Novell resellers must invest in retraining or risk getting lost along the wayside as the vendor tries to reinvent itself. Only about 1,000 of its 30,000 European resellers are qualified to install intranets, the keystone of Novell?s turnaround strategy.
This was the stark message from Roland Richter, Novell?s recently installed VP for EMEA, when speaking to the vendor?s channel last month.
Novell is changing from a developer of general network management systems into a supplier of internet and intranet services. This means that the profile of its European resellers, once trained primarily to set up Netware systems, will have to change.
Richter said: ?Our resellers will need to be able to tie different platforms together and design an environment around central directories that allow for application launchers, and managed networks. There will be lots of training involved. The problem is whether the reseller will have the time.?
But he added that Novell?s reseller base will shrink because of the challenges, and because some will be unwilling to retrain.
Novell?s Certified Novell Engineer (CNE) accreditation will be redesigned, with additional modules. ?CNE programmes used to be training on Novell but now it?s training by Novell,? Richter pointed out, reiterating the vendor?s strategy of basing its products on platforms spanning NT, Unix and MVS, as well as its own Intranetware ? previously known as Netware.
Novell desperately needs to change. It used to command about 70 per cent of the network operating system market, but the story changed dramatically when Microsoft launched Windows NT. Novell could not compete with the Seattle marketing machine, began to lose market perception and hence market share.
In April, Novell installed former Sun chief technology officer Eric Schmidt as CEO, and soon the company watchwords were internet and intranet.
Richter said: ?By 2001, the intranet/internet services market will be worth $17.6 billion. If we take just 10 per cent of that, we will double our revenues.?
That is something Novell needs to do. Last week, it reported a loss of $122 million for its third quarter, ended 31 July, which was greater than its total turnover of $90 million and twice what Wall Street had predicted (PC Dealer, 27 August).
Novell?s internet/intranet push is based on its Novell Directory Services (NDS) technology. Revenue will be generated from sales of second licences of NDS, plus add-ons such as messaging product Groupwise, management system Managewise and intranet firewall tool Border Manager. The fall-out from this strategy became evident last month when the company slashed 15 per cent of its EMEA workforce.
Novell is looking to Europe for growth, particularly Eastern European and some Southern European countries. Company chiefs have stated that by 2000, they want 60 per cent of revenues to come from non-US sales, about 35 per cent of which will be from EMEA. This means Richter will have to lift EMEA revenue from 29 per cent. To achieve this, Novell?s EMEA?s marketing budget has been increased by about 25 per cent. Richter said the money will be spent on selling one message and it will be more focused.
Richter calculated the company was three months into its transition phase, which is expected to take nine to 12 months. While CNEs will be expected to gain extra training to familiarise themselves with Novell?s products and markets, for distributors, the model will change from shifting red boxes to licensing, which requires less administration and allows for multiple licences.
During its third quarter, Novell stopped shipping boxes to distributors so they could shift their stockpile of products. The aim is to cut inventory levels to 30 to 35 days.
The measure of Novell?s strategy will depend on the success of its resellers, and how soon they take on the challenge. Richter concluded: ?Some resellers could be early adopters, so they can be ready when demand explodes. If they just wait and see, it might be too late.?
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