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Developing on the road to success

Developing on the road to success

One of the biggest hits at this year's Novell BrainShare event held in Sydney recently was Phil Montgomery, a young Australian network engineer, whose company, Netoria, and its leading edge directory technology, were acquired by Novell in late May.

One undoubted reason for Montgomery's impact on the assembled network engineers and resellers was the importance of the technology, which will be at the core of Novell's work on enhancing its directory NDS. But a bigger reason was probably that Australia's leading networking technicians liked to identify with a success story of one of their own.

And they probably went away wondering how they, too, could gain such glory, and money.

But it's been a circuitous route to success for Montgomery, 34, and his partner David Calloway, 27. For Montgomery, it started when he left the army, where he'd been in the Ordinance Corps, and went to work with a training company in Canberra where he says he "got into" the Novell area.

This was back in the days when NetWare 3 had just been released. Montgomery ended up setting up a Novell-authorised education centre in Canberra and, after that, running his own integration business for 12 months.

He then contracted to the Department of Defence in Canberra for three years.

"We had something like 13 or so remote sites - we were a very heavy Novell shop, and I could see the challenges of deploying and managing remote sites and the issues," Montgomery said.

"I met another guy there who was on the help desk, Dave Calloway, who was a really highly skilled developer, but he couldn't find a job as a developer. We became firm friends and started writing some software together."

"We wrote the first version of SFLogin, for NetWare 4, put it on CompuServe and charged like $90 a copy and all of a sudden all of these cheques started arriving. And one of the first big ones that impressed us was when I think Volvo bought a whole site licence, for about $900 back then, and they used it on 15,000 workstations or so.

"So we started adding more and more features and in the end, we thought, we either commit ourselves fully to this, or we give it up. It gets to the point where you just can't work two jobs."

The two partners launched into it full time in July 1996 with, Montgomery says, three factors favouring them. First, sales were fuelled greatly by the global distribution mechanism provided by the Internet. Then there was the fact that their software solved a very specific problem. And finally, he says, they were helped a lot by Novell's encouragement, and he singles out Ross Ward in Novell's Canberra office.

In February 1997, wanting to establish a presence in North America, but realising they couldn't afford an office in two countries, Montgomery and his partner sold up everything they and their families owned in Canberra and moved to the US.

The timing was unfortunate from a financial perspective, as house prices in Canberra crashed following the change of Federal Government. "I lost $80,000 on my house and I got cleaned out," recalls Montgomery. "But that was the cost of doing it."

They set up in Orem, Utah, to be closer to Novell's main labs, but primarily because Silicon Valley was way too expensive.

Mike Samuelian from Vinca, whom the two had met while he was in Australia doing a roadshow, was very supportive of the two young entrepreneurs and encouraged them. In fact, when they got to the US, they lived in Samuelian's basement for a few weeks before they found a house. From $30,000 a month, the company reached $US1.2 million in sales last year and eight people, and it grew from one product to four. To date, Netoria has sold more than a million seats of its products, out of a total 50 million or so seats of NDS (Novell Directory Services).

A meeting in mid-1998 with Chris Stone, a senior VP at Novell, proved the next big boost to the fledgling company. Stone suggested funding Netoria via Novell Ventures. However, Montgomery and his partner soon realised they didn't actually need this kind of support. After investigating different options such as a licensing or OEM deal in January this year, at Novell's Partner Summit in Snowbird, Stone suggested Novell acquire Netoria.

It was to be Novell's first acquisition since it swallowed WordPerfect a number of years ago, before subsequently spitting that vendor back out again to Corel. The Netoria purchase seems to have broken a kind of logjam, with Novell subsequently buying a slew of other small companies that have useful technology.

Netoria, and all its staff bar one, are now part of Novell's New Product Initiatives group. This is the same area of Novell that has produced things like the new digitalme product, a directory-enabled technology for personal control of identity on the Internet, letting users decide what information stored in an NDS database is available to anyone else.

It's very likely that Netoria's software will now be incorporated into NetWare, ZENworks, and Novell's other directory-enabled products.


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