NOVELL to Restructure Around Linux, Idenbreasty

Au79

It looks like Novell may have learned their lesson at last.

Keep in mind that Novell purchased the rights to Unix back in 1993(?) under the command of Ray Noorda. At that time, Noorda was looking to compete with Microsoft directly on the desktop. Microsoft had released Windows for Workgroups and was promoting their own SMB based network protocols as well as Windows based servers. Noorda correctly guessed that Microsoft intended to cut Novell completely out of the market by putting file and print server functions into the soon to be released Windows NT. In fact, Microsoft was targeting NetWare, Lotus Notes, and BBS functions with NT Server, and was planning a proprietary version of what we now know as MSN to compete with AOL, Prodigy, and Compuserve.

While Ray Noorda was in China, some Microsoft executives who "happened to be in town" (Provo Utah?), just "dropped in" and met with some of Novell's board of directors. According to one of those in that meeting, Microsoft offered to halt production of Windows NT Server if Novell would halt development of UnixWare workstation software.

Microsoft knew that Noorda would not approve, but they also knew that Noorda couldn't be reached for several hours, so they limited the offer. They told the board that if they didn't sign the agreement and terminate all of those working on the workstation project, that the offer would be revoked and Microsoft would target the NetWare market directly.

Novell accepted the offer without consulting Noorda. The Unix community was resisting IPX-SPX and wanted TCP-IP instead. Novell directors were so focused on protecting the NetWare franchise that they missed the bigger picture.

When Noorda returned and found out about the contract, he retaliated by pretty much giving away Unix. He released the code required to make BSD work, under the BSD license. He released the trademark to X-Open. He also released a substantial portion of the AT&T code under the BSD license. Then he left the company.

Once he left the company, he rounded up the Novell Workstation team and formed a new company called Caldera. He also created an incubator company called the Canopy Group, which formed a number of companies, including TrollTech, who released a product called KDE.

Of course, Microsoft never intended to keep their side of the bargain, and when Windows NT was finally released it planted as a Workstation. Had Novell stayed with their original plans, they would have captured a significant portion of the desktop market with a version of Unix they were willing to sell for about $200 less than Windows NT and which ran on conventional VLB, EISA, and MicroChannel hardware as well as a generic PCI bus.

Caldera and TrollTech continued to grow and both companies developed products which could have been Novell's, but were instead being offered as part of Linux. Ironically, the core functions of NetWare were also available for Linux and had been ported by students at a University in Utah.

Caldera continued to thrive and was soon capturing contracts for most of the major franchise operations, including McDonalds, Burger King, Pizza Hut, Taco Bell, and most of the other Pepsico restaurant franchises. Caldera Linux had all of the features of SCO Unix, but was more reliable and had been evolving to offer better graphics and remote management support.

Caldera grew so fast that it eventually had to purchase the SCO support and consulting organization. Caldera deliberately did not purchase the SCO operation itself because they did not want Microsoft to get out of a contract that prevented them from selling their own versions of UNIX.

Unfortunately, the capital required to purchase SCO involved selling shares of the company which were snapped up by several holding companies and shell companies controlled to various degrees, by Microsoft executives. They fired Ransom Love and installed Daryl McBride. McBride made an offer for the SCO Unix itself, and the software company, now renamed Tarantella, sold him the "rights" which by now were worthless, other than the contract which kept Microsoft from selling UNIX.

McBride filed a lawsuit against IBM, attempting to shut down Linux by claiming that they owned "something" in Linux. They were hoping for a quick and cheap settlement which would acknowledge SCO's control of Linux. Instead IBM fought back, and demanded that SCO prove it's claims. To fund the protracted lawsuit, McBride sold Microsoft unlimited nonexclusive rights to Unix, and in doing so, released Microsoft from their restriction of not being able to sell Unix or a variant of Unix (Linux). It's quite likely that Vista will have a great deal of Unix source code included, along with many Unix libraries. Microsoft will then sell the "Unix Services for Vista" for an extra $100 or more per machine, witholding this code from the OEMs.

When Novell purchased SuSE, it was beginning to look like a replay of 1994 when:

Chris Stone, former vice chairman of the office of the CEO and the champion behind Novell's purchase of German-based Linux distribution SUSE, resigned abruptly in November 2004. In March 2005, Novell CTO Alan Nugent resigned from the company as well, to take a job at Computer buttociates (Quote, Chart).

The irony is that Novell found that SuSE was pretty much selling itself. In Europe, SuSE was generating more revenue than NetWare, and growing at a rate far greater than anything Novell had ever experienced before. In many markets, where SuSE had already established itself as a viable solution to business problems, the growth rate in revenue was exceeding 40%-year.

Meanwhile, the NetWare market has been dwindling. The customers who still use Netware aren't as eager to upgrade. When Netware functions were offered on Linux, many existing NetWare customers expressed a great deal of interest. Soon, Novell was finding that customers where very interested in SuSE Enterprise Server, and were also interested in a number of groupware products offered by Novell.

The New COO, Ron Hovsepian, has an interesting background too.

NOV. 1 5:18 P.M. ET Network management software maker Novell Inc. said Tuesday it has promoted Ron Hovsepian, executive vice president and president of global field operations, to the newly created position of president and chief operating officer.

Hovsepian, 44, will be in charge of worldwide product development, marketing and field operations, including sales, consulting and technical services.

Hovsepian joined Novell in 2003 as president of North America, after working at IBM Corp. for 17 years.

Ron is a venture partner at Internet Capital Group, formerly serving as a managing director of Operations. Prior to joining ICG, Ron spent 16 years at IBM Corporation in a variety of executive and general management roles. Most recently, he was IBM's vice president of business development for the retail and consumer packaged goods industry where he led IBM's entry into the B2B exchange marketplace.

Ron also served on ICG's advisory board and guided IBM's investment in ICG. Previously, he was IBM's worldwide general manager for retail and consumer packaged goods solutions, where he led all aspects of strategy, marketing, sales, product management, and business development.

If this means that Novell will be going after the workstation market as well as the server market, and if this means that Novell is going to focus on supporting Linux and providing commercial grade solutinos for Linux, this is a very good thing. It's quite likely that such a plan will yield some excellent results.

Novell may have figured out that it has a very powerful and respected franchise in SuSE and that they need to encourage and foster that franchise. I must admit I was very impressed by the commercial retail workstation version of Novell's SUSE Linux 10.0 The box says "Everything you need to get started with Linux", and this is a pretty accurate statement. They had all of the popular tools, but they also had some outstanding business, development, project management, and WORKstation tools.

It did figure out my WiFi card, but I haven't figured out how to "sniff out" a connection yet. I know that this is an application which is distinct from the driver, and I remember using it on a previous version of Linux, but I've only been using this particular version for about 2 days now. I installed it on an R-40 Thinkpad and there wasn't anything it couldn't figure out.

This site is also very interesting. Even though it's a signature line, it also provides an excellent history of Microsoft. Interesting reading and good reference material.

Rex Ballard