NT Destroyed Novell From The Very Beginning

ntdnllA recent story in a business magazine raved about a young, hotshot money manager. One example of The Kid’s savvy: He’s shorting Novell stock.

Why? Because the wunderkind is afraid of what Microsoft is about to do to Novell.

It was jarring to see it put that bluntly. But the notion wasn’t so different from what I’ve heard from other money managers and analysts, and from a number of the seers and gurus in the computer press, as well.

Let’s not go overboard here. Novell’s 60 percent-plus share of the network operating system market is a solid base. With the acquisition of Unix System Laboratories, the strengthening of Novell’s peer-to-peer NetWare Lite version 2.0, NetWare 4.0 coming soon and DR DOS in the closet as a strategic weapon, Novell isn’t going away.

But Novell’s never been tested the way Microsoft is about to test it with the Windows NT juggernaut and maybe even — if Redmond can get it back on track — with Windows for Workgroups.

In any case, it’s inevitable that with a serious alternative to NetWare available, Novell’s going to lose market share and, given Microsoft’s NT pricing, an even larger chunk of revenue.

It isn’t time to dump those Novell shares you bought to put Junior through college. But a little re-evaluation never hurt.

A bundle of incentives

Consider Microsoft’s plans for pricing NT, and for stroking the channels that sell and install LANs. At the company’s Inside Track event for VARs in Seattle last month, it floated trial balloons about a bundle of Windows NT, LAN Manager for Windows, the Macintosh services package and the Remote Access extensions — all for $1,000.

It’s even better than it sounds, because that package, loaded on a server, will let you connect as many DOS and Windows clients to the server as you wish, given performance constraints.

Compare that with NetWare, where you’d spend thousands of dollars more for a license for the same string of DOS and Windows clients connected to that server running NetWare.

What, exactly, are those “performance constraints”? Aha — you found the key: We don’t know.

If NT and LAN Man are slugs, with creepy performance, prices won’t matter; NetWare will remain king of the hill. If not …

Microsoft is facing a triple-whammy here.

First, it has to overcome its terrible reputation, arising from many network managers’ unhappy memories of LAN Manager’s miserable performance.

Second, NT plus LAN Man must absolutely fly. Performance has to meet and beat Novell right out of the gate. The usual Microsoft “We’ll get it right in the next release” excuses and protests won’t help here: It’s gotta be right the first time.

And third, Microsoft has to go up against a whole industry that has arisen and prospered by knowing how to get NetWare up and running — and keeping it running — day in, day out.

Clearly, Microsoft is tackling the “bad memories” problem with that killer $1,000 price. That tag is going to hook a lot of us into signing a P.O., putting the package up on a server and running some serious tests.

I hope Microsoft is solving the second problem behind the scenes now, before NT and LAN Man for NT ship. If the results of those tests by “early triers” — as opposed to early adopters — aren’t good, network managers will have wasted a lot of precious time … and Windows NT won’t have anything like the impact Microsoft is forecasting.

Finally, Microsoft is tackling the knowledge problem with its “train the trainer” road show, which began this month. By taking NT/LAN Man training out into the field and asking everyone who attends the short course to train at least 50 others, Microsoft is creating a base of people who have at least a good start on installing and bringing up NT networks.

No matter how good Windows NT and LAN Man are, Novell is still going to be a huge force, with a commanding lead in the number of installed servers and nodes. But no longer, I suspect, a majority of them.

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