Analysts mixed on Schmidt's potential for Novell

Analyst reaction is mixed as to whether Novell's appointment of Eric Schmidt as chairman and CEO will put the company back on track. Schmidt, who resigned as chief technology officer of Sun Microsystems, fills the void left by the departure of Robert Frankenberg last August. He begins his new position in early April.

Analyst reaction is mixed as to whether Novell's appointment of Eric Schmidt as chairman and CEO will put the company back on track.

Schmidt, who resigned as chief technology officer of Sun Microsystems, fills the void left by the departure of Robert Frankenberg last August. He begins his new position in early April.

One analyst says he believes Schmidt will give Novell the direction that it has lacked in recent years, and bring the Java programming language into the heart of Novell's strategy.

"With the advent of Java, the industry has been looking to Java Beans and the Common Object Request Broker Architecture (CORBA) as a way to connect systems over a network," says Chris Le Tocq, software analyst with Dataquest Inc. in San Jose, California. "The ability to execute Java scripts on the server is very important to Novell."

For his part, Schmidt vows to remain a Java evangelist at his new company.

"Novell's a big Java maneuverer," Schmidt says. "They were the first Java system licensee."

Meanwhile, John Young, who has been acting chairman at Novell, will become vice chairman of the company. And Joe Marengi, who has been serving as acting president and CEO, will remain with the company in a position that has not been determined, Schmidt says.

"He's very important because he has the operating background in Novell that I don't have," Schmidt says.

But another analyst questions whether Novell really needs yet another technologist running the company.

"With Marengi they had somebody who could market their technology," says Stephen Auditore, president of Zona Research. "I have heard very few complaints about Novell technology. It's marketing and positioning that they have been lacking."

Both Le Tocq and Auditore question why Novell has lost market share in recent years, particularly given the firm's lauded technology and strong customer base and channel. More importantly, they wonder why the Internet has been a lost opportunity to the company.

"Novell's key strength has been that it has been very good at delivering files, quickly and efficiently over a network," Le Tocq says. "And what does Internet server software do? It delivers files quickly to the user over a network. So why has Novell not been a player in the last couple of years?"

However, industry watchers believe that with the appointment of Schmidt and Novell's commitment to Java, the company can look forward to closer associations with Sun Microsystems.

"Schmidt is a visionary," says Le Tocq. "And I don't know any company more in need of a vision."

Schmidt, who says his family will continue to live in California rather than move closer to Novell's headquarters in Orem, Utah, calls his new job "a dream opportunity."

Asked if he is leaving Sun because he felt he could go no higher, Schmidt says: "I love Sun. It would take this kind of opportunity to pull me away."

Wall Street was unimpressed by the announcement of Schmidt's hiring. Shares opened at 9 3/8 this morning and closed at 9 7/16, up 7/8 after the day's business.

Novell can be reached or on the World Wide Web at www.novell.com/.

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