On November 4, Novell announced it had reached an agreement with German-based SUSE Linux AG to purchase the company for $210 million. This announcement followed Novell's recent purchase of Boston-based Ximian Inc. in August of this year. Ximian was a major developer supporting the GNOME project to create a Linux-based desktop. Ximian also sells a product called Mono, an environment that allows applications developed under Microsoft's .NET to run on Linux and Unix.
Subsequently, IBM announced it would invest $50 million into Novell, in support of its efforts to modernize.
All this may sound like a renaissance for Novell, but if past management mistakes are a measure of Novell's prowess as an operating systems provider, all I can say is "Thank God they didn't buy Red Hat!"
Thank God They Didn't Buy Red Hat
Novell, as a company, seems to have spent the last 10 years watching its market share in network operating systems drop, on average, 10% yearly as Windows NT surged forward. Today, it's estimated that Novell NetWare installations have fallen to only 7% of installed networks, down from 85% during its heyday in the 1980s. Novell's mismanagement of this community has moved it from position number 1 in technology to position 3 or 4. Its only excuse has been to complain that it is the victim of an insidious plot by Microsoft.
And, of course, Novell was a victim, but it was long ago time Novell got over it! The truth was that Microsoft saw Novell's greatest weaknesses: a truly uninspired user interface, a mess of administration complexity, and a proclivity for forgettable acronyms. No wonder it moved in for the customer kill! One comparative look between Windows NT and a NetWare administrator's interface, and the winner was easy to discern. Windows NT was good enough, it was getting better, and it was a heck of a lot easier to use! NetWare, by comparison, was NoWhere!
Lost Horizons, Lost Opportunities, and a History of Missteps
It didn't start out that way, and it didn't have to end that way. When Novell invented the Internet Packet eXchange (IPX) and Sequenced Packet eXchange (SPX) network protocols, it ushered in the age of LANs and networked PCs. And, like many tech organizations that took off in the 1980s, Novell got a leg up from Xerox.
In the late 1970s, the Xerox Corporation developed and published an open standard called the Xerox Network Specification (XNS). XNS was a group of protocols engineered for general-purpose internetworking, with a special emphasis on a new concept called "local area networks." XNS used two primary networking protocols: the Internet Datagram Protocol (IDP), which provided an unreliable but connectionless medium for sending datagrams from one host to another, and the Sequenced Packet Protocol (SPP), which was an enhanced form of IDP that was, by comparison, explicitly connection-based and substantially more reliable.
Novell studied the Xerox plans and then based its protocol upon the XNS suite, making small modifications to IDP and SPP. It also added new protocols like NetWare Core Protocol (NPC) for file and print sharing and Service Advertisement Protocol (SAP) to enable hosts to communicate service profiles.
This kernel of technology propelled the creation of Novell NetWare, a server-based networking system that connected the burgeoning population of corporate PCs. It provided an inexpensive means to share expensive laser printers and offered a quick-and-dirty file sharing system to allow the rapid distribution of the legions of Lotus 123 spreadsheets that were propagating in customers' PCs. Soon the capabilities of a NetWare network allowed the first PC-based databases to start promulgating in corporate offices. And other "NetWare-aware" applications began to offer some new productivity tools to users, most built using inexpensive compilers like Borland's Pascal compiler. The word processing program called WordPerfect transformed how secretarial staffs created and transmitted memorandum. Programs like Lotus Notes and Lotus Agenda--as well as cheaper knockoffs of spreadsheet programs like Quattro Pro--turned NetWare networks into cauldrons of productivity. By the end of the 1980s, a healthy community of application program providers was building and servicing suites of applications designed for a very large community of happy Novell NetWare users.
Microsoft Did IT Better
Unfortunately, this was all ended when Microsoft released Windows 3.1 and, soon afterward, Windows NT. The advantages of Microsoft's GUI--a combined knockoff of Apple's Macintosh GUI and IBM's OS/2 GUI--made the whole concept of a CRT-based user interface completely obsolete. Users could see it was better, easier, and more productive. Furthermore, with Microsoft's Windows GUI and APIs completely under its control, it dealt all the cards in the competitive game of user-aware LANs. There was little Novell could do, unless it chose to take on Microsoft by creating its own PC user operating system and its own suite of user-based application suites. But by the time Novell management realized what was happening, it was too late. Microsoft had won the user-interface battle, and along with it, the application suites and the underlying network itself.
Novell did belatedly attempt to respond to Microsoft's competitive challenge, all the while claiming that Microsoft had an unfair advantage in user application software. How did it respond? By eating its young!
How to Eat Your Children
In a series of purchases in 1994, Novell acquired Borland International's Quattro Pro spreadsheet and database business and the WordPerfect word processing suite. It also purchased the graphical design application suite called Corel. Its logic was to buy its customer loyalty through the application suite.
But then, step by step, Novell destroyed the customer base for these once-vital products. Its release of WordPerfect 6.0 and 7.0 were perhaps the worse implementations of a Windows GUI ever engineered. Its post-purchase releases for Quattro Pro were deeply flawed and bug-ridden. Its Corel applications struggled and faltered with larger, more-advanced memory models.
So, instead of fostering growth of new applications within its platform marketplace, Novell consumed its application developer community, enfolded them into its bloated bureaucracy, isolated its user community, and neglected the technology advancements that were occurring elsewhere in the business world.
In another interesting management move, it purchased the ownership of the original SCO Group UNIX operating system distribution. It subsequently did absolutely nothing with this valuable resource of source code, and when sales of SCO UNIX faltered, it sold the rights to a company called Caldera. (Caldera ultimately renamed itself back to SCO Group and is suing IBM for $3 billion for intellectual property infringements of this same UNIX source code.)
If You Can't Compete, Kill the Competition
When these purchasing strategies continued to fail at halting the demise of NetWare user base, Novell was faced with a grim decision: It could redirect its resources toward innovation, or it could go to court to "level the playing field." In the mid-1990s, Novell decided to join a series of lawsuits against Microsoft and became one of the loudest voices calling for the antitrust break up of the software giant. If you can't beat them in the marketplace, why not kill them in the courts?
This is the now the organization that has, with its remaining capital, bought out SUSE Linux, an innovative group of developers dedicated to furthering the acceptance of Linux in the business community.
Many old NetWare customers are cheering! "At last!" they are shouting. "We'll have a migration path! At last! We'll have a future!"
But, considering Novell's past history of corporate buyouts, poor user support, and mismanaged mergers, such a move might make one wonder: If Novell owns SUSE, can the death of a truly standardized Linux be far behind?
Harsh Criticism for the Sake of Linux Hope
But I'll forgive Novell all its past sins if it can keep SUSE alive and well and competitive and open.
We desperately need an open Linux to succeed, to prevent the further balkanization of the desktop. We need it to open the way to new applications, new productivity, new open standards, and new cost savings.
Microsoft is good, but it's only good in comparison to what came before it. That was Novell NetWare--a good solution for its time, but that time has come and gone. Linux today represents the future hope that IT is desperately counting upon to manage the complex networks of PCs in a cost-effective manner. It's the hope for less-expensive application suites and stable and secure e-business.
NetWare is the past. Windows is today. Linux is some kind of future that is still unfolding before us, like the movie promotional advertisements that pepper the airwaves.
Red Hat Linux is one of those movies. SUSE is another. The trailers for Linux look good. The cast of characters is shaping up. But I'm not yet convinced that I'll appreciate the Novell-ization.
Thomas M. Stockwell is Editor in Chief of MC Press, LP.