NetWare everywhere: Promise or pipe dream? - Novell's plan to challenge Microsoft - Cover Story

Software Magazine, June, 1995 by Elizabeth Harding

Robert Frankenberg claims a billion people will be using computer networks by the year 2000. If he has his way, most of them mill be using NetWare.

Though soft-spoken, Frankenberg, chairman, president and chief executive officer of Novell, is aggressively promoting a strategy he calls "pervasive computing."

"We'll expand NetWare to go everywhere," said Frankenberg at Brainshare '95, Novell's developer conference held recently in Salt Lake City. "We'll budd on NetWare's strength. We have two-and-a-half million NetWare servers installed and 40 million users."

What Frankenberg did not say is that Provo, Utah-based Novell has a difficult road ahead. The company's strategy makes it directly competitive with Microsoft Corp., Redmond, Wash., in the operating system world. Many NetWare capabilities have already been incorporated in Windows NT and will be shipped with Windows 95 by the end of this year.

In the market for application suites, Novell has yet to give Microsoft Office much competition. However, Lotus Development Corp., Cambridge, Mass., another key Novell competitor, said strong competition from Novell's WordPerfect Office suite contributed to its 18% sales decline in QI/95.

Analysts are split on Novell's chances against Microsoft. Most agree Microsoft will make some inroads in the network operating system arena once NT and Windows 95 LAN Manager products become widely available. At the moment, though, Novell holds the lion's share of the NOS market. International Data Corp. (IDC), Framingham, Mass., found that Novell garnered 66% of that market in 1994. "It doesn't look like Microsoft has made significant inroads into Novell's market share," said lan Campbell, IDC research director. "Microsoft's total market share is 9%, up from 8% in 1993. Banyan has 6% and IBM has 8%."

"We asked current NetWare users whether they'll go to 4.1 or NT servers, and it looks like a lot of NetWare shops are opting for 4.1," said Mike Rothman, program director in the Network Systems Division of Meta Group, Stamford, Conn. Rothman, however, criticized Novell's decision to acquire a Unix offering with Unix Systems Laboratories in 1992: "Buying Unix System Labs diluted the work they've done on NetWare."

The NDS Factor

Novell credits improving sales of NetWare 4.1 as a key reason for a 19% sales increase in its NetWare Systems Group for QI/95. According to Frankenberg, sales of Version 4.1 accounted for 30% of total NetWare revenue for the quarter ended December 31. Revenue for fiscal 1994, ended October 29, reached nearly $2 billion, up from $1.8 billion in 1993.

NetWare 4.1 is meeting the needs of departments and workgroups at Kaufhof Holding AG, an $11-billion German retail giant and longtime NetWare user. Kaufhof decided not to implement an enterprise-wide NOS using NetWare V.4.0 or 4.02. "We think you can't use NetWare 4.0 or 4.02 in large environments," said Ernst Lueckerath, manager of PC LANs. "But 4.1 looks very reliable and has good performance" and may boost Novell into the enterprise. Kaufhof mill take advantage of the new Netware Directory Services (NDS) and the multiprotocol routing capabilities in NetWare 4.1.

Richard King, executive vice president and general manager of Novell's NetWare Systems Group, claims NetWare 4.1 can meet the enterprise-wide needs of large firms. "We introduced the capability to distribute services across the network [in V.4.1]," said King. The 10-year Novell veteran said NDS services provide access to an entire network through a single log in; earlier NetWare versions required users to log in to individual servers. GUI utilities let end users and administrators access network resources with drag-and-drop operations.

In addition, NDS incorporates a distributed database that can be replicated and partitioned, said King. "NDS provides a replicated global directory for registering all objects within a network. It includes robust security and authentication services. NDS was architected to extend the schema and create relationships with any object."

Greg Gabet, information security, manager at Lincoln National Insurance, Ft. Wayne, Ind., describes NetWare 4.1 as a more in the right direction. "Novell has made major improvements in the NetWare 4.1 authentication scheme," he said. "We'll be able to extend the NDS schema for the company-relevant information and then snap in tools to manage that information."

Currently, Lincoln National programmers have to write code for snap-in tools, Gabet said. The company is still waiting for Novell to provide a standard utility for extending the schema, he added.

Kings says NDS is very scalable: "When it was first released leased with NetWare 4.0, it lacked some capabilities. With 4.1, NDS is rock-solid and scalable. You can build an enterprise network with NDS."

Starting Small

Observers say Novell's early concentration on small networks helped it take a quick lead in the LAN market. Banyan Systems Inc., Westborough, Mass., which built its Vines network as an enterprise system from the beginning, found most users in the late '80s and early '90s were content with the less robust NetWare Today, many say Novell's share of the LAN market makes NetWare the de facto standard in that arena.