Novell claws back territory

Despite the ongoing onslaught by the Microsoft marketing machine, Novell's NetWare appears to be making up some ground against NT. A 20 per cent increase in sales for the second quarter was backed up by the news that BT is upgrading its investment in NetWare - albeit 4.11 - in the biggest ever Novell contract outside of the US.

Novell exceeded expectations for the three months ended 30 April and reported a net income of $38.7m (£24.2m) - double the $19.3m of a year ago. Sales were $315.6m, up from $262.2m. The results are continued evidence of a change in fortune for the company, which stalled in the mid-1990s after a poorly executed expansion.

"Novell is on its way to becoming a growth company again," said Eric Schmidt, Novell's chairman and CEO. "We had planned for growth, but the market's response to NetWare 5 has exceeded our plans. Novell has never had a stronger new product."

But Dean Bubley, chief analyst at Datamonitor, warned that although sales were up, they were only up in context of the company's recent poor performance.

"The revenues are not that huge compared to the likes of Microsoft," he said.

Bubley added that the boost in NetWare 5 sales may be due to existing customers choosing to upgrade - rather than risk a move over to NT so close to the millennium. He said that firms may also be moving to NetWare 5 while they adopt a wait-and-see policy towards Windows 2000 and Active Directory.

BT is investing around $5m in a deployment of Novell NetWare 4.11 and Novell Directory services to 70,000 seats nationwide. Chris McGarr, large system design manager for BT, said: "Two years ago we upgraded over half of our network to NetWare 4.11 and the results made the decision to upgrade the entire network an easy one. The single point of administration provided by NDS also makes a significant contribution in terms of the total cost of network ownership."