Services Up, Sales Down in Novell's Seesaw Year

Novell has attributed its strong revenue growth in Australia and New Zealand for the fiscal year 2000 to a 29 per cent increase in software licensing sales.

Accompanying this was a 45 per cent revenue growth in services, according to Novell Australasia managing director Cliff Smith.

"In common with the rest of the world we have experienced a decrease in revenues for shrink-wrap software from pre-Y2K levels," he said.

"Some of this can be attributed to the conversion of packaged sales to site licensing sales and this change in the purchasing model is more advanced in Australia and New Zealand than other parts of the world."

Last week Novell reported total revenue growth of 35.4 per cent in Australia and 25.4 per cent in New Zealand.

However, on a global scale Novell chairman and CEO Eric Schmidt said fiscal 2000 has been a very difficult year as a result of a dramatic decline in packaged software sales.

Packaged software declined by 47 per cent accounting for 23 per cent of total Novell revenue.

Schmidt said growth in new Internet services didn't accelerate fast enough to offset this decline.

Last week Novell reported fourth fiscal quarter revenue of $US273 million compared to $345 million the previous year.

In addition to an erosion in software sales, Novell chief financial officer Dennis Raney said the results also reflect continued weak performance in Europe where revenue declined 33 per cent.

He said Novell is rebuilding its channel around partners who can support the company's new Internet services. Performance will continue to be soft until it establishes its new group of partners.

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