Somewhere, Ray Noorda is laughing

Ray Noorda died earlier this month. He was 82. The news didn’t even register at CNN, where the big IT industry story was Google buying YouTube for US$1.65 billion in stock. I think Noorda would have laughed. Not the tragic Alzheimer’s-ridden shell that Noorda became in his last years, but the canny businessman who baffled plenty of deep-thinkers himself, and who knew the value of a twentysomething ideas.

Noorda was an electrical engineer who quit his job at General Electric to become a management consultant. He turned around several failing Silicon Valley companies as CEO.

When he was asked in 1982 by a failing computer maker to become its president, hardware-guy Noorda wasn’t much interested in the computers that Novell was trying to sell. What caught his eye was a skunk works software project for networking PCs, hammered together by a trio of kids in their twenties who weren’t even regular employees: Drew Major, Dale Neibaur and Kyle Powell.

Novell’s management didn’t get this whole networking idea. But Noorda took the job, bought a piece of the company and launched NetWare in 1983. He was 59.

Within a few years, NetWare dominated the PC networking market.

And even with Novell on top of its world, Noorda figured it couldn’t last. By the early 1990s, Microsoft was making headway in networking. Noorda bought WordPerfect and Borland’s Quattro Pro spreadsheet to compete with Microsoft Office, acquired the rights to Unix to give a next-generation NetWare a jump start and even launched a project to commercialize a new piece of software from another twentysomething: Linus Torvalds’ Linux.

Once again, Novell’s board didn’t get it. But this time, Novell wasn’t a failing little outfit; it was a big company with a lot to lose. The board pushed Noorda out as CEO in 1994. He was 70.

And he still wasn’t done.

For the next few years, Noorda poured his billion-dollar fortune into Utah-based startups, many of which used Linux. At one point, Noorda’s Canopy Group was the largest investor in Linux startups in the world. It was yet another contradiction: Noorda making money on free software.

Meanwhile, a visionless, rudderless Novell sold off Noorda’s baffling acquisitions and then drifted downward for almost a decade under a series of CEOs until the company finally came up with a new strategy — based on, yes, Linux.

One of those CEOs was Eric Schmidt. Yes, the Eric Schmidt who left Novell in 2001 to become CEO at Google, a company built by a pair of twentysomething with the idea that money could be found by searching the Internet. The Eric Schmidt who a few months ago bought an online word processor and spreadsheet so Google could compete with Microsoft Office. The Eric Schmidt who just shelled out $1.65 billion for YouTube — another set of twentysomething, another “How can they possibly make money?” idea.

It all sounds mighty familiar, doesn’t it?

No, the business deep-thinkers don’t get it. I admit, neither do I. But apparently Schmidt does. He has a plan. He sees how it can be done. And he doesn’t mind baffling the rest of us.

And somewhere, Ray Noorda is laughing.

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–Hayes is Computerworld (U.S.)’s senior news columnist. Contact him at [email protected].

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