Novell, the multinational network software provider, has chosen Ireland as the central driver for all its European activities, and some of its critical software research and development.
Mr Eric Schmidt, chief executive officer of US based Novell, has told the The Irish Times there is "no question" more jobs will be moved to Ireland, adding it was too early to say how many.
Visiting Novell's Dublin based operation, where 100 people are employed, Mr Schmidt said Novell planned to run all its European operations through Dublin. "We are currently in the process of centralising our European administration and business systems here because its more cost effective for us to globalise our operations from Ireland."
Following a cost benefit analysis of Novell's global operations, the decision was made to centralise in Ireland for cost reasons. There are already key servers based at Novell's office in the Treasury Building on Grand Canal Street, including transcontinental links to facilitate online software trade.
According to Mr Schmidt, the presence of a number of Novell's competitors here was also a key decider in strengthening its presence. "A lot of our competitors are establishing here, so it looks like Ireland is a smart place to play. "Historically, we came here for the favourable tax breaks, the strong links to America and the labour force - young, eager, hungry and smart. All of these appear to be true, and it's largely to the credit of the IDA."
Novell plans to conduct more of its software engineering testing, research and development in Ireland. Mr Schmidt says he inherited the decision to expand in Ireland after he took over the ailing company in April, 1997. The company recently reported net income of $19 million for its second fiscal quarter of 1998, which compares poorly with profits of $338 million in 1995.
Poor innovation, marketing and inventory organisation under the then chief executive officer and president Mr Robert Frankenberg caused Novell's fortunes to turn.
Since joining the company, Mr Schmidt has shed over 1,000 jobs worldwide and completely overhauled the management structure. Now industry analysts are welcoming a return to form at Novell.
Novell Ireland's manufacturing base supplies over 30 per cent of Novell's world market to Europe, the Far East and Australasia. The increased commitment to Ireland will involve more software testing and localisation initially, which, Mr Schmidt, says represents a "reasonable expansion of jobs". Eventually he expects all of the European research and development, and back office functions will operate out of Dublin, while sales systems will remain local to each country.
Novell's fortunes recently took an upward turn after it recorded a $12 million increase in net income to $19 million over the first two fiscal quarters of 1998. This contrasts well with its 1997 yearend income of just $7 million. Mr Schmidt now believes Ireland will be central to further growth at Novell.
"The vote we are making here is a vote that the current positive climate will continue, and our Irish operations will continue to grow."
