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Novell's brave new world.

In his seven months as president, Joe Marengi has refocused the company on its core networking business, and on getting new products to the market.

Novell, the market leader in network operating systems with a 60% share of the worldwide market, went through a management shakeup last fall. In recent years, the company had lost its reputation as a market innovator, and its focus as a networking company. Under Joe Marengi, its new president, Novell has begun to reassert its dominance, and to sharpen its focus.

In an interview with Communications News, Marengi outlined the marketing and technology strategy that Novell is now pursuing, dismissed the much-touted battle between NetWare and Microsoft NT, and laid out the company's plan to make Novell Directory Services the directory for the Internet.

When Marengi was named president, Novell's lack of focus had reached a critical stage. "Novell was in the mode of aim, aim, aim, aim. We never pulled the trigger," Marengi says. There was a terror of putting out a beta product that might have a bug in it; products would be announced and never appear. Strategies would be announced and never followed.

Marengi himself is lean, intense, and focused--and that is what he wants a rebuilt Novell to be. "In my opinion, we had so many starts and stops that the company became known for `the strategy du jour'," Marengi says.

One result was that Novell left itself vulnerable to charges of not being viable, of being ripe for a takeover, especially after its abortive venture into the applications market with its purchase of WordPerfect.

"That truly couldn't be further from the truth," Marengi says. "People have a tendency to forget that we are still the fourth largest software company in the world, and we have over a billion dollars in cash. The bottom line is people have written us off significantly prematurely."

His job was "to get the company consolidated," he says. "Novell had a history of being disparate groups inside the company. We need to get a single face to the customer from the marketing side, and our marketing needs to get much more cohesive. We need to get the product plans moving in a clear direction."

Novell's flagship product, NetWare, metamorphosed into IntranetWare last fall. IntranetWare combines NetWare 4.11 with an IPX/IP gateway for Internet access, multiprotocol routing, FTP (file transfer protocol) support for downloading Internet files, Web authoring tools, NetWare Web Server 2.5, and Netscape's Navigator Web browser. It signaled Novell's intent to become an operating system across the enterprise and the Internet.

The heart of Novell's strategy is Novell Directory Services, a part of NetWare 4 that made administration of a network of many servers in many locations easier. NDS makes everything on the network--servers, printers, users, programs, directories, etc.--into objects that have properties and can be related to all the other objects.

Novell's vice president and general manager of the Internet Infrastructure Division, Tom Arthur, says the company considers the directory to be the most basic function in computing. It is a database of all the objects in a network, it manages all the relationships among the objects, it authenticates people within a network rather than to a particular server, and it controls access to the network.

With all these functions at the directory level, access and verification for all applications and services can be controlled from the directory. No other program needs its own access control.

With Novell's multiple directions, Marengi says, "The directory got buried as a piece of NetWare. People would say, `Hey you've got this incredible piece of technology.' We've known it for the last couple of years, we know what we've got to do with it, but it never went anywhere because it wasn't a focus."

Now, it is, because "the world can't exist without a good directory; I mean it just flat out can't exist. The whole network paradigm that everybody keeps talking about is useless without a good directory."

There's no doubt that Novell is years ahead of any competition in the cross-platform directory business. In a series of licensing deals, Novell has arranged to write NDS for Unix (it is already available for SCO Unix, and will be soon for Sun and HP UX). It has licensed Java from Sun. Microsoft is writing its own directory, but it won't be available until late this year, and Novell is going ahead with a binary version of NDS for NT.

The NDS focus, in Marengi's view, makes the argument about whether to use NetWare or NT as the network OS old news. "I've got to get people to stop thinking about NetWare vs. NT because that's a legacy argument."

Marengi is much more excited about bypassing the whole argument over applications server vs. file and print server. From now on, NetWare and its successor, IntranetWare, will be a development platform for Java applications. In other words, NT as an applications server will be beside the point.

"We think that Java has a very large place in changing the way that people use applications on a network," Marengi says. "We see IntranetWare becoming a major platform in the application development world. People who made decisions to go with NT to run their networking infrastructure have now backtracked on that decision and decided that the IntranetWare platform is the right place to be for running your network."

Most PC networks run on NetWare, most intranet servers run on Sun software, and Java has thousands of developers. It should be a powerful combination and a major step towards Novell's goal of being the directory for the Internet.

Novell's shift in branding from NetWare to IntranetWare shows its support for open standards. "Open standards are not something that is new to Novell; it's just all of a sudden we are telling the world that we actually are developing open standards," Marengi says.

Marengi says Novell will be focusing on two other products: ManageWise and GroupWise. "There's a Gartner Group study that says 2% of the network cost is in the administration, 3% is in the software, 25% is in the hardware, and the rest is in maintaining and upgrading." The directory and ManageWise are intended to reduce those costs substantially, possibly by more than one-third.

GroupWise, says Marengi with a laugh, "is the one thing we got from WordPerfect--the one and only thing--that's really significant, other than our investment in Corel now."

GroupWise sometimes gets tagged as glorified e-mail, but Marengi is quick to list how much more it can do: "Call it g-mail, not e-mail. It puts your group's schedules and calendars together, remembers your scheduling tasks, does document management. You can access your voice mail, your e-mail, your paging, your faxes through the universal inbox."

What excites Marengi most, though, is the prospect of NDS, and what it will do for worldwide communications and electronic commerce.

"If you move into the future, it will be Novell the directory company," he says. "We're building server operating systems with a major push for Java applications. We have a tremendous platform to move forward just because of what NetWare is everybody says it is an incredibly fast operating system, and that makes it efficient for running something like Java."

Novell will be putting a great deal of effort into the security aspects of its directory service, which puts it up against the government's stance on encryption, which is not to allow export of software with strong encryption schemes that security agencies cannot get past. "The world of electronic commerce changes the way the entire globe does business," Marengi says.

The government doesn't like not having control points. That's completely contrary to the way the computer industry views what we're doing."

As the head of the company that defined networking for PC systems, Marengi believes that networking has changed again. No longer is it restricted to IS departments. In a perhaps unconscious reflection of Sun Microsystems' slogan "The network is the computer," Marengi says: "Networking is the business. Where before networking was a piece of the is infrastructure and that's all, networking is the business now.

"When you want to do a direct mail piece, you don't do a direct mail piece anymore; it's one-to-one marketing across the Internet or across the virtual private network or into the business-to-business networks, but it becomes the business. It is no longer just a piece of it."

As the network's role changes, so does the role of the network manager: "Network managers become much more important because someone has to maintain and administer the network. They are the keepers of open commerce for the company."

Marengi is pleased by the refocusing of Novell, and its strengths as it moves towards its worldwide directory: "We're not looking at the past, we're looking at the future. We're saying, `If you had to be in the networking business, starting brand new today, and you had a billion-dollar war chest to work with, you had 70 million customers around the globe, and you had an infrastructure second to none around the globe, is it a good place to start?' Not bad."


Joe Marengi was appointed president of Novell in August 1996. He has degrees in public administration and management, and served as a lieutenant commander in the U.S. Coast Guard. He has held sales positions at Excelan, Kinetics, Stanley Works, and Westinghouse Electric. When Novell acquired Excelan, Marengi served first as vice president of channel sales, and then as executive vice president for worldwide sales.
COPYRIGHT 1997 Nelson Publishing
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1997 Gale, Cengage Learning. All rights reserved.

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Title Annotation:Company Business and Marketing
Author:Hotch, Ripley
Publication:Communications News
Article Type:Cover Story
Date:Feb 1, 1997
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