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Novell plans NetWare 5.0 release

The network software firm finalizes plans for the release of one of the most anticipated operating system updates in its history.

Network software provider Novell finalized plans today for the release of one of the most anticipated operating system updates in the company's history.

With NetWare 5.0, expected to be delivered to customers by September 20, the company may never have a better opportunity to gain ground on rival Microsoft, which is struggling with its own complex OS--Windows NT 5.0.

NetWare 5.0 is the first to natively support the common protocol of the Net, IP (Internet protocol), and continues Novell's push to tailor its products for the Net age.

Novell executives have sent a message to the industry that comparisons between NetWare and Microsoft's Windows NT operating system for corporations are not applicable, even though NT continues to gain market share rapidly against software like NetWare.

The Utah-based company has a significant opening to ply its software upgrade due to ongoing delays in the delivery of Windows NT and industry recommendations that wide implementations of the NT 5.0 upgrade should be put on hold until 2001.

The new release, the first update since chairman and chief executive Eric Schmidt took the helm at Novell, will be priced at $1,195 for a server with a five-user license.

Delivery of NetWare 5.0 continues a company evolution that started once Schmidt, the former Java programming language guru at Sun Microsystems, took over. The company has offered a sustained fiscal recovery to the market that could be extended with strong sales of the NetWare upgrade.

But analysts note that Novell is facing strong opposition on several fronts, most noticeably in the manner in which information technology departments are deploying software.

Most managers are moving toward consolidating software functions on fewer server machines, a trend that flies in the face of the distributed server model that Novell is accustomed to, according to Dan Kusnetzky, program director for operating environments and serverware at market researcher International Data Corporation.

"Novell is under a serious amount of market pressure because the market is changing," Kusnetzky noted.

The company is banking on its expertise in administration software as a key differentiator. Its Novell Directory Services (NDS) remains ahead of technologies found in NT, though Microsoft continues to hone a next-generation Active Directory for delivery within the next NT upgrade, now likely due in late 1999.

The company is also promoting the Java programming language as a method to easily build applications on top of the NetWare operating system, something that has been difficult for Novell developers in the past. Yet Java-based applications on the server are few and far between so far, although the market continues to be hyped by several prominent software companies.

These elements lead some to believe that NetWare 5.0's technology is premature, given the realities of the market. "I think they've built the right software--now the market has to catch up with them," said Kusnetzky. "That isn't a good position to be in if you're trying to sell software now."

Novell continues to feel encroachment from NT, even though Novell executives depict NT as a general-purpose application server while NetWare offers a specialized system for the so-called networking era. Total unit sales of operating systems for 1997 were 3.5 million, according IDC research. Of that, NT garnered 36 percent of sales, while NetWare grabbed a 26.4 percent share.

But Novell believes it can craft a lucrative niche by coexisting with NT and various flavors of Unix and managing those types of software systems better. "We don't think they're comparable," stressed John Slitz, senior vice president of marketing at Novell. "When something is very important to you, you go to a specialist."

Slitz said most Java development on the server is being undertaken within corporations, out of the view of the commercial market.

The executive said that NetWare's optimized focus--which has resulted in some of the fastest benchmarks for Java execution and Web serving--is something Microsoft aspires to but will find hard, given the 35 million lines of code incorporated into the next release of NT. "They see the opportunity but they don't know how to get there," Slitz added.

Novell executives said an anticipated release of its NDS software that runs on the NT operating system will roll out by the end of this year.

To boost the functions found in NetWare, Novell will bundle a five-user implementation of version 8.0 of Oracle's flagship database software as well as Netscape Communications' FastTrack Web server software.

Novell's stock barely budged on Wall Street on news of delivery of the upgrade.

Separately, Novell announced that an update for potential year 2000 problems within version 4.1 of NetWare will be released to customers in the fourth quarter of this year.