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How Novell peaked, then threw it all away in a year

And a bunch of Mormons made the biggest tech buy you've never heard of

Netware 4.0 Anniversary One grey morning in the mid 1990s, your writer was bundled on a plane and flown to somewhere in Germany - it might have been Dusseldorf - to attend the Olympics. Not those Olympics. The inaugural Certified NetWare Engineer Olympics.

Marketing for tech companies is tricky, and all the harder in the '90s, when sci-fi visions of computing were much further removed from the often still text-based beige boxed reality than they are today. So you can’t blame onetime networking giant Novell for attempting to take its wildly successful Certified NetWare Engineer (CNE) programme and try and give it some heroic gloss.

So, Novell pulled in the best and brightest of its CNEs, getting them to battle through regional competitions to gain the honour of competing at European level.

It's hard to describe the cold-sweat excitement of staring through a window into a computer lab where a bunch of network engineers are working their way through arcane NetWare questions in the hope of winning... well, we weren't totally sure.

After watching them for a bit we were whisked back to the airport, without even getting the chance to watch them mount the podium, or take a victory lap around the server room.

Other companies at the peak of their power would have built a glistening new HQ, or erected an enormous flagpole in the courtyard.... perhaps even filmed an absurd companywide rap.

The very idea of a CNE Olympics demonstrated that the neworking firm recognised the importance of its certified techies, which suggested that Novell had already jumped the shark, and the only question was just how painful splashdown was going to be.

Which was a shame, in a way. Novell had scrambled its way to the top of the heap with a product that did pretty much what it had set out to do, with a pretty solid training and certification programme and a fully engaged channel to back them up. By 1994 it pretty much dominated PC networking, and was at the peak of its power.

And the team there apparently managed to do this without being complete and utter arses.

One PR who worked with them told us that it was a truly mad time, with the product selling like topsy. The usual situation when companies grow like this is that execs assume it is their own godlike genius that has created the situation, and begin behaving accordingly.

But, our PR friend tells us of the peak Novell team, at least in the UK: “They were just really nice people.” Good to work with, enthusiastic. Trustworthy even.

Once at college, I tried a Red-Box experience

And we’re sure this was not just because it was a Utah-based company, reputedly staffed with lots of hard-selling but soft-drinking Mormons.

Though tough-minded in business, in other ways the company did appear a little guileless.

I remember the Networks Show in the mid-1990s when Novell’s stand had, as its centrepiece, "The Red-Box Experience".

Unfortunately, flamboyant comedian Julian Clary had attracted infamy shortly before, after declaring on live TV his intention to give the-then UK Chancellor Norman Lamont a Red Box experience of his own. We were a little fuzzy on the details of Clary’s idea of a red-box experience, but we sure as hell didn’t want to volunteer to find out by entering Novell’s Birmingham-based version.

One distribution marketeer we spoke to referred to the complete mayhem of pushing Novell back then - in the nicest way. “I have vivid memories of opening the warehouse doors as the next container load of red boxes rolled up. There was no talk of sales forecasts, just take the next commitment whether you wanted it or not... scary!”

These were the days of shrinkwrapped software of course. It really did matter that you had the right boxes on your shelves at the right time. Or not. There were often tales of channel-stuffing*, as Novell’s sales types looked to secure their quarterly bonuses. Though given that disties would be creaming back a stack of marketing funds for buying those boxes (it was the '90s), as long as the market for Novell’s vision of client server kept on growing, it was all going to be OK in the end. Wasn’t it?

And then there were the other value-add money-making opportunities. Training, certification, testing. Not to mention installation and support. Disties, as well as training specialists, piled into all of the above. Certified NetWare Engineer not doing it for you? Perhaps you're brave enough to try out for Master Certified NetWare Engineer? Will you or your employer be paying? Who cares. Credit card details here please. Please don't hold up the queue.

And of course, there was no point installing NetWare and going client server without cabling. For about six months around 1992 it seemed that every tech company and his dog was setting up a cabling division. Just running a few meters of Cat 5 around an office between client PCs and that mysterious box called the server was somehow seen as the cutting edge in value add for product-focused companies.

Hardly anyone in business had heard of the internet, and just the idea of hitting a button and a document coming out of a printer in another room was something akin to magic for many.

[A bit of context... in the '80s I remember a mate who’d just started work explaining to us how his company had a machine which you put a picture into which could make the same picture pop out of another machine somewhere else in the world. We didn’t believe him of course, as that sort of thing was obviously the province of governments and Bond villains.]

But even as the world went client/server mad, Novell had already sowed the seeds of its own demise, albeit with plenty of help from Microsoft, which had declared its intention to tightly integrate networking into its own platform in the shape of Windows NT.

Faced with the inevitability of the ultra-aggressive ‘90s incarnation of Microsoft targeting Novell’s core networking market, long-time Novell chief executive Ray Noorda went on the attack by attempting to invade Microsoft’s home ground: the desktop. In 1993, Novell bought Unix Systems Labs from AT&T, giving it the foundation for a full operating system stack that could compete with Microsoft’s expansion from its Windows-on-top-of-DOS homeland. Noorda’s goal was a SuperNOS.

The biggest acquisition you've never heard of

Novell then leapt beyond the operating system in 1994, by gobbling up WordPerfect, a fellow Utah-based, and even more Mormon company. WordPerfect, at the time, was already fumbling the transition to Windows from DOS, where it had previously dominated the word processor market.

Novell also agreed to take on Quattro Pro, Borland's spreadsheet app, meaning it would have, arguably, a full set of applications, collaboration products, desktop and operating systems with which to take on Microsoft.

The $1.4bn price tag on WordPerfect back in '94 was widely seen as the biggest ever software deal ever at the time. As a comparison, eBay’s Paypal purchase in 2002 was worth $1.5bn, while Facebook’s Instagram buy had a $1bn price tag. In fact, the only reason we can see that the deal doesn’t appear in lists of tech’s biggest acquisitions is that it happened in the pre-web era - meaning time-stretched writers who weren’t there can’t easily pull up the details.

On the other hand, perhaps it’s because the deal, along with the whole assault on Microsoft, was a failure which many of the parties concerned have wiped off their corporate CVs.

As said, WordPerfect had already screwed up the jump onto Windows. More ominously, Noorda, who had steered the company through the ‘80s and into its dominant position in the 1990s, was reputedly already showing signs of Alzheimer’s disease.

One journalist we know remembers seeing Noorda take a mighty pause at a presentation in 1993, before telling the audience he’d just had a flashback and thought he was back at General Electric. Noorda relinquished the Novell CEO-ship during Comdex, Las Vegas, in 1995, and we remember the collective sucking in of breath around the press room when the news came through.

Later that night I was standing behind Bill Gates in the queue for beer at the annual Comdex Micrografx Chilli Cookoff, and it seemed that even the Budweiser-sipping Microsoft boss had been taken by surprise and was still chewing over what Noorda’s departure meant for both Novell and Microsoft’s respective futures.

Noorda’s replacement, Robert Frankenberg, shepherded through the WordPerfect deal, although he himself was gone before long, inaugurating a succession of short-lived CEOs, including an upstart called Eric Schmidt.

Each turn of the revolving door seemed to see another chunk of products get shot out of the company, with the office suite being hastily offloaded to Corel in 1996. The UNIX business had been sold to SCO as 1995 drew to a close.

Meanwhile Microsoft started getting its act together on the network - comparatively speaking. As one Reg contributor told us, everything was “difficult” in NetWare, while the MS-backed LANManager meant: “You didn’t have to fight the shit every day.”

Meanwhile, something called the internet suddenly got very big, and Novell and its office-bound client server architecture started to appear, well, if not proprietary, certainly rather nichey and old-fashioned.

Novell and its succession of CEOs just couldn’t keep pace, and despite forays into Web tools and Linux, as well as services, the company was on its way to irrelevance.

In the Schmidt and beyond

Revenues peaked at $2bn in the year to 28 October, 1995, boosted by WordPerfect’s application revenues, only to slump to $1.3bn the following year, and $1bn the next, partly because of the offloading of WordPerfect to Corel. Novell stumbled through further CEOs, forays into Linux, into services, and into an awful lot of litigation.

The remains of Novell were taken over by Attachmate a couple of years ago, which was something of an irony - a maker of mainframe connectivity tools taking over the company that had done so much to break the dominance of old-fashioned mainframe-driven computing and democratise networking.

The talented or just plain lucky execs that had driven and benefited from Novell’s early to mid-'90s peak set off for other companies, whether through sell-offs and plain old ship-jumping. Even that Eric Schmidt guy landed a job, albeit with some Silicon Valley startup no one had heard of. Likewise, the resellers and disties who had driven, or at least surfed, the red wave that had crashed through the channel moved on to other things, other technologies, other industries altogether.

But, at least as far as we’re aware, there never was a follow-up CNE Olympics. Which means somewhere out there is someone outnumbered by British-born tennis champions: the one and only Gold-medal-wearing Netware Olympian. ®

* Forcing extra product into the distribution channel to boost sales figures - more inventory than the channel is actually capable of selling on to the end user.


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