Press Release

Novell Announces New Product Licensing Programs For Large, Medium And Small Customers

Novell Customer Connections Makes it Easier for Customers to Purchase, Install, and Maintain Novell Technology through Alternative Licensing Programs

SAN JOSE, CA -- January 17, 1995 -- In direct response to the requirements of its customers, Novell today announced a new set of sales delivery programs that provide customers more flexibility, and ease of purchase, installation and maintenance through comprehensive new licensing and service options. Called Novell Customer Connections (Novell CC), this new initiative offers volume discounts on the purchase of Novell products and a variety of services, support, education, input on product development and upgrade options. The program is designed to span the diverse needs of large, medium and small sized businesses.

Novell Customer Connections consists of three programs, two of which are new and being announced today. The two new programs are the Corporate License Agreement (CLA), and the Volume License Agreement (VLA). They join the Master License Agreement (MLA) which is directed at named accounts, and is already in place. With Novell Customer Connections, organizations can now purchase Novell products in the way that benefits them most --whether they purchase a small volume of applications or opt for corporate-wide licensing. Novell Customer Connections provides pricing stability, easy access to products, and offers the advantages of the value-added services of highly qualified Novell resellers. It also gives customers the benefits of a closer relationship with Novell, including direct technical support.

Corporate License Agreement

The CLA program is targeted at medium and large sized customers and offers cost-effective access to Novell products via site licensing or volume discounts. Through this program, customers can purchase licenses for all Novell network and applications products in volume at any time during the term of the contract. As part of the site licensing program, customers may also purchase all Novell products on a per-workstation basis, enabling them greater flexibility in managing larger enterprises. The CLA provides the customer with flexible purchasing and servicing options that reduce the costs of acquiring, maintaining and managing Novell software products across their organization. By making the CLA available through Novell Corporate Account Resellers, Novell ensures that customers receive a high level of value added services from resellers in addition to receiving the benefits of volume discounts.

The CLA is a two tiered program enabling customers to purchase: (1) all Novell products, or (2) applications only. To participate in the CLA, the minimum initial purchase is $40,000 for applications only, or $160,000 for all Novell products over a two-year period.

Volume License Agreement

The VLA is a program designed for small and medium sized businesses that wish to make volume purchases of applications or NetWare licenses at volume prices without requiring a contract. The program offers customers the choice of buying new licenses only, upgrades only, or both, and offers three purchase options: NetWare, applications products, or both. Companies can lock in their purchasing level for a two-year period, based on the volume of their initial purchase. The VLA is available through NovellŐs existing channel partners including Novell Platinum and Gold resellers. To participate in the VLA, the minimum initial purchase is $10,000 for applications only, or $155,000 for NetWare and applications.

"We have explored and identified new methods of providing Novell products to our customers in ways that benefit them as well as our valued channel partners," said Joe Marengi, executive vice president of Worldwide Sales for Novell. "Novell Customer Connections enables customers to purchase our products at volume prices as well as gaining the advantages of a direct relationship typically reserved for named accounts. This strengthens our ability to meet their needs and offer product and pricing that is in line with their technology direction today and in the future."

Novell Customer Connections will be available beginning February 15 in the United States to all markets including commercial, education and government. The service options associated with Novell Customer Connections are also announced today and are outlined in a separate news release.

Novell Customer Connections (Novell CC)Program Highlights

The following is a summary of the options available in 1995 to Novell's Customers under the Novell Customer Connections program.

Master License Agreement (MLA)

The Master License Agreement provides a direct relationship with Novell, and is reserved for a defined list of Novell's named top 100 strategic customers. New for 1995, the program offers two purchasing options: Option 1 for all products, and Option 2 for applications products only. The program includes maintenance (updates, upgrades, and Help Desk Support) directly from Novell.

Corporate License Agreement (CLA)

The Corporate License Agreement is sold through Corporate Account Resellers (CAR), and is a two-way contract between the customers and the reseller. The program offers two entry points, one for all products, and one for applications purchases only. It is targeted to medium to large type businesses. A Site license option is available for implementation across a division or physical location.

Volume License Agreement (VLA)

The Volume License Agreement requires no contract. Customers can make single volume purchases of applications or NetWare licenses. It is sold through distribution, and is open to all Novell Authorized Resellers. The program offers six discount levels, four for applications and two for NetWare product. Customers can lock-in their purchasing level for a two-year period based on the volume of their initial purchase.

Additional details of each of these programs are provided in the attached program highlights.

Novell Customer Connections Volume License Agreement (VLA)

Program Highlights

The Volume License Agreement is an easy-to-use, non-contractual method for Customers to purchase software licenses at volume discounts. VLA provides Novell with a low cost, low administration vehicle for capturing revenue from Customers in a single purchase. Customers have the ability to buy new licenses only, upgrades only, or both. The program offers three purchasing options. Customers can purchase NetWare only, NetWare and Applications, or they can limit their purchases to applications products, with a lower initial purchase requirement. The initial purchase sets the discount level for a 2 year period.

Key Benefits

Low Maintenance: No contract, no license tracking, 2-year discount lock, no quarterly reports.
Ease of Use: Volume discounts without lengthy contract process
Flexibility: Purchase exact quantity of licenses needed
Low Cost: Products sold "license only," unbundled from cost of documentation and support

Term

Discount level set and included in unique customer number Two Years from date of initial order

Customer Eligibility

  • Targeted toward small to medium businesses that want to buy in volume with no contract
  • Minimum purchase $155,000 ($100,750 net) for NetWare
  • Minimum purchase of $10,000 ($3,700 net) for applications
  • Follow-on orders have minimum buy of $10,000 ($6,500 net) for NetWare and $3,000 ($1,100 net) for applications

    Volume Discounts to VLA Customers are as follows:

    Levels A,B,C, and D are for applications purchases. Levels E and F are for NetWare purchases. 

    


    
Level           Purchases (Gross)          Purchases (Net)          Customer Discount
A               $10,000                    $3700                    63%
D               $150,000                   $51,000                  66%
E               $155,000                   $100,750                 35%
F               $400,000                   $252,000                 37%



    


  • Lowest entry point, lowest level of discounts, and widest distribution of all Major Markets Sales Agreements 
    

  • Utilizes existing Novell Channel
    

  • Uses published discounts from standard Novell Bulletin price list
    

  • No helpdesk or end user support offered under program--all sold separately
    

  • All hardcopy documentation sold separately
    

    To Participate 
    
Customers: 
    

  • Submits Special Order Form along with a P.O. to Novell Authorized Reseller of choice. 
    

    
Resellers:
    

  • Forwards Special Order Form and P.O. to Distribution
    

    
Distribution:
    

  • Forwards Order Form and P.O. to regular Novell contact 
    

  • Buys licenses at customer discount level minus 15% DFR
    

    
Applications Delivery
    

  • Customers shipped one full copy of product to serve as master along with right to copy
    

    
NetWare Delivery
    

  • Initial Order is packaged and shipped to designated delivery location
    

  • Follow-on orders fulfilled from existing stock or by special order
    

    
Novell:

  • Prints license forms and ships to reseller/customer
    

  • Assigns unique customer number that identifies customer's discount level
    

  • Ships special order
    

  • Provides electronic or hardcopy listing of customer numbers to distribution
    

    Novell Customer Connections Corporate License Agreement (CLA)
    

    Program Highlights
    
The Corporate License Agreement provides an easy-to-use purchasing vehicle, allowing customers to purchase licenses for Novell networked and applications products. The program will be sold through a select group of Corporate Account Resellers (CAR).

    
The program allows customers to make ongoing volume purchases during the term of the contract. Fulfillment is through the reseller, who is provided with a Master Library of non-serialized software (CD planned as soon as available). The program offers two purchasing options. Option 1 serves the customer wishing to purchase both the networked and applications products, while Option 2 serves the applications-only customer. Site licensing is available.

    Key Benefits to Customers
    

  • Volume license pricing
    

  • Only program with published site license pricing
    

  • Set discounts
    

  • Annual maintenance optional
    

  • Provides 3-way partnership between customer, reseller, and Novell
    

  • Discounted Education options
    

  • Private CompuServe Forum
    

    Volume Discounts to CLA Customers are as follows:
    
(Discounts will apply to SRP List prices as published in the CLA Product Availability and Pricing List.)

    



    

            Option 1 - All Products             Option 2 - Applications Only

    
Purchases   Purchases      Customer      Purchases      Purchases      Customer
(Gross)     (Net)          Discount      (Gross)        (Net)          Discount

    


$160,000      $104,000       35%
$400,000      $252,000       37%           $40,000        $28,800        28%
$485,000      $300,700       38%           $55,000        $39,050        29%
$575,000      $350,700       39%           $70,000        $49,000        30%
$700,000      $420,000       40%           $100,000       $69,000        31%
$850,000      $501,500       41%           $135,000       $91,800        32%


    







    Customer Eligibility
    

  • Targeted to medium to large businesses
    

  • Minimum purchase is $160,000 ($107.2K net) up-front for Option 1 

  • Minimum purchase is $40,000 ($28.8K net) up-front for Option 2
    

    

  • Published program--Wider distribution than MLA
    

  • Sold through Corporate Account Resellers
    

  • Provides a site license option allowing customers to cover all workstations for single annual fee
    

  • Optional maintenance and technical support
    

  • Optional end user support package for applications
    

  • Unique Price List, updated quarterly
    

    Term
    

  • End User Contract:  Two year contract, with option  to renew. 
    

  • Reseller Contract:  One year contract, with annual certification/renewal
    

    Participate
    
Customers:
    

  • Sign contract with CAR
    

  • Meet program requirements for initial and life of contract purchases
    

  • Make purchase of desired products and customer service options
    

    
Resellers:
    

  • Meet entrance criteria for size, credit, sales force, security and control systems for masters, etc. 
    

  • Sign Corporate Account Reseller Agreement with Novell
    

  • Closes sale with customer and submits signed contract and Purchase Order to Novell
    

  • Assume full responsibility for tracking, reporting, and payment to Novell
    

  • Fulfill delivery of Masters for non-serialized software
    

  • Deliver serialized software from registered banks of System 1 diskettes purchased from Novell
    

  • Perform annual re-certification and invoicing for Site Option customers
    

  • Reseller deducts 10% from royalty (DFR) 
    

    
Novell:
    

  • Tracks customer data for Novell interface and delivery of program benefits
    

  • Provide each partner with Master Library of non-serialized software
    

  • Fulfills reseller orders for System 1 diskettes
    

    Summary Notes
    
Provides reseller with sales vehicle to increase penetration into large accounts
Ensures broad distribution of all key products through Novell channel
Provides customers with benefits of strong reseller relationship and a direct relationship with Novell
    
Novell Customer Connections
    
Customer Quotes
    
January 17, 1995
    

    
"Novell Customer Connections provides a true 'win-win' situation for the customer and for the reseller. With this program we will be able to continue to provide the same high level of value added services to our corporate customers and rapidly expanding base of mid tier customers who will now be able to take advantage of the benefits associated with site licensing. This is a truly exciting announcement that will enable Software Spectrum to reach new customers and offer, install, service and support Novell's world class products."
    
Rose Hultgren, Director of Marketing
    
Software Spectrum; Dallas, TX    

    
"Freedom of choice, site licensing, a flexible time line, and an overall reduction of administrative overhead are the immediate benefits Monsanto will realize with the Novell Customer Connections program. We now have the freedom to work with value added resellers and/or Novell to obtain the benefits they provide, while taking advantage of a volume discount and a quarterly pricing model. With this new program, we will be able to reduce the resources required to keep track of the software licensed to us, which will enable us to focus those resources on generating a competitive advantage that we can pass on to our customers."
    
Alan K. Jones, Corporate Purchasing Specialist
    
Monsanto Co.;  St. Louis, MO    

    
"The new Novell Customer Connections program will address our corporate customers' varied licensing needs. The two-tiered approach within levels adds flexibility to the customers' purchasing decision and provides the feel of a customized program. With this new licensing program, Novell reaches a broader scope of Corporate Software customers."
    
Cynthia Firth Wilson, Senior Vendor Manager
    
Corporate Software, Inc.; Norwood, MA    

    
"The new Novell Customer Connections Program is an innovative approach to licensing. We look forward to the exciting combination of Novell Netware and Novell Applications available on the same contract."
    
Paul Jarvie, Vice President, Marketing
    
ASAP Software Express; Buffalo Grove, IL    

    
"Softmart has enjoyed a solid strategic partnership with Novell and WordPerfect for over a decade, and our friendship with Novell has only grown stronger since their acquisition of WordPerfect. An example of Novell's willingness to listen to our customer's needs is the Novell Customer Connections Licensing Program, which embodies many of the users requests and comments Softmart has discussed with Novell. Novell Customer Connections will make it faster, easier, and less expensive for corporate customers to implement and purchase Novell's family of products."
    
A. Richard Sloane, President and Chief Executive Officer
    
Softmart, Inc.; Exton, PA