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Spurred by the looming shadow of Microsoft Corp., Novell is aggressively marketing new networking software for small businesses.

A direct mail campaign from Miller/Kadanoff Promotional Marketing, San Francisco, started going out to Novell users last week. Ads for Personal NetWare break in mid-February in both computer trade publications and small business books, via Foote, Cone & Belding. The ad campaign's first phase runs through May, with an estimated $1 million budget.

"We want to get the entry-level person so they can grow with us as they grow," said Stephanie Workman, marketing communications manager for Novell's desktop division.

Novell, with more than a 50% market share in units and sales for personal computer networking software, hopes to wean expanding businesses from Microsoft, a major business software vendor that is moving into networking.

"Microsoft is trying to encroach," Ms. Workman said. "We decided to get the early users."

Novell's aim is to graduate small users that outgrow Personal NetWare to its core product, NetWare, dubbed "big NetWare" by insiders. The market for smaller networks is growing at about 40% a year.

The new software began shipping this month to both Novell's traditional resellers and computer retailers, such as CompUSA and Egghead Software, , a channel Novell wants to expand.

"The more sophisticated the customers, the more often they go to retail," said Marcia Kadanoff, exec VP of Miller/Kadanoff.

The first direct mail effort for Personal NetWare recruited computer retailers and Novell's regular resellers, pitching the growth potential in the small business market.

Now, direct mail goes to current Novell users of both NetWare Lite, an older entry-level networking product that doesn't upgrade easily to NetWare, and NetWare itself.

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