March 18, 1997 6:15 PM ET
Novell's Marengi says his future at company is 'Up to Schmidt'
By John Dodge

  Novell Inc. President and Chief Operating Officer Joseph Marengi, while expressing optimism about incoming chairman and CEO Eric Schmidt, said today he has not been assured that he will continue in his current capacity.

"It's up to [Schmidt]. I can't answer any questions about the future. Right now, I am president and COO," Marengi said, speaking from his office in Provo, Utah. Schmidt, who was traveling, according to Marengi, could not be reached for comment. Still, in a press release, Schmidt said Novell had made strides during Marengi's six months of leadership.

Despite the uncertainty, Marengi paid tribute to his new boss, claiming Schmidt was tops on his list of CEO candidates from the beginning. "He was my first choice six months ago, but we've been negotiating seriously for the past month and a half," Marengi said. He declined to reveal the names of other contenders.

When Marengi was named president and chief operating officer August 28, he said he hoped to get the top spot at the company, but several weeks later acknowledged he probably would not be CEO. Marengi consistently said his strengths resided in operations, sales and marketing, not playing the role of technical visionary.

Marengi listed the "One Novell" program as his primary accomplishment. "It was an internal program that locked down the strategy on four key products -- IntranetWare, GroupWise, ManageWise and [forthcoming] Border Services. We now have a strategy we feel comfortable with," he said.

Border Services, which Novell will talk about next week at its Brainshare conference in Salt Lake City, are products that integrate public and private networks. Its chief components are firewalls, proxy cashing servers and virtual private networks, Marengi said.

He also said the company's survival is not a question of Microsoft Corp. or Novell. Rather, "It's Microsoft and Novell."

While the press and analysts have labeled Novell a niche player, the company during the last quarter increased its cash reserves by $75 million to $1.1 billion, Marengi said. "Wall Street still got down on us [even though we did that]," he said.

Asked if Schmidt's arrival suggests tighter ties between Sun Microsystems Inc. and Novell, two companies that already enjoy a strong relationship, Marengi replied affirmatively. "Sure, there will be more things coming forward between the companies, but I can't be specific."

However, Schmidt comes in as an independent voice, not as a facilitator of a merger between Sun and Novell, Marengi added.

He expressed relief that the job was finally filled. "We said four to six months to find a CEO and only missed by a couple of weeks." Former chairman and company founder Ray Noorda took years to find his replacement in Robert Frankenberg, who resigned under pressure just prior to Marengi's ascension into his current job.

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