Montgomery Tech Week: IBM, Novell Presentations Irk

Money managers attending both sessions were annoyed they didn't hear what they wanted. Also, Wildfire's no-show.
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SAN FRANCISCO -- When your core business isn't doing so well, you've got to dig deep to find some positive spin. IBM's (IBM) - Get Report session at the annual NationsBanc Montgomery Tech Week conference deftly hammered that point home.

Instead of sending a high-level executive who could address recent concerns over weak mainframe and server sales, IBM delivered David Walling, manager of the company's hard-drive strategy, to tout its fastest-growing area: disk drives. Revenue from this division grew by 55% year over year, while growth in all server lines dropped and mainframe hardware and software slipped 1%. The problem is that IBM's mainframe platform represents about a third of Big Blue's 1998 gross profit, analysts estimate.

Walling tried to hold the crowd rapt by explaining that IBM's disk-drive sector was working on pushing down costs "to bring them in line with the industry." He bragged about a 40% market share among notebook computers and touted a new one-inch micro drive with 340 MB capacity that arrives in the second half of this year.

"I guess it's to be expected," said an East Coast-based fund manager, who currently isn't invested in IBM. "They need to promote the best part of their business right now."

--

Medora Lee

The High Cost of Discretion

Then there's the risk of not delivering good news -- especially if that's what the crowd came to hear. Just after Big Blue finished, Chris Stone, senior VP of strategy and corporate development at

Novell

(NOVL)

, took the stage -- only in a much more subdued tone.

Rather than touting a hot new product that will compete with

Inktomi

(INKT)

, Stone decided to talk about its directory products, which constitute 80% of the software maker's revenue.

"The presentation was terrible," said Tejinder Singh, managing director of

Reliance Capital Management

, who could not understand why Novell didn't take the chance to hype itself more to investors. "I don't know why they were beating around the bush."

Though Singh still believes Novell has great potential, the lackluster presentation failed to sway another fund manager who sat in to see what the company was all about.

"No, I wasn't convinced after the presentation," he said, adding that he didn't think he would buy any shares.

--

Medora Lee

Wildfire's No-Show

Privately held

Wildfire Communications

had a surprise for those who came to its Tuesday afternoon session: It didn't show.

A spokeswoman for Montgomery said she didn't know Wildfire wouldn't come until about 10 minutes into the company's scheduled 3:00 p.m. PST session. But Wildfire claims it told its contact at Montgomery weeks ago that it wasn't planning on attending and that the contact never told the event planners. To that, Montgomery says it sent out a confirmation to Wildfire last week that Wildfire failed to answer.

The company makes software used in handheld computers that helps track down those hard-to-reach people. "Ironically," said one money manager, "they were nowhere to be found." Witticisms aside, Wildfire's absence has tainted this potential investor's view of the company. "I wouldn't go to their road show now," he said. "This just shows me that they are irresponsible."

"We were shocked to know that people were shocked that we weren't there," company CFO Donald Sullivan said in a phone interview. "It wasn't a matter of us not showing up, but rather we had no intention of showing up."

--

Suzanne Galante