Directory-enabled networking will define computing in the 21st century, and Novell has once again staked out a position in the forefront of a key technology movement.
This time, the company appears poised to seize the day instead of giving ground.
Novell Directory Services (NDS) has been evolving for 10 years into a mature, robust cross-platform system that many argue is the only enterprise-capable directory game in town. It is certainly the only global directory that boasts an installed base closing in on 50 million seats.
But the history of technology is littered with the corpses of great products that lost out to inferior ones. Companies often fail to get the word out to the right people, can't garner enough third-party backing, or have trouble convincing potential customers that they will be around to provide support and upgrades.
Novell stumbled badly earlier in the decade, blowing a near-monopoly of the LAN server market with an ill-conceived attempt to challenge Microsoft on the desktop. This two-front war alienated independent software vendors (ISVs), confused users and diverted resources and attention away from Novell's core network-services business.
The gravy train
The fast-moving world of high tech is usually unforgiving of such missteps. However, the growing need for an industrial-strength enterprise directory is providing Novell with a second chance, and the company is taking full advantage. After losing money in 1997, Novell shifted its focus to NDS and directory-enabled applications, and has now posted five strong quarters in a row.
All indications are that the reborn, refocused Novell will make a go of its directory strategy, provided it has learned from the mistakes of its past.
It's not NDS that will produce a steady revenue stream for Novell, at least initially. Rather, that job will fall to the applications that take advantage of the directory.
These products -- ZENworks, Border-Manager, ManageWise and GroupWise -- now account for 28 per cent of Novell's product revenue and generate a big chunk of its service revenue as well, although the company doesn't break out that percentage. At any rate, the directory-related products are the fastest growing segment of the company's business, said Michael Simpson, Novell's director of marketing.
The applications are also driving sales of Novell's flagship NetWare product. According to IDC, the company shipped more than one million new servers in 1998, up from 927,000 in 1997. NetWare 5.0, released in September, is winning performance tests and exceeding sales expectations.
"This is not about abandoning one business and replacing it with another," Simpson said. "They are perfectly complementary." Still, NDS is clearly the strategic technology going forward, and the industry seems to be paying attention.
Novell is licensing NDS to all comers, the idea being to seed the market and make NDS a de facto standard that will increase demand for Novell's directory-enabled applications. While these licensing deals don't produce much revenue at this point, that may change down the road if third parties start including NDS in products instead of building their own directories. The potential size of the directory services market is anyone's guess. Novell CEO Eric Schmidt has likened it to the SQL market, which he put at $US80 billion.
Other estimates range to "virtually infinite" if you consider all the various applications that may eventually be tied into a directory.
John Gantz, a senior vice president at IDC, said the Internet economy is fuelling a huge need for directory services. "The environment will change so fast that network administrators won't know what hit them," Gantz told the attendees at the Novell Global Partner Summit earlier this year in Utah. "Novell is manoeuvring into the right place at the right time."
A directory service is strictly an enabling technology, so its value is measured largely by the number, scope and quality of the applications that use it. Third-party support, therefore, is critical. Historically, Microsoft has been king of the ISV game, but Novell is making strides of its own.
Novell last year set up a $50 million venture capital fund to dole out cash to companies building NDS applications; so far it has given out at least $20 million. Additionally, the company's 'Get off your Apps' program provides development grants to startups building NDS applications. Officials say this program and other efforts increased Novell's ISV ranks fivefold in the past 18 months. More than 400 third-party applications that support NDS are now available, some from big name vendors such as PeopleSoft.
"The phone has been ringing off the hook with calls from companies wanting to integrate their products with NDS," Simpson said.
However, getting ISVs signed up and applications developed is just the beginning.
"Novell's support of development has improved quite a bit, but marketing support of developed applications is still nonexistent," said Robert Harbison, chief technology officer of voice over IP startup StarVox, a Novell and Microsoft ISV based in San Jose. "That's where Microsoft is really great. Microsoft shipped NT 4.0 with a sampler CD full of third-party applications from its ISVs. Novell has to do a lot more to help promote NDS applications."
The type of application is important, too. Utilities that enhance NDS' ability to manage user account information in NetWare shops are fine as far as they go, but they won't help to sell NDS as an enterprise directory. Offerings that showcase NDS as a much broader directory service are imperative, and recent announcements from leading switch vendors, as well as enterprise management specialist Tivoli Systems, represent a big step in this direction.
As part of an agreement announced in December, Tivoli -- a division of IBM, based in Austin, Texas -- is working with Novell to use NDS as a central data store for network and user information collected or used by Tivoli's Inventory, Software Distribution and User Administration tools.
NDS' unparalleled cross-platform support is particularly appealing to Tivoli. "Microsoft has traditionally misunderstood the importance of certain middleware technologies and how important it is for them to be cross-platform in nature," said Tom Bishop, Tivoli's chief technology officer.
NDS is now available on Hewlett-Packard's HP-UX, IBM's AIX, Caldera's Linux and The Santa Cruz Operation's Unix. Novell is releasing NDS for Sun Solaris and IBM's S/390 this quarter. NT is already supported by NDS, but only in environments with at least one NetWare server. A version of NDS that runs directly on NT without NetWare is due out this summer; it will enable users to build pure NT networks but still employ NDS.
Switch vendors embrace NDS
Another part of Novell's strategy for boosting NDS' role in enterprise nets is getting switch vendors on board. The company has been scoring big, with the likes of Lucent, Nortel Networks and Cisco announcing varying degrees of support for NDS.
At the switch level, directories provide an additional layer of security, and they ease administrative burdens by allowing for centralised device reconfiguration. Directories can also be used to automate the process of applying quality-of-service (QoS) and user-access policies to network devices.
Nortel, which last year acquired Bay Networks, is using a directory to build QoS capabilities across its entire product line, from the lowliest LAN devices to carrier-grade switches.
Some switch vendors have been working on their own directories, but they tend to be specific to their product lines. A neutral entity such as Novell is in a better position to provide an enterprise directory for a multivendor network.
"Novell already has a production-grade, scalable directory, and extending it to incorporate additional network elements such as switches and routers is very appealing," said Paul Parker-Johnson, product line manager for ATM network management and policy networking at Lucent's LAN systems group.
Microsoft's forthcoming Active Directory for Windows 2000 is viewed by many as NDS' primary competition. However, Active Directory's ship date continues to slip, and it won't emerge as an enterprise-level offering in its first iteration.
The big ISPs, and telecommunications companies in general, appear to be ripe for Novell's plucking.