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Novell

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Novell, Inc.
Company typePublic
IndustrySoftware and services
PredecessorNovell Data Systems Inc.
FoundedAugust 1980; 46 years ago (1980-08)
FounderGeorge Canova, Jack Davis
Defunct2014 (2014)
FateAcquired by The Attachmate Group in 2011; later part of Micro Focus International and OpenText
Headquarters
Provo
,
United States
Area served
Worldwide
Key people
Ray Noorda (CEO)
ProductsNetWare, Novell Directory Services, GroupWise, SUSE Linux
Number of employees
30 (mid-1982)
ParentThe Attachmate Group (2011–2014), Micro Focus International (2014–2023), OpenText (2023–present)

Novell, Inc. () was a U.S.-based software and service provider headquartered in Provo, Utah, active from 1980 until 2014. Its premier offering was the cross-platform network operating system NetWare, which significantly contributed to the expansion of local area networks by shifting computing paradigms away from centralized mainframes.

During the leadership of CEO Ray Noorda, NetWare achieved dominance in personal computer networking throughout the late 1980s and early 1990s, securing approximately 63% of the market. By the early 1990s, over 500,000 networks utilizing NetWare supported more than 50 million users globally. Novell became the second-largest producer of PC software after Microsoft Corporation and played a pivotal role in establishing Utah Valley as a prominent technology center.

In the early to mid-1990s, Noorda sought expansion through acquisitions such as Digital Research, Unix System Laboratories, WordPerfect, and Borland’s Quattro Pro. However, these acquisitions faced difficulties due to integration issues and intense competition from Microsoft’s network offerings bundled with Windows NT. Although innovations like Novell Directory Services and GroupWise were introduced, Novell's market presence diminished.

Subsequently, Novell acquired SUSE Linux and redirected its strategy toward open-source platforms but struggled to reclaim its previous market position. The company remained independent until it was purchased by The Attachmate Group in 2011. Attachmate was later acquired by Micro Focus International in 2014, which itself was taken over by OpenText in 2023. Today, Novell's products are incorporated within OpenText’s suite.

Beginnings as a hardware manufacturer

Originally established as Novell Data Systems Inc. (NDSI), this company operated out of Orem, Utah as a computer systems manufacturer targeting small business needs. Founded in August 1980 by seasoned professionals George Canova (president) and Jack Davis (sales and marketing), NDSI’s initial goal was to cater to the small business sector. The venture capital firm Safeguard Scientifics from Pennsylvania provided funding, becoming the majority shareholder after investing over $2 million, while Canova retained a substantial stake.

Operating from a modest location near Geneva Steel works, NDSI began recruiting hardware and software engineers by late 1980. By mid-1981, the company offered two products: the Nexus Series microcomputer (utilizing the Zilog Z80 processor with CP/M OS) and the Image 800 dot matrix printer. Despite rapid initial growth, the microcomputer entered an increasingly competitive market late and underperformed, leading to limited revenue alongside high costs. Consequently, Davis was dismissed in November 1981.

To stand out, NDSI aimed to network multiple microcomputers for cooperative functionality. The SuperSet Software team—comprising BYU alumni Drew Major, Dale Neibaur, and Kyle Powell—was engaged to develop this networking solution; they created the multiplayer game Snipes as a proof of concept.

Facing significant expenses, management changes occurred alongside layoffs in early 1982; Canova was succeeded by Jack Messman from Safeguard Scientifics as president. After witnessing Snipes running across various PCs, Messman recognized SuperSet’s networking technology potential. Despite ongoing losses impacting Safeguard’s stock value, NDSI shifted focus from hardware manufacturing toward local area network (LAN) software products. Staff numbers were reduced from 50 to 30 by mid-1982.

Safeguard took a $3.4 million write-down reflecting NDSI’s transition away from hardware toward software-centric solutions. Throughout 1982, leadership adjustments persisted while Major, Neibaur, and Powell continued supporting Novell’s evolving direction through SuperSet Software. Major later reflected that hardware shortcomings underscored software as the essential value proposition.

Among early key personnel were strategist Craig Burton and communications expert Judith Clarke. Despite obstacles, NDSI maintained a presence at the November 1982 COMDEX trade show in Las Vegas, where Ray Noorda encountered the company and identified its significant growth potential within networking technology.

Formation of a New Entity

On January 25, 1983, the organization was officially established as Novell, Inc., with Ray Noorda appointed as president and CEO. Noorda, an experienced leader known for revitalizing companies, concentrated efforts on the file server technology acquired from Novell Data Systems. Starting with a workforce of approximately 15 employees, the company introduced its flagship product later that year: the versatile network operating system (NOS) Novell NetWare.

Securing capital proved difficult; Safeguard Scientifics, the principal shareholder, conducted a rights offering in January 1985 at $2.50 per share, generating over $5 million and decreasing Safeguard’s ownership from 51% to 24%. Novell began trading as an over-the-counter security.

NetWare

Novell’s first product was ShareNet, a proprietary hardware server utilizing the Motorola 68000 CPU. Recognizing the constraints of proprietary platforms, Novell transitioned to the IBM PC architecture by porting NetWare to operate on IBM PC XT systems powered by Intel 8086 processors. This shift enabled centralized multitasking for file and print services and gained traction by 1984 through compatibility with third-party applications.

The emergence of IBM PCs and escalating business demand for local area networking coincided with NetWare’s launch. Its kernel-based design offered high performance alongside robust security features, including user- and group-level access controls, making it attractive to network administrators. The network protocol derived from Xerox Network Systems (XNS), with Novell developing proprietary protocols IPX and SPX to support client–server architectures.

Beginning in 1987, Novell marketed its own Ethernet adapter cards (NE1000 and NE2000) at competitive prices, aggressively increasing market penetration with sales reaching 20,000 units monthly by 1989. The manufacturing of these cards was eventually transferred to Anthem Electronics while maintaining Novell branding.

Novell’s strategic acquisition of Excelan, led by Kanwal Rekhi in 1989, enhanced its Ethernet smart card portfolio and commercialized TCP/IP protocol support. This merger combined Novell’s $281 million annual revenue with Excelan’s $66 million and solidified a significant foothold in Silicon Valley. Rekhi assumed an influential executive role shaping Novell’s strategic direction and growth during this time.

Industry experts recognized NetWare as instrumental in evolving PC-based local area networks into robust enterprise solutions, delivering essential reliability and security features that rivaled mainframe network systems.

NetWare 386

By 1989, NetWare held an estimated 40-60% share of the network operating system market. That year saw the introduction of NetWare 386 (version 3.0), which utilized the Intel 386 processor to provide a more advanced architecture. Unlike general-purpose operating systems that added networking capabilities secondarily, NetWare remained a purpose-built network OS. Its kernel supported dynamic driver loading/unloading, while allowing development of NetWare Loadable Modules (NLMs) in C for enhanced modularity. Version 3 extended support to Apple Macintosh and Unix workstations for file and print sharing alongside access to key business data. This facilitated integration with leading database systems such as Oracle and Sybase.

Analysts lauded NetWare 386 as a market-leading innovation representing the most extensive rewrite in the product’s history and driving significant commercial success. By 1990, Novell commanded an almost monopolistic position within the NOS sector for enterprise networking needs. Competitors including Corvus Systems, Banyan Systems, and LANtastic were unable to effectively challenge Novell’s supremacy. Early Microsoft efforts with MS-NET and LAN Manager as well as IBM’s initiatives also failed to gain comparable traction.

Between 1988 and 1992, Novell’s revenue nearly tripled to $933 million annually, evenly split between domestic and international markets. Profits reached $249 million per year while the stock price increased twelvefold from 1986 through 1991.

Leveraging its dominant market position, Novell expanded NetWare’s functionality through acquisitions and introduced new services such as NetWare for SAA and multi-protocol routing capabilities. The company strategically targeted large enterprises and wide area networks, exemplified by a 1991 collaboration with IBM focused on marketing and development. Although Novell later launched NetWare for Small Business, it reduced investment in research and was slow to advance administrative tools—relying heavily on the platform’s reputation for stability and user-friendliness.

Corporate philosophy and "coopetition"

By the beginning of 1985, Novell was experiencing rapid growth, although many outside the industry remained unfamiliar with the company or the significance of local area networks. Founder Ray Noorda described Novell as "the most misunderstood company in the world." By 1986, The Salt Lake Tribune had identified Novell as an emerging technology leader in Utah, alongside companies such as Evans & Sutherland and Iomega. Outgrowing its original location in Orem, Novell initiated construction of a larger campus in Provo, Utah, eventually expanding to encompass six buildings between 1986 and 1993.

Noorda was a strong advocate of "coopetition," nurturing a network of both hardware and software vendors—including rivals—based on the belief that overall industry expansion would ultimately benefit Novell’s core networking business. For instance, competitors like 3Com and IBM sold more network interface cards compatible with NetWare than with their own proprietary systems. This forward-thinking strategy earned Noorda recognition as the "Father of Network Computing."

The corporate culture at Novell mirrored Noorda’s personal values, including his Mormon faith, which contributed to what was often referred to as the "Mormon work ethic" within the company. Known for his frugal nature and simple office environment, Noorda led with a disciplined yet effective management style.

In 1989, pivotal executives Craig Burton and Judith Clarke—credited with much of Novell’s earlier achievements—left the company. Burton was widely seen as Noorda’s probable successor, while Clarke played a critical role in marketing and positioning efforts.

In April 1990, Novell announced a $1.5 billion merger of equals with Lotus Development Corporation, marking what would have been the largest software merger at that time. However, the deal fell apart when Lotus CEO Jim Manzi declined to grant Novell equal representation on the board.

By 1993, NetWare controlled roughly two-thirds of the network operating system market, powering over 500,000 networks worldwide and serving approximately 55 million users. Networking was the fastest expanding segment in computing, growing at an annual rate of 30% to reach $10 billion by that year. Novell ranked as the second-largest PC software company after Microsoft, with its workforce increasing from about 15 employees when Noorda joined to over 4,300 by the end of 1993. Beyond its Utah headquarters, Novell maintained substantial operations in San Jose that managed sales, marketing, product management, and executive functions.

Sales and channel strategies

Novell’s expansion was propelled not only by its technological innovations but also by a sales approach centered on a broad channel network of approximately 13,000 value-added resellers rather than relying heavily on a direct sales force. These resellers offered services including network education, installation, and ongoing maintenance. Their clientele ranged from retailers like CompUSA and Egghead Software, serving small business customers, to systems integrators such as Andersen Consulting and Electronic Data Systems catering to enterprise clients. Novell also developed local franchises through Authorized Education Centers operating under franchise agreements. Certification programs such as Certified NetWare Engineer (CNE) and Master CNE helped cultivate a highly skilled partner ecosystem. Industry analysts observed that Novell effectively outsourced its distribution by training partners who then promoted NetWare actively, establishing a self-sustaining revenue stream. This collaborative model extended internationally through subsidiaries and authorized distributors across regions including Japan, South America, and Eastern Europe.

Under CEO Ray Noorda’s leadership, Novell offered software upgrades priced at one-third the cost of new licenses. This enabled resellers to market upgrades as if they were full-priced new copies—a gray market practice that Novell deliberately tolerated. This approach empowered resellers to bypass traditional distributors like Tech Data and Ingram by acquiring discounted NetWare versions directly. The resulting revenue supported Novell Field Support Technicians who frequently worked alongside front-line resellers as Certified NetWare Engineers. Drawing on insights from his tenure at General Electric, Noorda structured incentives so that resellers earned higher margins from Novell products than from competitors’, thereby strengthening reseller loyalty and driving sales growth.

Incentives

Approaching the 1990s' midpoint, CEO Noorda was close to 70 years old and lacked a defined succession strategy, which caused unease among industry observers due to his pivotal influence on the company's ethos.[1][2] Concurrently, Novell encountered mounting pressure from Microsoft's Windows NT, a bundled networking operating system set to erode NetWare's dominance.[1][2]

Noorda spearheaded Novell's acquisition strategy designed to challenge Microsoft's supremacy.[3][4][5] Acknowledging that NetWare's platform was inadequate as a comprehensive OS,[2][6] and following unsuccessful merger negotiations with Microsoft CEO Bill Gates,[7] Novell completed several significant acquisitions from 1991 through 1994: Digital Research Inc. (DR-DOS), Unix System Laboratories (Unix operating system technology), Serius Corp. (application development tools), along with WordPerfect Corporation and Quattro Pro from Borland (productivity software).[7] These ten purchases over a four-year span positioned Novell as a formidable rival to Microsoft.[7] By September 1993, BusinessWeek emphasized the escalating competition between the two firms.[8] In November 1993, Noorda revealed memory-related health problems and announced his intention to retire once a successor was appointed.[9]

In April 1994, former Hewlett-Packard executive Robert Frankenberg assumed the role of Novell’s CEO, while Noorda continued as chairman.[10] Complications arose from the USL acquisition and doubts were cast on the WordPerfect acquisition.[10] Still, Frankenberg viewed WordPerfect as essential for developing network-centric applications unique to Novell.[10] The June 1994 procurement of WordPerfect and Quattro Pro represented the largest software deal at that time, elevating Novell to the position of third-largest software company worldwide after Microsoft and Computer Associates.[11]

Noorda fully retired in November 1994 but remained Novell’s largest shareholder; Frankenberg took over as chairman as well.[12][13]

Desktop Operating Systems and Embedded Solutions: DOS, NEST, and Corsair

In June 1991, Novell acquired Digital Research for to broaden its server-oriented PC software lineup as an alternative to Microsoft’s offerings.[14] NetWare incorporated DR DOS as its boot loader, with ambitions to embed networking directly into DR DOS and compete against Windows. Initially, Novell planned to develop a graphical interface based on Digital Research's GEM, but legal challenges redirected efforts toward creating the Star Trek—an x86 adaptation of Apple's Classic Mac OS running atop multitasking DR DOS.

By 1992, Novell ceased development of Digital Research's Multiuser DOS, licensing its source code to former Master Value Added Resellers (VARs) such as DataPac Australasia, Concurrent Controls, and Intelligent Micro Software, enabling independent continuation by 1994.

The Corsair initiative, led by Novell’s advanced technology division around 1994, concentrated on merging Internet connectivity with a desktop metaphor. Due to Unix's high hardware requirements and licensing fees, Novell shifted focus toward Linux as a leaner OS base, contributing to IPX networking for NetWare and enhancing compatibility through the Wine layer.

Digital Research's FlexOS, which IBM licensed for their 4690 OS in 1993 and which was utilized in Novell's Embedded Systems Technology (NEST), was sold to Integrated Systems, Inc. (ISI) for in July 1994; this transaction included shares amounting to 2% ownership in ISI.

NEST embodied CEO Ray Frankenberg’s vision of "pervasive computing," aiming to interconnect one billion devices by the year 2000 via embedded Novell software managed through SuperNOS and Novell Directory Services.

By late 1994 or early 1995, Novell discontinued the Corsair desktop project, transferring its components to Caldera, Inc., a startup funded by founder Ray Noorda’s investment firm, The Canopy Group.

On July 23, 1996, Novell divested its remaining Digital Research assets—including all versions of Novell DOS (previously DR DOS), GEM, and CP/M-based systems—to Caldera for US$400,000 plus royalty payments. Personal NetWare had been internally discontinued in 1995 but was licensed in binary form to Caldera.

By January 1997, Novell formally ended the NEST program, concluding its embedded systems initiatives.

Server OS: UnixWare and SuperNOS

After launching the Univel venture in October 1991, Novell acquired Unix System Laboratories (USL) from AT&T Corporation in December 1992 to challenge Microsoft's advancing networking capabilities in Windows NT. This acquisition granted Novell ownership of the Unix SVR4 source code and the UnixWare operating system. Subsequently, Novell transferred ownership of the Unix trademark and standards to the industry consortium X/Open. The newly established Unix Systems Group, which incorporated Univel, primarily operated out of USL’s Summit, New Jersey offices before relocating to Florham Park in 1995; its European branch moved to Bracknell, Berkshire.[15]

In January 1994, Novell launched UnixWare 1.1, providing both personal and advanced server editions that included TCP/IP, a NetWare Unix Client, and Merge to enable compatibility with DOS and Windows applications. Early in 1995, the release of UnixWare 2.0 brought enhancements such as multiprocessor support, an improved installation process, and stronger integration with NetWare.[16][17]

By September 1994, Novell revealed plans for "SuperNOS," a microkernel-based network operating system designed to merge the strengths of NetWare 4.1 with UnixWare 2.0. The goal was to create a unified platform combining NetWare’s network services with UnixWare’s application capabilities, supporting both NetWare Loadable Modules (NLMs) and Unix executables to rival Windows NT. SuperNOS targeted distributed server environments featuring a cohesive interface and utilized object-oriented programming to simplify application development.[18][7]

From an architectural standpoint, SuperNOS executed NLMs within kernel space to maximize performance while running Spec 1170-compliant Unix applications in user space. It combined NetWare’s distributed parallel processing with UnixWare’s single system image clustering technology. Developed in partnership with French firm Chorus Systèmes SA, SuperNOS employed Chorus microkernel technology for SVR4 compatibility—a more adaptable solution compared to Mach. By mid-1995, with roughly one-third of development complete and over 60 engineers involved, SuperNOS encountered internal challenges stemming from cultural divisions within Novell and doubts about Unix’s advantages over NetWare. Industry analysts viewed its anticipated 1997 launch as too delayed to effectively counter Windows NT’s expanding market presence.[19][20][21]

Despite these initiatives, the acquisition of USL underperformed financially—during fiscal years 1993 through 1995, the Unix Systems Group contributed only about 5% to Novell’s total revenue. The anticipated resolution of the Unix wars through vendor consolidation failed to materialize. By late 1995, Novell opted to withdraw from the Unix market.[22][23]

In September 1995, Novell divested UnixWare to the Santa Cruz Operation (SCO), accompanied by a licensing agreement involving Hewlett-Packard. SCO intended to integrate UnixWare (based on SVR4.2) with its OpenServer platform (SVR3.2-based) into a unified product named "Gemini," incorporating NetWare functionalities and leveraging SCO’s reseller network. Hewlett-Packard planned to embed NetWare components and Directory Services into its HP-UX operating system for direct sales efforts. Both SCO and HP committed to co-developing a next-generation 64-bit Unix variant. Approximately 400 Novell engineers working on UnixWare were offered employment opportunities at SCO or HP; some remained at Novell.[24]

Although initially slated for continuation post-sale, the SuperNOS project was ultimately discontinued. A decade later, Novell’s Open Enterprise Server would resurrect aspects of a hybrid NetWare/Unix-like environment based on SUSE Linux Enterprise Server rather than UnixWare.[25]

By December 1995, skepticism arose regarding the viability of the tripartite arrangement among Novell, SCO, and HP. Industry observers questioned SCO’s qualifications as the primary custodian of Unix, while HP’s "White Box" initiative faced significant technical hurdles in merging Gemini with HP-UX systems. The deal finalized in December required modifications by October 1996 amid ongoing uncertainties that later contributed to disputes during the SCO-Linux disputes.[26][23]

Tools: AppWare

In June 1993, Novell purchased Serius Corp., recognized for its graphical programming language that facilitated application creation through icon-driven object commands. Alongside this, Novell acquired Software Transformations Inc., a developer of a cross-platform object code library designed to enable software portability between different systems. These technologies were consolidated into the AppWare platform, with Serius's product rebranded as AppWare Visual AppBuilder, its components renamed AppWare Loadable Modules, and the library termed AppWare Foundation. Oversight of this project was assigned to the AppWare Systems Group. Joe Firmage, founder of Serius, took on the role of vice president of strategy within Novell’s Network Systems Group.

AppWare represented one of Novell's three primary strategic priorities, alongside NetWare and UnixWare, targeting scalable and distributed enterprise computing tasks such as accounting systems and reservation management. According to Novell executive Jim Tolonen, NetWare functioned as the infrastructure layer, Unix served as the application platform, and AppWare provided the development environment for distributed applications.

By September 1994, Novell declared its intention to sell the AppWare Foundation component to an external party while continuing to develop Visual AppBuilder and introducing new Loadable Modules. Industry observers characterized these three product components as an unstable combination. Following Novell’s strategic retreat from UnixWare and SuperNOS in 1995, Joe Firmage departed the company. Subsequently, Novell sought a purchaser for AppWare and in March 1996 transferred all rights to Network Multimedia Inc., headed by Ed Firmage, who had formerly directed AppWare marketing at Novell.

Applications: WordPerfect, Quattro Pro, and GroupWise

In March 1994, Novell acquired WordPerfect Corporation in a stock transaction valued at $1.4 billion and purchased Quattro Pro from Borland for $145 million in cash. The objective was to develop an office suite tightly integrated with NetWare and UnixWare to support networked workgroup collaboration rather than isolated computing. Despite alignment in corporate culture and geography between the entities involved, Novell’s share price fell following the announcement. The transactions concluded in June 1994 with an effective WordPerfect acquisition cost reduced to $855 million due to fluctuations in stock value.

These acquisitions formed the foundation of Novell's Application Group. Significant workforce reductions followed, decreasing employee numbers from approximately 10,150 after the acquisitions. For a period, Novell relocated its corporate headquarters to WordPerfect’s facility in Orem.

The office productivity market was shifting toward comprehensive suites dominated by Microsoft Office. In December 1994, Novell launched PerfectOffice 3.0 based on Borland Office but featuring enhanced integration and user interface improvements. This suite comprised WordPerfect, Quattro Pro, Presentations (for slide creation), InfoCentral (personal information management), and GroupWise collaboration software. A professional edition incorporated AppWare along with Borland’s Paradox database system. PerfectOffice achieved sales exceeding those of Lotus SmartSuite, while GroupWise expanded its user base to three times that of Lotus Notes. Nevertheless, analysts considered PerfectOffice’s entry too late to effectively challenge Microsoft’s market leadership.

WordPerfect incorporated OpenDoc and IBM System Object Model technologies aligned with Novell’s distributed object framework across NetWare Loadable Modules, AppWare Bus, UnixWare, and SuperNOS platforms. Non-core elements such as the Main Street multimedia product line were discontinued.

Although WordPerfect maintained nearly half of the standalone word processing market share, office suites dominated overall with Microsoft Office controlling 86% compared to PerfectOffice’s 5%. This segment exerted negative pressure on Novell’s financial results and stock valuation.

In November 1995, Novell announced plans to divest its personal productivity software portfolio. By January 1996, an agreement was reached to sell WordPerfect and Quattro Pro to Corel for $186 million—a significant loss relative to the original purchase price—while retaining key assets like the GroupWise collaboration application. Estimates indicate that Novell absorbed losses totaling approximately $750 million on WordPerfect. The transaction was completed in March 1996.

Outcomes

Novell's strategic initiatives in this timeframe largely failed to generate favorable financial results. The company reported a net loss of $35 million for fiscal year 1993, mainly attributed to acquisition-related write-downs, which triggered a sustained decline in its stock valuation. Despite achieving record revenues of $1.998 billion in 1994 and $2.041 billion in 1995, many of the acquisitions made under CEO Ray Noorda were short-lived, with numerous assets eventually sold off. Industry analysts and business media frequently criticized these moves as ineffective attempts to rival Microsoft, with the acquisition of WordPerfect being widely regarded as a significant failure by the year 2000.

Financial outcomes remained lackluster through 1995 and 1996. In August 1996, CEO Robert Frankenberg resigned under board pressure after dismantling Noorda’s acquisitions but falling short of leveraging the Internet’s expanding influence on networking technologies.

NDS and subsequent product launches

Novell persisted in advancing its product lineup via the NetWare Systems Group, notably unveiling Novell Directory Services (NDS) alongside NetWare 4.0 in 1993. Rooted in the CCITT X.500 standard, NDS provided a distributed directory service that initially positioned Novell ahead of Microsoft’s then-unreleased Active Directory. Following the discontinuation of UnixWare, Novell concentrated on enhancing NetWare; however, the rollout of NetWare 4 encountered compatibility challenges that discouraged approximately 40 million users from upgrading. This led to significant revenue losses and customer migration toward Windows NT, which was favored for its robust application and database support.

By 1996, Novell began transitioning toward Internet-centric products, replacing its proprietary IPX protocol with native TCP/IP compatibility and integrating Java support. This shift included the introduction of Intranetware as part of its new strategy.

The appointment of Eric Schmidt as CEO in April 1997 marked a strategic realignment focused on core strengths. Coming from his role as CTO at Sun Microsystems, Schmidt prioritized efficient execution over broad diversification. Under his guidance, Novell launched BorderManager in August 1997, offering proxy server and firewall capabilities to link NetWare networks with the Internet. Additionally, NDS was enhanced to function on both Windows NT and NetWare platforms.

NetWare 5.0 was released in October 1998 to strengthen Novell’s competitive position by expanding on eDirectory and introducing Novell Cluster Services (NCS) and Novell Storage Services (NSS), which replaced legacy file system technologies. It supported both native TCP/IP and legacy IPX protocols to facilitate customer transitions without disruptive upgrades.

Market share decline

The integration of networking features into mainstream PC operating systems after 1995 drastically diminished demand for Novell's NetWare product. Unlike previous Windows editions, Windows NT, Windows 95, Linux, and OS/2 incorporated built-in networking functionality, eroding Novell’s market dominance. A mid-1996 Forrester Research survey revealed that while 90% of corporate users possessed NetWare, only 20% had adopted the latest version, and fewer than half anticipated continued long-term use. By March 1996, Novell’s stock price had fallen from $33 in 1993 to below $12, accompanied by revenue declines starting in 1995. By 1997, Windows NT accounted for 42% of new network OS installations, surpassing NetWare’s 33%, while overall NetWare market share dropped to 26%, trailing Windows NT’s 36%. Unix and Linux also captured meaningful portions of the market.

In response to shrinking revenues, CEO Eric Schmidt implemented cost-cutting measures early in his tenure, including layoffs amounting to roughly 18% of staff. Excess inventory led to a temporary suspension of NetWare shipments to resellers. Despite rumors about relocating headquarters, Novell reaffirmed its commitment to Provo by opening a new office tower in 2000.

Nevertheless, under Schmidt’s leadership, both sales figures and stock prices declined sharply—from $40 down to $7 per share—largely due to flawed channel management strategies. Schmidt reversed founder Ray Noorda’s lenient channel policies by initiating legal action against resellers who sold upgrade licenses as full versions. Although this strategy temporarily increased revenue, it alienated many resellers who subsequently abandoned support for NetWare.

By 1999, Microsoft had outpaced Novell in marketing efforts by engaging directly with corporate executives and converting reseller-certified technicians from Novell CNEs to Microsoft MCSEs. Resellers promoted Windows 2000 features such as Group Policy over NetWare’s character-based user interface. In response, Novell shifted focus toward network services and cross-platform interoperability, developing products like eDirectory and GroupWise for multiple operating systems.

By the year 2000, prominent customers including Chase Manhattan Bank and United Parcel Service were migrating away from NetWare solutions. A revenue warning during the second quarter triggered a steep stock price drop of approximately 40%. In October that year, Novell introduced "DirXML" (later renamed Novell Identity Manager), a product designed to synchronize data across various directory systems—leveraging eDirectory’s capabilities as a strategic asset.

Throughout Schmidt’s tenure, Novell developed several Internet-focused products that received positive reviews; however, sales performance lagged due to challenges with channel training and support processes, including allegations of channel stuffing practices. Despite these initiatives, Novell’s standing within the industry diminished significantly. News.com characterized Schmidt’s leadership as a brief period of revival followed by ongoing strategic difficulties that impeded sustained business growth.

Cambridge Technology Partners

In March 2001, Novell expanded its service offerings by acquiring the consulting company Cambridge Technology Partners (CTP), which was established in Cambridge, Massachusetts by John J. Donovan. Novell recognized that integrating software with services was crucial to fulfilling customer needs, despite facing opposition from its internally software-centric culture and finance department.

Jack Messman, then CEO of CTP and a member of Novell's board, played a key role in facilitating the acquisition and subsequently assumed the position of Novell's CEO. Chris Stone rejoined Novell as vice chairman to guide the company’s transition towards open source and enterprise Linux initiatives. The transaction was completed in July 2001, after which Novell moved its corporate headquarters to Massachusetts.[27] Shortly thereafter, Eric Schmidt departed for Google, where he took on roles as board chairman and CEO.[28]

In July 2002, Novell acquired SilverStream Software, a company specializing in web services applications but experiencing a decline in market influence. The platform was rebranded as Novell exteNd, featuring XML and web service capabilities built upon the Java EE framework.

SuSE and Open Enterprise Server

In August 2003, Novell purchased Ximian, known for developing open source Linux applications such as Novell Evolution, Red Carpet (software), and Mono (software). This move signaled Novell’s strategic pivot toward Linux-centric products.

Later that year, in November 2003, Novell acquired Linux operating system developer SuSE, significantly enhancing its share in the Linux distribution market. IBM provided financial support to facilitate the SuSE acquisition.

Around mid-2003, Novell introduced "Novell Enterprise Linux Services" (NNLS), which enabled NetWare services to run on the SUSE Linux Enterprise Server (SLES) 8 platform. The same year saw the release of NetWare 6.5, marking the final iteration of the NetWare product line.[29]

In November 2004, Novell entered the enterprise desktop market with the launch of Novell Linux Desktop 9, which combined Ximian Desktop with SUSE Linux Professional 9.1.

The successor to NetWare, named Novell Open Enterprise Server (OES), was launched in March 2005. OES delivered NetWare services on either a NetWare 6.5 or SUSE Linux Enterprise Server 9 kernel,[29] catering to customers transitioning from NetWare to Linux environments.

In August 2005, Novell initiated the openSUSE project based on SUSE Professional,[30] providing free downloadable versions alongside traditional boxed retail editions.[31]

Stagnation

Between 2003 and 2005, Novell released multiple products aimed at reclaiming market share and decreasing dependence on legacy systems; however, these attempts did not achieve their intended impact. Leadership tensions culminated in Chris Stone’s departure in late 2004 due to conflicts with then-CEO Jack Messman. Subsequent cost-reduction measures included layoffs in 2005. Although revenue from Linux offerings increased during this period, it failed to offset declines in NetWare sales, resulting in overall stagnant revenue performance. Extended restructuring phases highlighted uncertainties in strategic focus and management difficulties.

In June 2006, both CEO Jack Messman and CFO Joseph Tibbetts were removed from their positions. Ronald Hovsepian, who was serving as president and COO, was promoted to CEO, while Dana Russell assumed the role of interim CFO.

"Your Linux is Ready"

In August 2006, Novell introduced SUSE Linux Enterprise 10 (SLE 10), marking its first enterprise Linux server release to incorporate virtualization through the Xen hypervisor. Alongside this, the SUSE Linux Enterprise Desktop (SLED) debuted a more intuitive graphical user interface featuring XGL-powered 3D graphics. Promoted under the slogan "Your Linux is Ready," SLE 10 was aimed squarely at enterprise users. Later that year, Novell unveiled SUSE Linux Enterprise Real Time (SLERT), a real-time operating system variant developed using technology licensed from Concurrent Computer Corporation.

Legal actions and reactions

Beginning in 2003, Novell played a pivotal role in the SCO–Linux disputes, particularly in the SCO Group, Inc. v. Novell, Inc. lawsuit concerning Unix intellectual property rights originally transferred during agreements from the mid-1990s. Novell challenged SCO’s assertions over Unix copyrights, resulting in legal decisions favoring Novell and contributing to SCO’s bankruptcy filing. A jury verdict in 2010 reaffirmed Novell’s ownership of Unix copyrights; however, Novell chose not to commercially exploit this asset as its strategic focus had shifted toward SUSE Linux.

In 2004, Novell initiated legal proceedings against Microsoft alleging antitrust violations related to its WordPerfect division; this lawsuit was dismissed in 2012 due to lack of merit.

On November 2, 2006, Novell and Microsoft announced a strategic alliance encompassing mutual product support and collaborative research aimed at enhancing software interoperability and virtualization capabilities. Microsoft provided an upfront payment of $348 million for patent cross-licensing and SUSE Linux Enterprise Server subscriptions, along with a commitment to spend roughly $46 million annually over five years on joint marketing efforts for integrated SLES/Windows Server solutions. Concurrently, Novell agreed to pay Microsoft no less than $40 million per year throughout the same timeframe.

This collaboration yielded tools such as the OpenXML/ODF Translator for OpenOffice.org. Additionally, Microsoft granted legal assurances not to pursue litigation against users of Moonlight—an open-source alternative to Silverlight—albeit with exclusions related to GPLv3-licensed software.

Despite tangible commercial advantages, the agreement drew criticism from free and open source software advocates who expressed concerns about potential compromises of core principles and questioned its compatibility with GPL licensing. Bradley M. Kuhn of the Software Freedom Law Center described the deal as "worse than useless," though Novell cooperated with an SFLC audit focused on GPL compliance. Richard Stallman remarked that GPLv3 would prevent similar agreements moving forward; nevertheless, existing contracts like this one were grandfathered under GPLv3 terms.

The Samba project publicly opposed the partnership, with developer Jeremy Allison resigning from Novell in protest.

In early 2007, reports emerged suggesting that the Free Software Foundation might contest Novell’s rights to market Linux; subsequent clarifications indicated that their concerns centered on safeguarding future licensing rather than imposing immediate restrictions.

Intelligent workload management

By December 2009, Novell positioned itself as a leader in intelligent workload management by offering solutions tailored for varied workloads across heterogeneous data center environments. This approach aligned with the company’s emphasis on cloud computing security and leveraged technologies acquired through its 2008 purchase of Canadian firm PlateSpin. A key component was SUSE Studio, an online platform enabling users to build customized Linux distributions, software appliances, or virtual appliances. CEO Ron Hovsepian emphasized that SUSE Studio empowered application providers to produce virtual appliances without needing to rewrite or retest them for deployment in cloud infrastructures supporting multiple platforms such as Hyper-V, VMware, and Xen.

Novell also established alliances with SAP, Citrix Systems, and Ingres to further this strategy. Industry analysts offered mixed evaluations; although Novell possessed robust technology offerings, it faced challenges gaining significant market traction compared to competitors like Microsoft and VMware.

Acquisition by The Attachmate Group

Novell had been a frequent acquisition candidate over the years. In March 2010, Elliott Associates, an institutional investor holding roughly 8.5% of Novell's shares, proposed a $5.75 per share offer (approximately $1 billion), which Novell declined, considering it undervalued their business and growth potential.

By November 2010, Novell consented to a $2.2 billion purchase by The Attachmate Group, with plans to maintain Novell as two separate divisions, one of which was SUSE. Simultaneously, 882 Novell patents were divested for $450 million to CPTN Holdings LLC, a consortium led by Microsoft and including Apple, EMC, and Oracle. These patents mainly related to enterprise systems management, file handling, collaboration applications, and identity/security technologies. To alleviate antitrust concerns raised by the U.S. Department of Justice regarding open source innovation, CPTN committed to keeping all patents under the GPLv2 and Open Invention Network licenses, thereby ensuring open source projects retained access.

The acquisition finalized in April 2011 at $6.10 per share, resulting in Novell becoming a fully owned subsidiary of Attachmate. Following the merger, certain products and brands were integrated into Attachmate’s NetIQ division, while the SUSE Linux brand operated as an independent business unit. The Attachmate division itself remained unchanged.

Novell’s headquarters shifted back to Provo, Utah; however, significant restructuring led to the sale of its original six-campus facilities there. After the acquisition, Attachmate announced layoffs impacting hundreds of Novell employees in Provo, sparking concerns about the sustainability of open source initiatives such as Mono.

Acquisition by Micro Focus and OpenText

In September 2014, mainframe software provider Micro Focus acquired The Attachmate Group, including Novell. The transaction closed on November 20, 2014, with SUSE spun off as a separate entity within Micro Focus. SUSE was subsequently sold to EQT AB in 2019.

Novell’s product portfolio was rebranded and merged into Micro Focus’s offerings in file management, networking, collaboration, and security. Solutions such as Open Enterprise Server, GroupWise, and ZENworks were marketed exclusively under the Micro Focus name without any Novell branding. Notably absent from Micro Focus’s product lineup was NetWare.

In January 2023, Canadian software firm OpenText acquired Micro Focus. Former Novell products remain part of OpenText’s catalog but no longer reference their Novell heritage.

Companies acquired

Certification

Novell was among the pioneers in providing certification programs for its user base, offering a range of professional credentials such as:

  • Certified Novell Administrator (CNA)
  • Certified Novell Engineer (CNE)
  • Enterprise Certified Novell Engineer (ECNE)
  • Master Certified Novell Engineer (MCNE)
  • Certified Directory Engineer (CDE)
  • Certified Novell Instructor (CNI)
  • Master Certified Novell Instructor (MCNI)
  • Certified Linux Professional 10 (CLP 10)
  • Certified Linux Engineer 10 (CLE 10)

Legacy

Novell’s identity was deeply connected to NetWare, which ultimately constrained its ability to expand as Windows gained dominance in the server operating system market. Although NetWare initially led in network services, it faced challenges keeping pace with industry changes.

Despite this, Novell played a pivotal role in shaping Utah’s technology landscape. Together with WordPerfect, it helped transform Utah Valley into a technological center during the 1980s, nurturing an entrepreneurial environment that contributed to the area’s reputation as the "Silicon Slopes." Numerous former staff members went on to establish startups within the region, extending Novell’s influence. Industry leaders such as founder Ray Noorda are recognized for their contributions to this growth.

Products

In its later phase, Novell’s offerings included:

  • BorderManager – providing Internet access control, VPN capabilities, and firewall services on NetWare
  • Business Continuity Clustering – delivering automated high-availability server solutions
  • Client for Linux and Client for Windows – enabling access to NetWare and Open Enterprise Server functionalities
  • Cluster Services for Open Enterprise Server – managing SAN resources and ensuring high availability
  • Data Synchronizer – synchronizing applications and mobile devices through CRM connectors
  • Endpoint Lifecycle Management Suite – overseeing application and device management throughout their lifecycle
  • Endpoint Protection Suite – securing endpoint devices
  • File Management Suite – combining tools for file discovery, optimization, and provisioning aligned with business policies
  • File Reporter – analyzing unstructured data and predicting storage requirements
  • GroupWise – offering secure email, calendaring, contact management, task tracking with mobile synchronization
  • iFolder – enabling secure file access across multiple devices and online platforms
  • iPrint – a network print server facilitating printing from any device worldwide
  • NFS Gateway for NetWare 6.5 – allowing UNIX/Linux NFS file system access to NetWare servers
  • Open Enterprise Server – delivering NetWare services on SUSE Linux Enterprise Server
  • Open Workgroup Suite and its Small Business edition – Linux-based collaboration and workgroup solutions serving as alternatives to Microsoft products
  • Service Desk – IT service automation provided through OEM partnership with LiveTime Software
  • Storage Manager – automating file storage management processes
  • Total Endpoint Management Suite – balancing security needs with productivity across enterprises
  • Vibe – secure team collaboration platform featuring document management and workflow tools

The ZENworks suite encompassed comprehensive systems management capabilities:

    • Application Virtualization enabling predictive streaming of applications
    • Asset Management consolidating hardware and software inventory data
    • Configuration Management automating endpoint administration and software deployment
    • Endpoint Security Management delivering identity-centric protection with driver-level firewall controls
    • Full Disk Encryption protecting laptops and desktops from unauthorized access
    • Handheld Management securing mobile devices through password enforcement and remote lock features
    • Linux Management automating deployment and upkeep of Linux environments
    • Mobile Management safeguarding both corporate-owned and BYOD devices
    • Patch Management streamlining vulnerability detection and remediation processes
    • Virtual Appliance offering plug-and-play configuration along with asset and patch management

This extensive product lineup underscored Novell’s strategic emphasis on enterprise security, endpoint administration, collaboration solutions, and seamless integration across diverse platforms worldwide.

See also


Further reading

External links

  1. ↑ 1.0 1.1 Cite error: Invalid <ref> tag; no text was provided for refs named NYT_Noorda_1992
  2. ↑ 2.0 2.1 2.2 Cite error: Invalid <ref> tag; no text was provided for refs named Fortune_battle_1993
  3. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named Barney_1994_Novell
  4. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named Allchin_1992
  5. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named Age_forsale_2000
  6. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named CNET_Firmage_2003
  7. ↑ 7.0 7.1 7.2 7.3 Cite error: Invalid <ref> tag; no text was provided for refs named Guardian_Frankenberg_1994
  8. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named BW_Microsoft_1993
  9. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named NYT_Noorda_1993
  10. ↑ 10.0 10.1 10.2 Cite error: Invalid <ref> tag; no text was provided for refs named Fisher_1994_Novell
  11. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named DH_WordPerfect_1994
  12. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named CW_Noorda_ex_chair_1994
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  14. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named BW_Noorda_1991
  15. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named CBR_1993_USG
  16. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named CBR_UnixWare_1994
  17. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named PCM_UnixWare_1995
  18. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named CBR_SuperNOS_1994
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  20. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named CBR_SuperNOS_1995
  21. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named OH_Rekhi_2017
  22. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named AR_1995
  23. ↑ 23.0 23.1 Cite error: Invalid <ref> tag; no text was provided for refs named IW_Confusing_2003
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  27. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named Sweeney_2002_CTP
  28. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named CNET_Schmidt_2001
  29. ↑ 29.0 29.1 Cite error: Invalid <ref> tag; no text was provided for refs named Proven_2013
  30. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named Gasperson_2005_SUSE
  31. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named openSUSE_2013
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