectory and ZENworks to tie it all together. The manufacturing company is extending the One Net concept beyond its walls. "Dealers want information from our LAN, so if I can give them from a single point of administration access to NT servers, Oracle [Unix] resources or whatever, we have the ability to get them in here with one user name and password," says Chris Duffy, communications manager at Rockford. "Internet, extranets, intranet all stitched together. That's our vision."
The 90-per-cent Solution
Despite the praise for Novell's direction, many users are still quietly defecting to Microsoft. According to a recent survey by Stamford, Conn.-based Gartner Inc., 36 per cent of NetWare users said they were converting or had converted their NetWare servers to Windows 2000 or NT.
The Andersons Inc., a US$1 billion agricultural products company in Maumee, Ohio, has been a satisfied NetWare user since 1988 but is nevertheless migrating to Windows NT. IT architect Judy Zilka says the company loves the reliability and scalability of Novell products and was initially skeptical of NT. But then it brought NT servers to host NT applications, including Lotus Notes.
"The NT servers were good, and they were reliable," Zilka says. So she plans to simplify the infrastructure by phasing out NetWare, even though she considers it technically superior to NT in many ways. "It's the Microsoft momentum," Zilka explains. "It's Microsoft dollars, their R&D, their marketing machine. If it works and it's reliable and you get 90 per cent, maybe 90 per cent is OK."
Should Microsoft's momentum worry Novell users? "I'd be comfortable if I were a Novell customer," says Gartner analyst Neil McDonald. "Novell is not going away. And as for these migrations from NetWare to Windows, it's very difficult to find the cost justification or the technological justification."
But persuading new users to bring in eDirectory, the platform on which all Novell applications are now based, could be difficult, says Rick Villars, an analyst at IDC. "If you think of eDirectory as an operating system, it's a challenge. If someone is committed to Active Directory, then they are going to think of this as an [operating system migration]," he says.
"So the key for Novell is to make the decision on eDirectory to be more like the decision companies make on databases, where they are looking for a solution to a business problem," Villars continues. "That could be a better way to integrate the human resource systems from merged companies, a better way to manage information you are providing partners through a portal, or a better way to integrate security controls for different ERP applications." That, he says, is the approach Novell is now taking.
The Technology Behind One Net
Novell has many products that fit into its One Net strategy. Here are a few of the core elements:
NetWare 6: The new version does away with the NetWare client and introduces iPrint and iFolder, which are browser-based services that help users find and use printers and access documents regardless of their location.
NDS eDirectory: Novell Directory Services, relaunched as eDirectory two years ago, moves the company's 8-year-old directory service to network operating system independence, with native support for Windows 2000, NT, Solaris, Linux and NetWare. EDirectory has become the base on which all other Novell products rest.
DirXML: Introduced last year, Novell's XML-based data sharing and synchronization metadirectory service continuously updates user profiles and other information between eDirectory and other enterprise directories. Unless a target directory stores its data in XML, special "connector" interface software is required. So far, Novell offers connectors for Microsoft Exchange, Lotus Notes, PeopleSoft and SAP software.
GroupWise 6: Introduced in April, this version extends Novell's e-mail and collaboration product to support wireless devices and runs on any server running eDirectory.
ZENworks: Novell's popular desktop and server management tools, which leverage eDirectory, are being revamped. The next release of ZENworks for Servers will no longer require NetWare, and ZENworks for Desktops will eliminate the need for Novell client software.
iChain: Novell's user authentication and authorization software is designed to work with eDirectory and provide single sign-on.
Changing Fortunes
1979: Novell Data Systems launched as a maker of computers and disk operating systems.
1983: Company changes name to Novell, welcomes CEO Ray Noorda, introduces NetWare file server software.
1987: Novell acquires Santa Clara Systems, a maker of microcomputer workstations.
1989: Company acquires Excelan, a maker of networking software and equipment.
Early 1990s: NetWare's market share reaches nearly 70 per cent.
1993: Novell Directory Services (NDS) introduced.
1992: Buys AT&T's Unix operating system.
1994: Acquires WordPerfect and Borland's Quattro Pro spreadsheet software. Noorda retires and is succeeded by Hewlett-Packard executive Robert Frankenberg, who later sells WordPerfect to Corel at a loss of more than US$700 million. GroupWise is introduced.
1995: Sales peak at US$2 billion.
1996: Frankenberg leaves following flat sales and is replaced by John Young.
1997: Young departs; Eric Schmidt takes the helm, repositions Novell products for the Internet, lays off 1,000 workers (18 per cent of the workforce). Sales drop to US$1 billion.
1998: Novell shifts focus to directory services, introduces NetWare 5 and NDS designed for Internet and intranet applications, and ZENWorks.
1999: Novell decouples NDS from NetWare with its launch of NDS eDirectory.
2000: Novell introduces One Net vision and Net services software strategy, cuts workforce by 13 per cent, launches DirXML and iChain.
2001: Novell acquires Cambridge Technology Partners. Cambridge CEO Jack Messman becomes president and CEO of Novell; Schmidt remains chairman. Combined company aims to sell to senior management and emphasize e-commerce.