How much longer can Novell count on user loyalty as its weapon of choice in the battle against Microsoft?
Perhaps not as long as Novell officials might hope. There is a growing body of anecdotal evidence which indicates that a good portion of Novell's 70 million or so users are hesitant about spending money on new Novell software.
For example, for the first time since NT debuted in 1993, new unit shipments of NT beat out new NetWare unit shipments in 1997, according to International Data (IDC). While IDC determined that the overall server operating system market grew by 10.8% from 1996 to 1997, Novell shipments declined by 9.4% in that same time frame.
``Novell is losing the tight grasp it used to have over its installed base,'' says Neil MacDonald, a research director with Gartner Group. He estimates that as many as 25% of Novell users are looking for a move toward NT. NOS sales will have a far-reaching effect on the success of most other Novell products because they depend on either NetWare or Novell Directory Services (NDS) to work, MacDonald says.
And in an informal survey of 50 ®MDUL¯Network World®MDNM¯ readers who also identified themselves as longtime Novell customers, one-third said they aren't buying as much Novell software as they've done in the past. Only half are looking to upgrade their servers to Novell's next generation of NetWare. And 28% said they won't be buying any more Novell products at all.
The survey data flies in the face of recent Wall Street predictions that Novell is turning the corner due to a streamlined workforce, two profitable quarters and a ramped-up product delivery schedule.
Users interviewed for the Network World survey don't deny Novell its fundamental strengths. In fact, many were intrigued by new Novell products like NDS for NT, BorderManager and the yet to be released ZENWorks, an NDS-enabled desktop management suite.
And Novell officials contend its network operating system shipments have already increased this year. Two-thirds of its 1998 first-quarter sales were new NetWare sales. However, officials could not say if they sold these servers into new or existing accounts.
Longtime Novell customer Hallmark Cards, Inc., in Kansas City, Mo., is not letting loyalty hold it back from looking at NT 5.0 as an upgrade path for its 60 NetWare 4.X servers. ``My responsibility is to be unbiased and look at the best product for the company regardless of the vendor,'' says Dan Blevins, a technical analyst with Hallmark.
Blevins doesn't consider NT 4.0 robust enough to replace NetWare's enterprise-level file, print and management duties. ``But NT 5.0, once Microsoft gets the kinks worked out of the directory service, could be something we go to in the future,'' Blevins said.
Hallmark is taking an even closer look at NT 5.0 because Microsoft is openly courting Hallmark's upper management. Microsoft flew three of Blevin's managers out to its Redmond, Wash., offices for high-level briefings.
``Without that song and dance, NetWare would have remained the choice for us,'' Blevins says.
One of New York's largest insurance brokerage firms also suffers from internal turmoil about a possible switch to NT. Chris Murphy, assistant vice president in charge of networking at J&H Marsh & McLennan, Inc., strongly favors upgrading the firm's 200 NetWare 3.X servers to either NetWare 4.X or 5.0.
But because J&H Marsh & McLennan's management sees Microsoft as a more financially stable company, it wants to make the switch to an all-NT infrastructure.
At Delta Beverage Group, a Pepsi-Cola and Miller beer distributor located in Memphis, Tenn., NT 4.0 application servers currently outnumber the NetWare 4.11 file servers eight to five. While MIS manager John Howell has no plans to get rid of the Novell boxes, he is looking for ways to manage all of the servers from one central point. He would like to use NDS for NT but is balking at the $70-per-user price tag.
``If Novell was really trying to keep my business and push NDS as a standard technology, they would give me NDS for NT for free,'' Howell said.
Users seem to be split on how Novell should handle NT encroaching on its space as the default network computing platform.
Some say play up the coexistence angle.
``Microsoft is not going away. So Novell should be concentrating on more integration tools like NDS for NT,'' says Howell.
But others favor a more vocal campaign against Microsoft.
``Why has Novell been so silent on the whole [Department of Justice]/Microsoft monopoly scuffle?'' says John Mazzella, IS manager with Commonwealth Scientific Corp. His company is currently looking at upgrading its 200-user NetWare 3.X servers to NetWare 5.0.
``They need to get in there and fight or they may be soon looking at Microsoft dominance on the server side,'' Mazzella said.