Unix Systems Group

Novell, Inc. was an American software and services company headquartered in Provo, Utah, that existed from 1980 until 2014. Its most significant product was the multi-platform network operating system known as Novell NetWare.

Under the leadership of chief executive Ray Noorda, NetWare became the dominant form of personal computer networking during the second half of the 1980s and first half of the 1990s. At its high point, NetWare had a 63 percent share of the market for network operating systems and by the early 1990s there were over half a million NetWare-based networks installed worldwide encompassing more than 50 million users. Novell technology contributed to the emergence of local area networks, which displaced the dominant mainframe computing model and changed computing worldwide. Novell was the second-largest maker of software for personal computers, trailing only Microsoft Corporation, and became instrumental in making Utah Valley a focus for technology and software development.

During the early to mid-1990s, Noorda attempted to compete directly with Microsoft by acquiring Digital Research, Unix System Laboratories, WordPerfect, and the Quattro Pro division of Borland. These moves did not work out, due to new technologies not fitting well with Novell's existing user base or to being too late to compete with equivalent Microsoft products, and NetWare began losing market share once Microsoft bundled network services with the Windows NT operating system and its successors. Despite new products such as Novell Directory Services and GroupWise, Novell entered a long period of decline. Eventually Novell acquired SUSE Linux and attempted to refocus its technology base. Despite building or acquiring several new kinds of products, Novell failed to find consistent success and never regained its past dominance.

The company was an independent corporate entity until it was acquired as a wholly owned subsidiary by The Attachmate Group in 2011, which in turn was acquired in 2014 by Micro Focus International. Novell products and technologies are now integrated within various Micro Focus divisions.

History

Origins as a hardware company

The company began as Novell Data Systems Inc. (NDSI), a computer systems company located in Orem, Utah that intended to manufacture and market small business computers, computer terminals, and other peripherals. It was co-founded by George Canova and Jack Davis, two experienced computer industry executives. While some later sources place the creation of Novell Data Systems as having happened in 1979, more contemporaneous sources are in accordance with it happening in August 1980. Canova became president of the new company and Davis was in charge of sales and marketing. The suggestion for the company's name came from Canova's wife, who thought it meant "new" in French (in fact the French word is either the masculine ''nouveau'' or the feminine ''nouvelle''). While future Brigham Young University professor and Eyring Research Institute (ERI) figure Dennis Fairclough was not a founder of Novell Data Systems, he did work with the company from its early days.

A funding proposal was brought to Pete Musser, chairman of the board of Safeguard Scientifics, Inc., a Pennsylvania-based, technology-focused venture capital firm that was an offshoot of the older Safeguard Business Systems. Safeguard Scientifics believed that a new computer systems company could help the Business Systems company automate their accounting systems. Accordingly, Safeguard Scientifics provided over $2 million in seed funding, and they became the majority owner of Novell Data Systems. Canova also owned a significant portion of the new company.

Novell Data Systems set up offices in a former carpet warehouse located in an obscure industrial park down the road from the largely vacant Geneva Steel works. By November 1980, they were placing display ads in the classifieds pages of Utah Valley newspapers, seeking to hire hardware and software engineers and other staff.

At first the company began to grow rapidly. By mid-1981 the company was selling two products, the Nexus Series microcomputer and the Image 800 dot matrix printer. Orders began shipping during the second half of 1981. The computer product was based on the Zilog Z80 microprocessor and the CP/M operating system.

The company subsequently did not do well. The microcomputer produced by the company was late to an increasingly crowded market and was noncompetitive in terms of performance when it did arrive. According to one paraphrase of a Value Line report on Novell Data Systems as a whole during this period, their "revenue was minimal, but expenses were tremendous." Davis was fired from Novell Data Systems, a change that occurred in November 1981.

In order to compete on systems sales, Novell Data Systems planned a program to link more than one microcomputer to operate together. The current or former BYU students Drew Major, Dale Neibaur and Kyle Powell, known as the SuperSet Software group, were hired to this task and began consulting for Novell during 1981.

During the first calendar quarter of 1982, heavy costs continued to be incurred at Novell Data Systems, which resulted in management shuffles, organizational consolidations, and a significant layoff. Canova was fired and Jack Messman, representing Safeguard Scientifics, was named president. The poor performance of Novell Data Systems resulted in losses being announced in April 1982 for the publicly-held Safeguard Scientifics and put pressure on that company's stock price. However, by this point the computer-linking work that the SuperSet group had produced was drawing considerable interest and Novell Data Systems was describing themselves as a company that made not just stand-alone microcomputers but also products for local area networking (LAN). The dual emphasis on hardware and software products continued for several months but continued to have troubled results, and in July 1982 another round of layoffs took place which resulted in the employee count being reduced from 50 people to 30.

At that time Safeguard reported that it would be writing down $3.4 million in losses due to Novell Data Systems' switch from being a hardware company to a software company. Throughout 1982 there were further management shuffles with other people being named president of the company. Major, Neibaur, and Powell continued to support Novell through their SuperSet Software group. As Major later said, "It was great that our hardware was so lousy because that gave us the idea that hardware wasn't really where the value was."

Two other important NDSI employees were strategist Craig Burton and communications specialist Judith Clarke. Despite its struggles, Novell Data Systems had a presence at the COMDEX show in Las Vegas in November 1982; a man named Ray Noorda saw it and become interested in the company's potential.

Rise to networking dominance

A new company

On January 25, 1983, the company was incorporated under the shortened name of Novell, Inc. In April 1983, the appointment of Noorda as president and CEO of Novell, Inc. was publicly announced. Noorda was a veteran executive of General Electric and the past CEO of several other companies and had garnered a reputation as a turn-around expert. Messman was chairman of the board and continued to represent the interests of Safeguard Scientifics, which was still majority owner in the new Novell.

The new Novell started with around 15 employees. Noorda emphasized that the file server product acquired from Novell Data Systems would be the heart of what the new Novell would be doing. Later that same year, the company introduced its most significant product, the multi-platform network operating system (NOS), Novell NetWare.

Funding for the new company was still an issue, and Musser contacted two Safeguard investors and brokers, Barry Rubenstein and Fred Dolan, who were with the Cleveland brokerage house Prescott, Ball and Turben, in these efforts. Rubenstein and Dolan eventually came up with the idea of a rights offering to Safeguard shareholders. Accordingly, in January 1985, Safeguard Scientifics made an initial offering of shares in Novell, Inc. to its own shareholders, at $2.50 a share. The sale brought Safeguard more than $5 million in cash, and Safeguard's ownership in Novell went from 51 percent down to 24 percent. Novell, Inc. began trading as an over-the-counter stock.

NetWare

The first Novell product was a proprietary hardware server based on the Motorola 68000 processor and using a star topology. This, with the network operating system (NOS) on it, was known as Novell S-Net, or ShareNet, and it achieved some visibility; by April 1983, advertisements were seen in trade publications for third-party software products which stated they were compatible with Novell ShareNet.

The company realized that making a proprietary solution in this sense was disadvantageous and looked instead to the IBM PC as an alternative platform. Now called NetWare, the network operating system was ported to run on an IBM PC XT with an Intel 8086 processor and supported centralized, multitasking file and print services. By March 1984, Novell was putting out announcements about third-party products that worked with Novell NetWare.

NetWare came on the computing scene just as the IBM PC was emerging as a market force and applications such as the VisiCalc spreadsheet for the Apple II were showing what microcomputers could do for businesses. There was an immediate demand for local area networking that could make files and printers available across many PCs. In addition, the advent of the PC caused organizational changes within companies and enterprises and allowed Novell to find entryways into individual departments or regional facilities rather than having to convince upper management of the value of networking. Thus, Novell's timing was spot on. As the ''New York Times'' subsequently wrote, "Novell, in one of those instances of serendipity and visionary thinking that are the stuff of personal computer legend, found itself in the right place at the right time."

Partly in consequence of its design of running at kernel level ring 0 without regard for separate or protected address spaces, and thus not having the properties of a general-purpose operating system, NetWare was known for being very fast in operation. This trend continued into 1987 with the Advanced NetWare/286 release, which was well received within the industry. NetWare also excelled with respect to computer security considerations, supporting user- and group-based roles and volume- and file-level access restrictions, thus making it attractive to systems administrators.

Novell based its network protocol on Xerox Network Systems (XNS), and created its own standards which it named Internetwork Packet Exchange (IPX) and Sequenced Packet Exchange (SPX). These protocols were based on a client–server model. File and print services ran on the NetWare Core Protocol (NCP) over IPX, as did Routing Information Protocol (RIP) and Service Advertising Protocol (SAP). All of these NetWare protocols mapped to various layers of the OSI model.

Starting in 1987, Novell began selling its own Ethernet-based network adapter cards. These included the 8-bit NE1000, and then in 1988, the 16-bit NE2000. They priced them lower than cards from competitors such as 3Com, whose card Novell had previously been distributing. By 1989, Novell's cards were being sold at a rate of 20,000 per month, aggressively expanding Novell's market presence. At that point, Novell transferred the NE1000/NE2000 business to Anthem Electronics, the firm that had actually been making them, but the cards remained branded as Novell products.

As author James Causey would later write, "NetWare deserves the lion's share of the credit for elevating PC-based local area networks from being cute toys to providing powerful, reliable, and serious network services. NetWare was the first Intel-based network operating system to provide a serious alternative to mainframe-based server networks, providing critical reliability and security features needed in the modern enterprise."

Novell acquired Kanwal Rekhi's company Excelan in 1989; Excelan manufactured smart Ethernet cards and commercialized the Internet protocol TCP/IP, solidifying Novell's presence in these areas. The acquisition combined Novell's $281 million in annual revenue with Excelan's $66 million. Rekhi became a high-ranking Novell executive, and played an influential strategic and managerial role with the company over the next several years. Excelan was based in San Jose, California, and they, along with a couple of prior Novell acquisitions, formed the basis for Novell's presence in Silicon Valley going forward.

NetWare 386

A key software introduction came in 1989 with the release of NetWare 386, also known as NetWare 3.0, which gave NetWare more modern architectural qualities, in conjunction with new capabilities in the Intel 386