It’s the end of Novell as we know it

When a company like Novell has sunk as far as it has, the first question to be resolved is whether the organization in question could have avoided its fate. In this case the answer is not so simple.

Novell’s leadership team over the years was not afraid of rolling the dice, even when the risks were extraordinarily high. It was this tenacity for reinvention and new directions that kept it a player within enterprise IT for so long. Its purchase on Monday by Attachmate for US$2 billion seems like a sad coda to more than two decades’ worth of strategic planning, and obscures its peak years as a force to be reckoned with among other established vendors. There are probably a lot of people watching Google today who don’t realize that Eric Schmidt, its CEO, was once pilloried by Novell users and shareholders alike for his management of Novell in the 1990s. Last time I checked, major Canadian organizations including the CBC were still using Groupwise, its e-mail platform. Its move into open source was, at the time, as pioneering as it was shocking.
Like a lot of companies, Novell suffered from having made its name with a product, the network operating system Netware, that proved almost too successful for its manufacturer’s own good. I remember that by the time NetWare 6.0 came out, and executives were boasting about its file and print capabilities, most customers we talked to were still standardized on 5.5, a fixation that rivals Windows XP in migration holdouts. In most other respects, too, Novell seemed to have stalled, its major acquisition of Cambridge Technology Partners failing to make it a serious contender in what was then emerging as a war for IT services business.

The acquisition of Suse Linux was probably its best chance at changing all that. This deal gave Novell the potential to put the experience and reputation of a longtime OEM behind a popular distribution of the open source OS at a time when rivals like Red Hat Software were still earning the trust of nervous corporate customers. Then, in a mind-blowingly bizarre turn, Novell formed an alliance with Microsoft Corp. in 2006 that to develop “para-virtualization” allowing users to run Linux application workloads on top of Windows, and Web services management of heterogeneous application environments. There was also talk of greater interoperability between Novell's eDirectory and Microsoft's Active Directory, as well as “translators” between MS Office and OpenOffice, but what most people focused on was Microsoft helping sell Linux through Novell, with “certificates” that implied Microsoft only considered those buying through this partnership to be true open source customers, and not, um, pirates. The overall impression was that Novell did not really believe open source was legal or viable without Microsoft’s backing. (I should add that Novell later said open source sales soared hundreds of per cent, but that’s not hard when you’re basically starting from nothing.)

There were other problems, of course, including the ouster of energizing CEO Jack Messman and the promotion of the lackluster Ron Hovsepian. More critical was the company’s insistence on remaining in so many product areas, rather than paring down and growing through increased focus. Did it make a lot of sense, as Gmail came to the fore, to keep on investing in office messaging? Did the world really need that alternative to Microsoft SharePoint which Novell couldn’t even bother to give a credible brand name? Perhaps the biggest mistake was the failure to recognize that one area of Novell’s business, its ZenWorks management portfolio, had the good reputation and decent sales to be a good spin-off business unencumbered by its parent’s challenges.

I don’t know what Attachmate will do with Novell, but it can’t do much worse than what Novell has done to itself.  

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