The local-area network operating system battle now looks like a two-company fight.

For Novell Inc., Provo, Utah, the battle could be a fight for survival-or at the very least, a turning point-as the company tries to bounce back from a series of management missteps. For Microsoft Corp., Bellevue, Wash., the competition presents the firm with an opportunity to provide municipal government agencies with all the important software they need.

Government agencies are aware of the stakes. Almost universally, they have started to move away from Novell's NetWare and inch closer to Microsoft's Windows NT. But agencies have installed thousands of NetWare servers, and replacing them is no simple task. For the moment, coexistence, rather than obsolescence, seems the surest path.

Microsoft is gaining momentum because customers' buying considerations have changed. But NetWare made its mark by offering organizations fast file and print services, which were once the key buying considerations. As agencies started to deploy client/ server applications in the early 1990s, application servers-specialized servers that support specific applications, such as a database management system (DBMS)-became the top customer concern.

The city of Long Beach, Calif., like a number of local governments, determined that Windows NT is a stronger platform for application servers than NetWare. The city, which has 1,600 users who work with PCs running Windows and Windows NT, has relied on NetWare for close to a decade and has 20 NetWare servers.

Terry Evans, the manager of end-user computing in Long Beach, said the city became interested in Windows NT in 1994. "DBMS manufacturers were delivering product enhancements first for Windows NT and only later offering them on NetWare," he explained. The gap extended to vertical applications. Last year, the city selected a park and recreation facility-management system from Escom Software Service Ltd., Burnaby, British Columbia, and discovered the package runs only on Windows NT. Consequently, the city's number of Windows NT servers swelled to 10.

There are many reasons why Windows NT has emerged as the stronger application server. In designing NetWare, Novell engineers left out features, including protected mode, a pre-emptive scheduler and a memory manager, which could slow NetWare's file and print functions. As customer interest shifted toward application servers, the need for such features became more important. NetWare lacks these capabilities; Windows NT includes them.

Another issue is Microsoft's industry clout. "Microsoft's marketing machine has been in full gear the past couple of years, so the company has garnered a great deal of mind share," stated Larry Donofrio, the president of Leslie Integration Services Inc., a New York-based computer reseller. Microsoft has turned working with third parties into an art form and has convinced thousands to support its products, he said.

Such success has enabled Microsoft to provide more and more of the software that municipal agencies require. The city of San Antonio, Texas, now relies almost solely on Microsoft for software to support its 3,000 users. On the desktop, the city relies on Windows, Windows for Workgroups, Windows 95 and Windows NT operating systems.

The organization was one of the first to turn to Microsoft for a LAN operating system, and it selected LAN Manager, the precursor to Windows NT, in the mid-1980s. The city uses Microsoft's Office for office automation functions and BackOffice to manage its computers.

David Francis, a network engineer for San Antonio, said the biggest benefit of relying on Microsoft is that the different products usually work well together. He added that Windows NT has a couple of weaknesses: The product lacks clustering and redundancy features. However, Francis expects Microsoft to address those issues in the release of Windows NT 5.0.

When that software will arrive is unclear. Microsoft had planned to deliver the next release by the end of 1997. The company plans to complete two beta cycles for Windows NT. The first cycle is scheduled to run until June, and the second will follow sometime later.

Novell is ready to counter Microsoft's next release with NetWare 5.0, which is scheduled to arrive by summer. Coleman Barney, the director of NetWare products at Novell, said the new release will include more sophisticated file and print capabilities as well as support for Java, a programming language from Sun Microsystems Inc., Mountain View, Calif.

NetWare already is more technically advanced than Windows NT in one important area: directory services. The Novell product offers global directory services (see sidebar)-a capability Windows NT lacks. Consequently, certain agencies view NetWare as a better LAN operating system than Windows NT.

Florida's Hillsborough County, with about 3,000 department administrators spread over 80 sites, is one such example. The county has used NetWare since the mid-1980s, and it uses Novell's Groupwise groupware package. The county also relies on Novell servers for 95 percent of its networking needs.

The county has a couple of Windows NT application servers, but it is bullish on NetWare. "Novell offers much better directory services and faster file and print services than Microsoft," said Bill Kannberg, the county's network administration manager. Consequently, Hillsborough expects to continue relying on NetWare for most of its networking functions.

While Novell welcomes such support, the company faces an uphill struggle. Revenue has plummeted from more than $2 billion in 1995 to less than $1 billion in 1997.

Part of the drop stems from a change in strategy. Novell purchased a handful of products-including a Unix operating system, a word processing program, a spreadsheet program and database software-with the intention of integrating them and challenging Microsoft as the industry's most influential supplier. The anticipated synergy never occurred, so Novell sold the products and concentrated on LAN technology. Novell's Barney said the company also changed the way it counts revenue, focusing on end-user purchases rather than shipments to distributors. That change had an impact on revenue.

There is one more troubling reason for the revenue drop. A growing number of organizations view NetWare as antiquated, and they are replacing it with Windows NT. The Indiana Bureau of Motor Vehicles, Indianapolis, made that decision in the summer of 1996. "We felt we could reduce our operating costs by working with fewer vendors," said Michelle Moore, the director of information services at the bureau.

Migrating the department's users was not a simple task. "We didn't have any Microsoft-certified engineers on staff, and the local reseller was not as responsive as we would have liked," Moore said. The change was completed in the fall of 1997, but the agency has not determined yet if the switch will result in reduced maintenance.

There is a downside to working with one supplier: vendor lock-in. Long Beach's Evans said, "As a customer, I wish Microsoft were more willing to integrate its products with other vendors' wares. For instance, Windows features tend to work better with Microsoft's Access and SQL Server than other suppliers' DBMSs."

Microsoft's strategy also is evident in the LAN operating system area. Earlier this year, Novell delivered a version of its directory services that operates on Windows NT. With this capability, corporations could manage the two operating systems as a single unit rather than as two autonomous systems. Initially, Microsoft refused to provide any technical support to customers using the product, but later the company agreed to deal with any issue except for directory or security problems.

Microsoft's desire to provide customers with all its software is evident in the company's Internet strategy, which is creating a new shift in LAN operating system buying considerations: Buyers are switching their focus from application server features to Internet features. Microsoft has developed a soup-to-nuts suite of Internet tools: the Explorer browser; Internet Information Server, which is bundled with Windows NT; a World Wide Web server; Active X, a Web programming language geared to competing with Java; and add-on applications, such as Microsoft Internet Commerce Server.

Novell's strategy is more cooperative. The company has worked with Sun so that the next release of NetWare will run native Java applications. Novell also has undertaken joint development work with Microsoft's chief Internet competitor: Netscape Communications Corp., Mountain View, Calif. Novell now bundles Netscape's Navigator browser with NetWare, and the two companies have been developing a version of Netscape's SuiteSpot Web applications, which run on NetWare. Novell built its own Web server, but Novell's Barney said the company will phase that product out and rely on Netscape's wares.

This latest round in the LAN operating system battle began only recently, so there are not yet any clear leaders. When 1998 draws to a close, it will be more evident whether Novell will regain its lost luster or be hammered by the Microsoft juggernaut.

-- Paul Korzeniowski is a free-lance writer based in Sudbury, Mass., who specializes in networking issues. He can be reached at [email protected]


The Directory Services Issue

To slow Microsoft's charge, Novell focused on directory services that store users' names, addresses and authorization levels and that enable employees to access applications, files and printers. With NetWare 4.0, the company delivered a global directory service so that a user anywhere on a network can access any application. Microsoft's directories are more server-specific: A user can access applications on the closest server but may have difficulty working with information stored on other systems.

NetWare Directory Service can help large organizations reduce network administration. With Novell's services, a technician can enter a change once, and it will be automatically relayed to all associated servers. With Windows NT, the updating usually requires manual intervention. Also, NDS makes it simpler for network technicians to determine which users work with various applications.

While users welcome the benefits of NDS, the product falls short of the full potential offered by global directories. Currently, organizations have multiple sets of directories: one for database applications, a second for LAN operating systems and a third for e-mail applications. Consequently, an administrator has to make multiple changes when a user leaves the company. Technicians would prefer to make one change and have all applications recognize it.

That becomes possible when third parties tailor their applications to take advantage of a supplier's global directory. To date, Novell has had limited success persuading third parties to take this step; although NDS helps companies more efficiently oversee NetWare servers, it is of little use in easing administration of other directories.

Rallying third-party support is a Microsoft strength, but the company has lacked a global directory. In Windows NT 5.0, the company plans to address this problem with a new directory: Active Directory.

Microsoft has already begun soliciting third-party support. Bob Kelly, the Windows NT server product manager at Microsoft, said the company published in 1997 the application program interface that suppliers will need to take advantage of Active Directory.

Third parties have already begun building applications that take advantage of Active Directory. But time will be needed for them to deliver their wares and for agencies to install them.

"The industry is moving to a time when one directory will oversee all applications, but it will take a couple of years before we get there," Kelly said.



* NetWare is a multitasking operating system in which a number of different tasks can operate simultaneously.

* Protected mode shields the tasks from one another. Without protected mode, two functions can vie for one resource-such as sending a file to a printer-and bring a server to its knees.

* A pre-emptive scheduler ensures that no single task takes overall operating system functions. NetWare completes tasks on a first-come, first-served basis.

* A memory manager moves information from central storage to a hard disk. If a program is too large or if too many users access a server, the manager can ensure there is sufficient memory to handle all requests.


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