Novell: Struggling to halt revenue slide
For all of the Linux hoopla that Novell is generating, Linux still represents a fraction of the company's sales. In the fourth quarter, for example, Linux Platform Products accounted for US$13 million of the company's US$245 million in total revenue.
Besides Linux, the other key growth area Novell has identified is identity and access management, a segment that generated US$24 million in the company's final quarter.
Meanwhile, the company reported that "revenue from Open Enterprise Server and NetWare-related products declined 25 percent from the year-ago period."
Novell finished 2006 with revenue of US$997 million, a decrease of 7 percent from 2005, and profit of US$32 million, compared with US$373 million in 2005, but the latter included a US$448 million net legal settlement with Microsoft.
Clearly, Novell has its work cut out for it, with large-core segments declining more rapidly than smaller, more promising new categories are growing.
Cisco: Juggernaut rolls on
Network heavyweight Cisco doesn't have to worry about balancing the new against the old. Revenue rocketed up 15 percent to US$28.4 billion in 2006, largely on the back of the US$6.9 billion acquisition of Scientific Atlanta, the company it is relying on to get into the video distribution game.
Profits, however, dipped 3 percent to US$5.6 billion in the company's fiscal 2006, which ended July 29, the first slide in recent memory. The company partially blames new regulations that require it to account differently for stock-based compensation expenses.
Cisco's fiscal year ended last July, and the quarters that landed in calendar 2006 tell an even better picture. Revenue has increased a whopping 23 percent to US$31.8 billion compared with the preceding 12-month period, and profits have increased 14 percent to US$6.4 billion.
Yet Cisco seems rather docile of late, a huge predatory beast that is laying low, still trying to digest its last big prey, Scientific Atlanta, which added 8,000 employees to its ranks.
The biggest news last year was the launch of the company's TelePresence video conferencing effort and the release of Call Manager 5.0, which shifts its IP PBX offering to Session Initiation Protocol and Linux. Otherwise, Cisco seemed content to ride on the coattails of existing products:
- Its core enterprise platform, the Cisco Catalyst 6500, passed US$20 billion in sales.
- The company shipped its 8 millionth IP phone.
- Some 60 service providers are said to have adopted the Cisco Carrier Routing System since it was introduced two years ago.
- Enterprise customers have installed more than 3 million of the company's wireless access points.
Cisco did acquire eight companies last year, but all of them were small fry, with fewer than 100 employees, and most of the deals were worth less than US$50 million.
