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We do creative bundling, which lets customers get eDirectory for free. The costs are in terms of the services that run on top of the directory, like single sign-on, or security or something from a third-party company. Novell has 58 partners that distribute eDirectory with their products. We don't charge for that privilege. What is the biggest technical argument for using eDirectory?
Perhaps the biggest thing is that we embrace the entire network. We are applicable across Linux, Unix, etc. The Microsoft story is about Windows. Active Directory manages a Windows environment, and the applications that integrate with it are ones that serve the Windows environment. We do not promote either/or or "rip and replace" strategies. We believe our customer base is best served by strong interoperability. Many customers have Active Directory because Exchange 2000 requires it. But they also want the benefits of eDirectory. We focus a lot so that we can coexist, so for our customers it looks like they are consolidated rather than running separate silos in their environment. What's your biggest challenge in terms of getting a customer's attention?
We have a perception problem. Most customers know Novell for Netware. People perceive Novell for Netware and the directory for Netware. But the biggest share of eDirectory runs in non-Netware environments. Once we get past that, it's more of a technical challenge, and we win most of those. Of 423 million eDirectory licenses, only 28% are eDirectory licenses bundled with Netware. The other 72% are licenses that are used with a partner application or with another Novell product. When customers choose Active Directory over eDirectory, what is the reason they give?
It's typically because they are standardizing on a Windows platform, or they are being driven by Exchange 2000. Exchange 2000 is the strongest pull for Active Directory right now. Microsoft enjoys the perception that Active Directory is free because it's part of the operating system which customers pay for. We suffer with this as well. Though we provide ways for people to get eDirectory, it doesn't have the same perception. Would you claim any disadvantages against Active Directory?
Certainly not. Active Directory is well-suited to manage a Windows server environment. It's integrated well with the operating system, so tightly in fact, that it's a feature of the Windows environment. There is no Active Directory product. eDirectory is not the same kind of product. It runs on the operating system, not as part of the operating system. The advantages of eDirectory are more evident as you start deploying all non-Microsoft applications or you need to deploy in mixed environments. In your opinion, what is the strategic value of both products to their respective companies?
Active Directory does not have the appearance of being strategic to Microsoft, whereas eDirectory is fundamental to what we do at Novell. We have a stronger vision for the future both in the development of technology as well as the role it plays in Web environments. Most of the strategic initiatives rolled out by Microsoft do not include Active Directory. Once customers switch to Active Directory, is it possible for you to win them back?
It's a tricky thing. Active Directory is more a feature of Windows 2000 or XP. Customers will roll to these platforms if they use those products. Our strategy will not be one of replacement but one of coexistence and of interoperability. We are protective of the larger space for Internet applications; portal applications and security, and we will actively compete on those fronts. We will compete against Active Directory there too if and when any solutions are deployed in that space. What is your strategy for marketing against Microsoft?
It has several dimensions. Our strongest message is one of interoperability and coexistence. Our second message is one of technical superiority, and we do that in terms of reliability. Novell's directory has a good reputation for being non-stop, reliable and fault tolerant. That's a strong message for us because Active Directory doesn't have a reputation for great reliability. And we go out with a message that we support more diverse environments. The popular portal and security applications are the ones we use to drive eDirectory.