LAN Times
January 6, 1997
LAN TIMES: How close is Novell to naming a CEO?
JOE MARENGI: No closer than we were when we talked about it in September. We gave a time frame of four to six months, and we're still holding to that. Selecting a CEO must be done carefully because [the position] has long-term tenure associated with it.
LT: Why do you think you're exactly the right person?
MARENGI: I'm not saying I'm exactly the right person. That's up to the board of directors. They've included me in the process because as president and chief operating officer, I will work closely with the new person. If the board chooses me, then I'll keep doing what I'm doing. If not, then my role will shift a little, but there's still a lot of work to be done in the company. My goal is not to become CEO; my goal is to make Novell successful.
LT: If you do become CEO, how will your strategy differ from [former CEO] Bob Frankenberg's?
MARENGI: This is my strategy now, the way it has been under me for the last three months: Move forward heavily with NDS [Novell Directory Services], continue the move toward open standards for the Internet, and continue a major push behind GroupWise. This is a new company now--the way it feels inside, the morale, the urgency, everything.
LT: Can you be more specific as to what's characterizing your tenure?
MARENGI: We're doing stuff. Instead of talking about it, we're doing it. That's the biggest difference. We've been talking about a directory strategy for how many years? Now we've launched a directory strategy, which we think makes a tremendous amount of sense, and we've lined up the partnerships to make it effective.
LT: When you became president, you said you didn't feel that Novell should be viewed as being in a head-to-head battle with Microsoft [Corp.]. With IntranetWare being positioned as an applications/Internet server, how do you see Novell not competing with Microsoft?
MARENGI: Obviously we're going to compete. If you're in the software business, you're going to compete with Microsoft. There will be circumstances when we will compete with Microsoft for an account, but more often than not, accounts will say "I'm going to be deploying NT, IntranetWare, and Unix in the same environment," which is where our whole cross-platform directory strategy comes in.
LT: Novell is no longer conceding the application market to Microsoft?
MARENGI: We never conceded anything. What I concede to them is the [business-productivity] suite; they can have it. I concede to them games. I concede to them the content business. Da Vinci and encyclopedias: They can have that. But the network space is going to be shared by more than one vendor, and we will hold our share of the network space. It's ridiculous to think there's only one vendor in the world who can fill all needs.
LT: So you're saying customers aren't choosing between Novell and Microsoft?
MARENGI: Customers are doing everything. Some customers are getting rid of NetWare and going to NT. Some have made that decision and found that it's a complete disaster, and they're coming back. Others are deploying NT the way they've been deploying Unix for years--as an application server. Small businesses are staying with us, and small businesses are moving to Microsoft. We're getting new customers, they're getting new customers. They're getting new customers at a faster pace than we are. This is something we need to contend with.
LT: Why do you think Microsoft has been gaining new customers at a faster rate than Novell?
MARENGI: There's a multitude of reasons, but one is that they've got a great ISV [independent software vendor] community that works with them. Their developer connection is really where I think their strength comes from, plus their marketing machine is phenomenal. Also, they came at the market completely opposite--as an application server that provides rudimentary file and print. Novell provides an unbelievable network infrastructure that does applications.
LT: But is [Microsoft's success] that sudden? NDS has been around for quite a while.
MARENGI: NDS has only been available on [NetWare]. That's a very fundamental change because if I have these different servers--Unix, NT, and IntranetWare--how do I synchronize and replicate data between the servers today? I don't. With a directory deployed across all of these different platforms, I can now synchronize and replicate everything I have across the different servers on the network.
LT: What you're talking about is a metadirectory.
MARENGI: That's the word; that's the perfect word.
LT: Is that a goal for NDS?
MARENGI: Having the de facto directory in the industry is [the goal]. NDS is an industry directory, the way we're doing it; it's not Novell's directory.
LT: It's a network directory.
MARENGI: It's a directory service. There's a difference between a directory service and a directory. Excite is a directory. Yahoo is a directory. The key here is a technology we call federated partitions, which allows me as the customer to be in the directory yet be in several systems, all separate and always synchronized. So if I move, if I change my telephone number, everything is replicated. It's a major technology. The problem is making people understand what a directory does for you. People think of directories and they think of the Yellow Pages.
LT: I would imagine it's also hard to educate developers on leveraging the directory. It's a problem Novell has had with NDS for years, isn't it?
MARENGI: Right. Different problem. There are 200-plus applications that leverage NDS--network applications and services, backup and archiving systems, and CD-ROM systems. A lot of general-purpose applications have their own directory.
New applications, though, are being developed that want to write to NT, Unix, and IntranetWare. It's easier [for application developers] to use a directory that's already cross-platform--that people are already deploying--than it is to build your own directory.
LT: Who else do you see competing in this metadirectory space?
MARENGI: Nobody. There are little companies now, such as Zoomit [Corp.], that produce gateways between directories. That's OK. What we want them to do is build gateways that work with NDS.
LT: What about Banyan?
MARENGI: I don't know the answer to Banyan. Banyan does not have the ubiquity that's required to make a directory such as this one successful. Ubiquity is what this is all about.
LT: What about in the area of Internet servers? How do you expect to raise market share in that arena given the head start your competitors have?
MARENGI: Well, Sun [Microsystems Inc.] is actually the biggest [competitor], not Microsoft. Microsoft is wonderful. There's tremendous marketing and intelligence in that company. By giving away their [World Wide] Web server with every copy of NT, do you really think that everyone who buys NT is using their Web server? The answer to that is no, but their marketing hype says the answer is yes. When people buy a Sun box, they're buying a Sun Web server to use as a Web server.
LT: Aside from Microsoft, though, you have Netscape [Communications Corp.] to deal with.
MARENGI: Yes, that's valid. Netscape sold $25 million in server products last quarter. We just sold $284 million worth of server products this quarter. We do have them to contend with. The issue is that we have an installed base with IntranetWare that we've now given an evolutionary path toward the Internet. It's there. You don't have to retrain your people; it's not a different system. But it's up to us to gain new customers with our product. There's no question that we're behind in mind share.
LT: What are you doing to bolster customer confidence in NetWare products and delivery promises?
MARENGI: In the old regime, we were promising a lot without investing the right amount to make those things come to fruition. Microsoft is worse than we are in making promises and delivering two years later, but that's not the issue. Right now we're funding the efforts we're talking about.
LT: What specific goals does Novell have for 1997?
MARENGI: To return Novell to a leadership position. To stop people from saying Novell is a legacy company. Returning the company to a position of strength rather than a position of weakness. I am not a passive person, and this company will not be a passive company.
Interviewed by Associate Editor Brett Mendel and News Editor Claudia Graziano.
Copyright 1997