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Novell unveils NetWare upgrade

The company takes the wraps off an upgrade to its NetWare operating system, ushering in a new Web-friendly era at the firm.

SAN FRANCISCO--Novell's chief Eric Schmidt hailed the arrival of an upgrade to the company's NetWare operating system today, stressing its evolution to a Web-friendly package as evidence that the formerly struggling network software provider will be a player on the Net.

NetWare 5.0 is the first version of the software to include native support for the dominant transmission protocol of the Net--the Internet protocol (IP). Its release represents the first substantial product introduction by the firm since the arrival of Schmidt, chairman and chief executive officer.

The former Java programming language guru for Sun Microsystems has professed his highest priority at the firm upon taking the top post early last year was to make Novell's software more "open" through adoption of the widely used protocols of the Net.

In an interview with CNET News.com, Schmidt said Novell can now focus on the future, with support for the Net in place.

"We had to remove the dissatisfiers--we had to be pure [for the Net]," he said. "Now we can focus on why we are better."

Novell, which boasts a huge installed base of more than 4 million NetWare servers, according to market researchers, has felt encroachment in recent years from Windows NT Server, Microsoft's operating system for corporations. After a period of fiscal and managerial uncertainty at the Provo, Utah-based firm, Novell has returned to profitability and seen an appreciation in revenue for its two most recent quarters, two signs that Schmidt's leadership may be working.

"The general purpose operating system market is down to various flavors of Unix and NT," Schmidt noted. "We don't want to play in that space."

Added Jean Bozman, analyst with market researcher International Data Corporation: "They see themselves as being colocated with these NT servers. They're trying to find ways they can do things that Microsoft doesn't. It's a clever approach."

Novell's introduction today also stands in stark contrast to the continuing efforts at Microsoft to complete work on Windows NT 5.0, an important upgrade for the software giant that will likely drive profits at the Redmond, Washington-based firm for some time. Microsoft president Steve Ballmer said final release of the operating system is likely "eight months to 12 months" away last week, though some predict final shipment of the software could stretch into the year 2000.

"I think they have a real chance to grow revenue now, not just due to what they've done on their own, but what Microsoft hasn't done," said Bob Sakakeeny, group vice president at technology analyst firm the Aberdeen Group.

Though Novell offered a revised roadmap for NetWare 5.0 once Schmidt came on board, the firm has remained on time through much of the process, even beating a ship date deadline announced last month. NetWare 5.0 started shipping to customers last week.

Novell executives have taken great pains to promote their own software without framing the issue as a Windows NT or NetWare decision, noting the network-optimized capabilities of their own offering. The company has also chosen to offer its own technology for NT--specifically its directory services software--so that the two operating systems can co-exist. Novell also hopes that, given the delays in delivery of the 5.0 upgrade, customers may choose to go with the company's own services in the meantime.

"Everyone of our customers is a Microsoft customer," Schmidt said. "Our focus is to interoperate."

For customers, delivery of NetWare 5.0 may mean increased investments in Novell's software, even in the face of broader use of NT. Jeff Daly, vice president for information systems at InterVoice, a call automation software provider, said his company will to add to its NetWare server network--which works alongside NT and Unix machines--due to its growing need to implement a directory service, a core component of Novell's bid to recapture lost ground.

"They've done what they said they were going to do," Daly said. "NT still has some issues."

Another user, D.J. Edwards, information systems manager for the Benetton Formula 1 Racing Team, said the advent of NetWare 5.0 will help her organization plan. "I don't think it will change our investments, but it does give us a clearer picture of where we are going," she said.

The Benetton racing team network includes Novell, NT, and Unix-based systems.

In light of the delivery of a Net-ready version of NetWare, Schmidt has satisfied a primary goal he set at the outset of his tenure at Novell. The Silicon Valley veteran told CNET News.com that his trial-by-fire as a new chief executive was not without its struggles, given the tenuous position the company was in upon his arrival early last year.

"Things are actually going better than I expected," Schmidt said. "Things were going worse for a while. I'm a lot more optimistic now than I would have expected."

Schmidt was referring to a summer quarter last year in which Novell stopped shipping product to resellers in order to flush out its sales channels and get a better grip on revenue expectations.

Third parties, such as PC and server giant Compaq Computer and chip behemoth Intel, were among those hailing arrival of the NetWare upgrade Monday. Lee Johns, director of software marketing for Compaq's server products division, said he expects an "uptake" in sales of systems, given the buzz surrounding delivery of the upgrade.

Each copy of Netware 5.0 will also ship with a Web server from Netscape Communications and a version of the Oracle8 database from Oracle.