NetWare price increase annoys users

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PROVO, UTAH -- In a risky move to push users toward NetWare 5, Novell this week will raise the price of NetWare 3 and 4 by 5% to 17%, the company announced in a letter to its reseller channel.

The company says prices for all user versions of NetWare 3 and 4 will equal those of NetWare 5. With the price hike, larger sites will be hit the hardest; for example, a 250-user site for NetWare 3.12 will now cost $14,700, up from $12,500.

Smaller sites will be affected with smaller price increases; for example, a 100-user NetWare 4 site will now cost about $8,200, compared with $7,800 previously.

Novell claims it is moving closer to the flat per-user pricing the company has adopted for BorderManager, its Internet security and access package, and its ZENworks desktop management software.

Mixed reactions

Users' reactions to the announcement were mixed. While some users will accept the price increase as an incentive to move to NetWare 5, others rejected the move, saying they would stick with their present NetWare versions or consider moving to Windows NT.

Analysts questioned the timing of Novell's announcement, saying price increases are particularly inauspicious considering the impending availability of Microsoft's Windows 2000.

"This is a bad time for Novell to be raising prices. If the company is under severe attack from Microsoft trying to take the application and the file and print server business from Novell, raising the price would seem to play right into Microsoft's strategy," says Dan Kuznetsky, an analyst with International Data Corp., a market research firm in Framingham, Mass.

"The point is in many users' minds that 'If it's not broken, don't fix it.' Any attempt to push them might push them right off the product onto some other product, especially when Microsoft has capabilities to easily migrate NetWare 3 users to Windows NT," Kuznetsky says.

In fact, one user sees the price increase as a disincentive to stay with NetWare 4.11 and says he will be one of the first to switch.

"Novell is trying to wean users off [NetWare 3 and 4] products because it's a support headache for them. What they should do is offer an upgrade incentive and not raise the prices. They have annoyed me so much that Novell is no longer strategic in my plans," says one IS manager, who asked not to be identified. "In fact, I'm weaning off all my Novell systems and going to Windows NT and Linux."

At present, only 10% of users have adopted NetWare 5, which the company introduced a year ago, a Novell spokesperson claims.

About 50% of NetWare users still have NetWare 4, while 40% still run NetWare 3.

NetWare 4 and 5 bring the advantages of Novell Directory Services management to NetWare; NetWare 3 depends on a previous style of user and resource management called Bindery Services.

NetWare 5 is also the first version of NetWare that uses IP as its default protocol; Novell's proprietary IPX was used in NetWare 3 and 4 is offered as an option in NetWare 5. In NetWare 3 and 4, IPX was the default protocol.

The waiting game

Julian Smith has been waiting for an incentive to upgrade to NetWare 5. Smith is director of IS for Thomson and Co., an advertisinng firm in Memphis. He would upgrade from NetWare 4.11 to 5 were it not for the Macintosh workstations in his network.

"Presently there is no reliable way to make the Macintoshes talk IP. Until that happens, I'm stuck with NetWare 4.11, and I need to buy some additional servers next year," he says.

Being able to put Thomson and Co.'s entire network on IP is something Smith can't get his hands on yet.

The price increases do not affect users with existing licensing agreements with Novell.

According to Novell, any user with about $10,000 to spend per year on NetWare is eligible for licensing programs.

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