Competitors are yet to make an impact on Novell's traditional product revenues in Australia and New Zealand, according to an industry analyst.
Geoff Johnson, research director for Gartner, said: "Effects of reduced revenues are not affecting the Australia and New Zealand arm today as much as they are in the US. In the US, the effect of Windows NT has had a much bigger impact and this has not yet occurred in this region."
The Australia and New Zealand operations of Novell for the first nine months of this year experienced 15 per cent (in US dollars) growth compared to this time last year. Third-quarter figures for the company worldwide showed an 83 per cent drop in income to $US8.6 million on revenues of $US270 million.
Johnson said it doesn't really matter what is happening here as the "engine room" is in the US, and that it will only be a matter of time before the same reduction in revenues happens here.
"The service component only accounts for about one-sixth of [Novell's] revenue, so any threats to product revenue can be quite dramatic for the company.
"The problem for Novell is that other products are taking up its traditional market space, so I envisage them leveraging their directory products. So much of e-commerce requires directory products, so they are in the right space but they are up against tough competition," Johnson said.
Johnson predicts Novell will probably end up going into professional services.