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Can Novell's horse win the derby?

By   |  August 18, 2006

Start out in the dirty, quiet city of Salt Lake and take a long, slow drive through pine-coated mountains into the middle of nowhere. You’ll finally reach Provo, Utah. It’s a hop, skip and bunny jump from Robert Redford’s famous Sundance ski resort, site of the alternative film festival, where quaint brooks run down the hill past luxurious accommodation for the rich and famous.

Orem itself has three notable features: a steakhouse that serves the largest portions of food known to man; a university that churns out graduates to work at Novell; and Novell itself. The last time I was there was way back in 1998, when Netware 5 was unveiled. Eric Schmidt (now Google’s boss) was in charge, Netware ran a staggering number of networks, the dot-com boom was underway. On the surface, things looked bright for Novell.

Looking a little deeper, Novell had made some bad purchasing decisions a few years before. It couldn’t turn its acquisition of Unix Systems Laboratories from AT&T and WordPerfect and QuatroPro from Borland into anything particularly useful, selling Unix to SCO and its Borland prizes to Corel by 1996. Around the same time, it sold a Bell Labs product to BEA – Tuxedo – just before the middleware stack went critical, with banks buying it like hotcakes.

Netware 5 marked Novell’s move away from IPX to the IP protocol, as well as the introduction of Novell Directory Services (NDS), but business just wasn’t the same as the massive run it made with Netware 3. It wasn’t that Netware 5 was bad – it’s just that it wasn’t good enough for a very competitive and fast-changing market. It wasn’t good enough to reach the massive profits it had once known. And it certainly wasn’t enough to compete with Microsoft’s Windows 2000 two years later, which managed to sew the market up in a massive marketing blitz, combined with a very good technology story.

Microsoft managed to capture the hearts of developers of the time, and that was the final killing blow – Netware just wasn’t getting the applications and services that third parties were throwing at Microsoft. In what is now known as the Application Wars, Novell got very bloodied.

Novell reacted as it always reacts, showing Schmidt the door and inviting Jack Messman to the Novell CEO chair of doom. It tried to become a consulting firm with the purchase of Cambridge Technology Partners, but the move failed to transform the company from its techie roots. It formed a think-tank and moved its brightest stars from around the world to Novell HQ, where they sat and pondered the Big Question: How do we get back to the heady days of 1990?

The think tank’s answer was Linux. The company purchased Ximian and then Suse, and the company-wide mission was to turn the very large, ungainly mass of Novell around and reinvent itself.

While the move may have been seen as reactionary, there were few courses open to it. It’s groupware, Zenworks management system and Netware products were all playing in the small space still allowed for it by Microsoft – a gap Redmond could close on a whim. Without its own platform to call home, Novell was struggling to eke out an existence in the Microsoft-dominated world.

Since the purchase, Suse has failed to impress on Novell’s bottom line. Reading back through E10K reports proves what many of Novell’s competitors claim – that while the techies bought into the Linux concept, many of its salespeople still believed that Netware was its flagship product.

And then came Suse Linux Enterprise Desktop and Server 10. Eight years after my visit to Novell’s bible-belt home, the company finally has a product that gives it a chance in the biggest horse race of all time.

Already, there’s a decent success story – something that Novell has been missing for quite some time. WS Badcock is rolling SLED 10 out to all sales terminals in 320 stores, and is moving its management system onto SLES 10. The OS has been praised – even by me – for being a very strong competitor. While Jack Messman was also booted out just before its release, I think that if Suse does manage to turn the tide, he can be congratulated with the achievement.

It’s not all roses. Vista will be released eventually, and when it comes out, it could pull another Windows 2000 on Novell. Microsoft’s story is also pretty compelling right now – firstly there’s the massive weight behind Redmond, and secondly there’s the excellent front- to back-end integration its managed to get right over the last few years. Novell’s only hope is to follow its SLED and SLES 10 with a really stunning Open Enterprise Server, which will at least get it toe-to-toe with Redmond.

With the massive developer support for open source, Novell no longer has to concern itself with loosing the next Application War. It no longer needs to rely on developers to build apps and services just for it – it just needs developers to code for Linux, which they are doing.

Novell’s Cool Solutions initiative is testimony to Novell’s recognition of the importance of apps for its products. It no longer has to go it alone. While its forced independence over the last few years resulted in some great Novell product, it wasn’t a successful business model.

So now I believe Novell has a chance. I’m not going to be putting any money down just yet on this dark horse with great pedigree, but she’s out of the gate before Microsoft and making a pretty good run already.



2 Responses to “Can Novell's horse win the derby?”

  1. Clint GC
    August 18th, 2006 @ 12:00 am

    The author gets the history of Novell right, but doesn\’t get his geography right. Novell is in Provo, BYU is in Provo (I\’m assuming that\’s the University he was mentioning).

    I\’m not sure if Messman deserves any credit if Suse becomes a success for Novell. I think he was often too distant from what the company needed to make the transisition a success. Mr. Hovsepian is much mor proactive with partners and customers, and he has his sales force believing they can do the work.

  2. L Larson
    August 18th, 2006 @ 12:00 am

    Uh, check your facts. Novell is in Provo, not Orem. The \”university\” (BYU) is also in Provo. The Sundance Film Festival is in Park City, not at Sundance despite its name. The drive from SLC to Provo is hardly \”slow\” on I-15 at 65mph+. Novell\’s campus hardly qualifies as the \”middle of nowhere\” with most of the 1/2 million county residents concentrated in the non-stop suburban sprawl south of SLC.

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