SuperNOS

Novell, Inc.

Company type	Public
Industry	Software and services
Predecessor	Novell Data Systems Inc.
Founded	August 1980 (1980-08)
Founder	George Canova, Jack Davis
Defunct	2014 (2014)
Fate	Acquired by The Attachmate Group in 2011; later part of Micro Focus International and OpenText
Headquarters	Provo, Utah , United States
Area served	Global
Key people	Ray Noorda (former CEO)
Products	NetWare, Novell Directory Services, GroupWise, SUSE Linux
Parent	The Attachmate Group (2011–2014), then Micro Focus International, now OpenText

Novell, Inc. () was a U.S.-based software and service provider headquartered in Provo, Utah, active from 1980 until 2014. Its primary offering, the cross-platform network operating system NetWare, was instrumental in the development of local area networks, shifting the computing paradigm away from traditional mainframe systems.

During the leadership of CEO Ray Noorda, NetWare commanded the personal computer networking sector throughout the late 1980s and early 1990s, achieving a dominant 63% share of the network operating system market. By the early 1990s, NetWare networks exceeded half a million installations, supporting over 50 million users globally. Novell emerged as the second-largest PC software company after Microsoft Corporation and played a significant role in establishing Utah Valley as a technology center.

In the early to mid-1990s, Novell sought to compete directly with Microsoft by acquiring companies such as Digital Research, Unix System Laboratories, WordPerfect, and Borland's Quattro Pro division. These acquisitions faced difficulties due to integration challenges and delayed market entry, while Microsoft's bundling of network services with Windows NT diminished NetWare’s market position. Although Novell introduced innovations like Novell Directory Services and GroupWise, the company entered a period of sustained decline.

In an effort to broaden its portfolio, Novell later purchased SUSE Linux but was unable to restore its previous market standing. The firm remained independent until its acquisition by The Attachmate Group in 2011. Subsequently, Attachmate was acquired by Micro Focus International in 2014, which itself was taken over by OpenText in 2023. Today, Novell’s product lineup is incorporated within OpenText’s offerings.

Foundation as a hardware enterprise

Initially founded as Novell Data Systems Inc. (NDSI), the company operated out of Orem, Utah, focusing on producing computer systems for small businesses including terminals and peripherals. Established in August 1980 by industry professionals George Canova and Jack Davis, Canova took on the role of president while Davis managed sales and marketing. The name "Novell" was inspired by Canova’s wife, who mistakenly thought it meant "new" in French. Dennis Fairclough, an early collaborator, later became a professor at BYU.

Funding originated from Safeguard Scientifics, a venture capital firm based in Pennsylvania that had spun off from Safeguard Business Systems, investing over $2 million and obtaining majority ownership. Despite this, Canova maintained considerable equity.

NDSI operated from a former carpet warehouse situated near the largely inactive Geneva Steel plant. By late 1980, recruitment efforts were underway for hardware and software engineers.

The company experienced initial success, launching two products by mid-1981: the Nexus Series microcomputer and the Image 800 dot matrix printer. The Nexus utilized the Zilog Z80 processor alongside the CP/M operating system. Shipments commenced late in 1981.

Nonetheless, NDSI faced challenges due to its microcomputer entering an increasingly saturated market with subpar performance. Revenues remained low while expenses were high, leading to Davis’s termination in November 1981.

To improve competitiveness, NDSI planned to connect multiple microcomputers. In 1981, former BYU students Drew Major, Dale Neibaur, and Kyle Powell—collectively known as the SuperSet Software group—were hired to develop this networking technology. They also created the multiplayer video game Snipes.

Heavy financial losses persisted into early 1982, prompting management restructuring and staff reductions; Canova was replaced as president by Jack Messman from Safeguard Scientifics. Messman recognized SuperSet’s networking innovation after observing Snipes operating across various PC platforms. Despite ongoing losses affecting Safeguard Scientifics' stock price, NDSI shifted its focus toward becoming a provider of LAN hardware and software solutions. Additional layoffs in July 1982 reduced personnel from 50 to 30.

Safeguard recorded a $3.4 million write-down reflecting NDSI's strategic transition from hardware manufacturing to software development. Further changes in management ensued, while Major, Neibaur, and Powell continued supporting Novell through SuperSet Software. Major later remarked that the hardware’s poor performance underscored that true value resided in software innovation.

Key contributors during this period also included strategist Craig Burton and communications specialist Judith Clarke. Despite difficulties, Novell Data Systems showcased its work at COMDEX in November 1982, where it attracted interest from Ray Noorda.

Formation of the Company

Novell, Inc. was officially established on January 25, 1983. In April of the same year, Ray Noorda, an experienced executive known for revitalizing companies, was named president and CEO. Meanwhile, Chairman Messman continued to represent Safeguard Scientifics, which retained majority ownership.

Initially staffed by approximately 15 employees, Novell concentrated on the file server technology acquired from Novell Data Systems as its primary focus. Later in 1983, the company introduced its signature product: a versatile network operating system (NOS) called Novell NetWare.

To overcome financial obstacles, Safeguard Scientifics launched a rights offering in January 1985, offering Novell shares at $2.50 each to existing shareholders. This initiative raised over $5 million and decreased Safeguard’s stake from 51% to 24%. Subsequently, Novell began trading as an over-the-counter stock.

NetWare

Novell’s initial offering was a proprietary hardware server built around a Motorola 68000 processor and designed with a star network topology, known as Novell S-Net or ShareNet. Recognizing the constraints of exclusive hardware systems, Novell transitioned NetWare to operate on IBM PC XT machines equipped with Intel 8086 processors, enabling centralized multitasking file and print services.

As IBM PCs gained popularity in corporate environments, NetWare addressed the growing need for local area networks that allowed multiple PCs to share files and printers. This timely entry enabled Novell to capture departmental and regional market segments effectively.

Operating at the kernel level (ring 0), NetWare delivered high performance despite lacking broader operating system features. Its 1987 release, Advanced NetWare/286, received positive feedback. The system incorporated robust security through user and group roles alongside file-level access controls, which appealed to system administrators.

Novell based its networking protocol on Xerox Network Systems (XNS), creating proprietary protocols: Internetwork Packet Exchange (IPX) and Sequenced Packet Exchange (SPX). These client-server protocols facilitated file and print services via the NetWare Core Protocol (NCP) over IPX, while also supporting routing and service discovery.

Beginning in 1987, Novell marketed its own Ethernet adapter cards—the NE1000 (8-bit) and NE2000 (16-bit)—offered at lower prices than competitors such as 3Com. By 1989, monthly sales reached 20,000 units. Production was later outsourced to Anthem Electronics, though Novell maintained branding control.

Industry experts credit NetWare with revolutionizing PC-based LANs into dependable enterprise networks by delivering essential reliability and security features previously limited to mainframe environments.

In 1989, Novell acquired Excelan, founded by Kanwal Rekhi, a pioneer in smart Ethernet cards and early TCP/IP commercialization. This acquisition combined Excelan’s $66 million revenue with Novell’s $281 million and established a strategic foothold in Silicon Valley. Rekhi took on a significant executive role shaping Novell’s future strategies.

NetWare 386

By 1989, NetWare commanded an estimated 40-60% share of the network operating system market. That year saw the release of NetWare 386 (version 3.0), which utilized the Intel 386 processor’s advanced features to provide a more sophisticated architecture. Unlike general-purpose operating systems that added networking capabilities secondarily, NetWare remained a dedicated NOS. Its kernel supported dynamic driver loading/unloading and introduced NetWare Loadable Modules (NLMs) written in C for enhanced extensibility. NetWare 3 extended compatibility to Apple Macintosh and Unix workstations, broadening file and print sharing capabilities and enabling access to vital business data. This integration facilitated connectivity with database systems like Oracle and Sybase.

A Dataquest analyst described NetWare 386 as "a blow-away-the-competition type product." As Novell’s most extensive rewrite at that time, NetWare 3 achieved remarkable success. By 1990, Novell had established an almost monopolistic hold on NOS solutions for business networks. Rivals such as Corvus Systems, Banyan Systems, and LANtastic had little influence on Novell’s dominance. Early Microsoft products like MS-NET and LAN Manager failed to pose significant competition; IBM’s attempts also fell short.

Between 1988 and 1992, Novell’s annual revenue nearly tripled to $933 million with profits reaching $249 million. Revenues were evenly split between domestic and international markets. The company’s stock price increased twelvefold from 1986 through 1991.

Leveraging its leadership position, Novell expanded its offerings atop NetWare with solutions such as NetWare for SAA and the multi-protocol router product line. The company shifted focus toward large enterprises and wide area networks (WANs), exemplified by a marketing and development partnership with IBM initiated in 1991. Although Novell later redirected attention to small businesses via NetWare for Small Business, it curtailed research spending and was slow to enhance administrative tools—relying heavily on the platform's stability and minimal configuration requirements.

Corporate philosophy and "coopetition"

By early 1985, Novell was experiencing rapid growth, yet many outside observers remained unclear about its significance in local area networking, prompting Noorda to describe it as "the most misunderstood company in the world." By 1986, The Salt Lake Tribune identified Novell as an emerging technology leader in Utah, poised to join the ranks of Evans & Sutherland and Iomega. As the original Orem facility became insufficient, Novell initiated construction of a larger campus in Provo, Utah during 1986; by 1993, this complex had expanded to six buildings.

Noorda championed the concept of "coopetition"—a blend of cooperation and competition—encouraging a broad network that included hundreds of hardware and software providers, even those considered competitors. For instance, early rival 3Com sold more Ethernet adapters compatible with NetWare than for its own platforms, a tactic that broadened Novell’s market penetration. This innovative approach earned Noorda recognition as the "Father of Network Computing."

Noorda's leadership style was influenced by his personal background, including his membership in the Mormon faith, which contributed to what became known as the "Mormon work ethic" culture within Novell. The company gained a reputation for employing diligent staff who embraced this ethic. Noorda himself was noted for his modest lifestyle and frugal management, often working from a simple office setting.

In 1989, two pivotal executives—Craig Burton and Judith Clarke—departed after driving much of Novell's initial achievements. Burton was seen as a potential successor to Noorda, while Clarke had played a key role in marketing strategy and corporate positioning.

In April 1990, Novell announced a $1.5-billion stock-swap merger with Lotus Development Corporation, which would have been the largest deal in software industry history at that time. However, the merger fell through when Lotus CEO Jim Manzi declined to grant equal board representation, leading Noorda to terminate the agreement before completion.

By 1993, NetWare controlled roughly two-thirds of the network operating system market, supporting over half a million networks and approximately 55 million users worldwide. Networking emerged as the fastest-growing area within computing, expanding at an annual rate of 30% and reaching $10 billion in value by that year. Novell ranked as the second-largest PC software vendor after Microsoft, with its workforce expanding from about 15 employees upon Noorda’s arrival to 4,335 by late 1993. In addition to its Utah presence, Novell extended operations into San Jose, concentrating sales and executive functions there.

Sales and channel strategy

Novell’s expansion was fueled not only by its technology but also through an extensive channel distribution model that relied on roughly 13,000 value-added resellers instead of maintaining a large direct sales team. These resellers provided services such as network training, installation, and ongoing maintenance. Their customer base ranged from retailers like CompUSA and Egghead Software, serving small businesses, to systems integrators including Andersen Consulting and Electronic Data Systems, supporting enterprise clients. Novell also developed local franchises via Authorized Education Centers operating under franchising agreements. Certification initiatives such as Certified NetWare Engineer and Master Certified NetWare Engineer ensured reseller proficiency. This framework effectively established a global network of knowledgeable advocates promoting sales across subsidiaries and authorized distributors throughout Japan, South America, and Eastern Europe.

Under CEO Ray Noorda’s guidance, Novell priced software upgrades at one-third the cost of new licenses but packaged them identically. This allowed resellers to resell upgrades as though they were full new copies at standard prices—a gray market practice that Novell deliberately did not monitor. Noorda explained this approach enabled frontline resellers to bypass distributors like Tech Data and Ingram Micro, thereby enhancing their profit margins. The revenue generated supported Novell Field Support Technicians who frequently worked directly for resellers as Novell CNEs (Certified NetWare Engineers). Drawing on his experience at General Electric, Noorda aimed to empower resellers to "earn more from your product than from someone else’s."

Incentives

By the early 1990s, with Noorda approaching his seventies and no clear successor identified, analysts expressed concerns due to his pivotal role in shaping the company’s culture. Simultaneously, Microsoft was preparing to launch its Windows NT operating system, which threatened Novell’s supremacy in networking by incorporating advanced networking capabilities after substantial investment.

To counter this threat, Noorda spearheaded a series of strategic acquisitions that were widely perceived as direct moves against Microsoft. Acknowledging NetWare’s shortcomings as a comprehensive platform for operating systems and applications, Novell acquired several companies: Digital Research Inc., known for DR-DOS, to rival MS-DOS; Unix System Laboratories, the proprietor of Unix technology; Serius Corp., a firm specializing in advanced application development; and the producers of the productivity suites WordPerfect Corporation and Quattro Pro from Borland. Between 1991 and 1994, Novell completed ten acquisitions. By September 1993, BusinessWeek underscored the fierce competition between Novell and Microsoft. In November of that year, Noorda revealed he was experiencing memory problems and announced his intention to retire once a suitable successor was appointed.

In April 1994, former Hewlett-Packard executive Robert Frankenberg took over as CEO while Noorda remained as chairman. The integration of USL and WordPerfect proved challenging but was considered by Frankenberg essential for creating distinctive networked applications. The acquisition of WordPerfect and Quattro Pro finalized in June 1994 marked the largest software deal at that time, propelling Novell to become the third-largest software company globally after Microsoft and Computer Associates.

Noorda fully retired in November 1994 but continued as Novell's largest shareholder. Subsequently, Frankenberg assumed the chairman position as well.

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

In June 1991, Novell purchased Digital Research to provide server-oriented PC software alternatives to Microsoft. NetWare utilized DR DOS as both a boot loader and maintenance platform, with ambitions to embed networking capabilities directly into DR DOS to challenge Windows. Initially, Novell planned to develop a graphical interface based on Digital Research's GEM, but legal complications prompted them to initiate the Star Trek in 1992—a project aimed at porting Apple's Classic Mac OS onto a multitasking version of DR DOS.

By 1992, Novell discontinued support for Digital Research's Multiuser DOS. Former Master Value Added Resellers such as DataPac Australasia, Concurrent Controls, and Intelligent Micro Software obtained licenses to continue independent development by 1994.

The advanced technology group at Novell managed the Corsair initiative by 1994, which sought to combine a desktop metaphor with Internet connectivity. Viewing Unix systems as overly resource-intensive and expensive, they identified Linux as a more suitable operating system foundation. Novell contributed to IPX networking for NetWare and developed the compatibility layer known as Wine.

Digital Research's FlexOS was licensed to IBM for their 4690 OS in 1993 and served internally within Novell Embedded Systems Technology (NEST). However, in July 1994, FlexOS was sold to Integrated Systems, Inc. (ISI) for a combination of cash and a 2% ownership stake in ISI.

NEST embodied CEO Frankenberg’s vision of "pervasive computing," aspiring to interconnect one billion devices by the year 2000. Numerous everyday appliances were intended to operate NEST, linked through SuperNOS, Novell Directory Services, and other management frameworks.

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

On July 23, 1996, Novell divested all remaining Digital Research assets—including Novell DOS, earlier versions of DR DOS such as StarTrek, PalmDOS, DOS Plus, and technologies like GEM—to Caldera for US$400,000 plus royalties. Although Personal NetWare had been discontinued at Novell in 1995, it was licensed in binary form to Caldera.

The NEST program was terminated by Novell in January 1997.

Server OS: UnixWare and SuperNOS

Following the launch of Univel in October 1991, Novell strengthened its position against Microsoft's growing networking presence in Windows and Windows NT by acquiring Unix System Laboratories (USL) from AT&T Corporation in December 1992. Unix presented benefits such as application server functionality and independence from vendor restrictions but faced obstacles in achieving broad market penetration.

The acquisition finalized in June 1993 gave Novell ownership of the Unix SVR4 source code and the UnixWare operating system. The Unix trademark and standards were transferred to the consortium X/Open. Novell established the Unix Systems Group to oversee this segment, integrating Univel into it as well. Key USL personnel remained at the Summit, New Jersey headquarters before relocating to Florham Park in 1995; meanwhile, the UK branch moved to Novell’s Bracknell location.

In January 1994, Novell introduced UnixWare 1.1, aimed at both desktop and high-end server markets, featuring built-in TCP/IP, a NetWare Unix Client, and Merge for compatibility with DOS/Windows environments. By early 1995, UnixWare 2.0 was released, incorporating support for multiprocessor systems, enhanced installation processes, and tighter integration with NetWare.

September 1994 saw Novell unveil "SuperNOS," a microkernel-based network operating system designed to merge NetWare 4.1’s networking capabilities with UnixWare 2.0’s application services. SuperNOS intended to support execution of both NetWare Loadable Modules (NLMs) and Unix binaries, enabling distributed server functionality alongside object-oriented development to rival Windows NT. Architecturally, NLMs were planned to operate within kernel space for speed benefits, while Unix applications would run in user space. The project utilized Chorus microkernel technology from USL and French collaborator Chorus Systèmes SA, noted for greater flexibility compared to alternatives like Mach. By mid-1995, SuperNOS development was roughly one-third complete with a team exceeding 60 engineers; however, internal divisions between NetWare and Unix groups hindered progress. Industry analysts considered the targeted 1997 launch too delayed to effectively challenge Windows NT’s expanding market share.

Financially, the USL acquisition underachieved; between fiscal years 1993 and 1995, the Unix Systems Group accounted for approximately 5% of Novell’s overall revenue. Only a limited number of Certified NetWare Engineers became deeply involved with UnixWare, and attempts to unify various Unix vendors did not succeed. By late 1995, Novell decided to divest from its Unix operations.

In September 1995, Novell sold UnixWare to the Santa Cruz Operation (SCO), accompanied by a licensing agreement with Hewlett-Packard. SCO planned to combine SVR4.2-based UnixWare with its SVR3.2 OpenServer into a unified product named "Gemini," incorporating NetWare services for distribution through SCO’s reseller channels. HP aimed to integrate NetWare components into its HP-UX platform alongside Distributed Computing Environment features for direct sales efforts. Additionally, SCO and HP committed to jointly developing a next-generation 64-bit Unix release. Roughly 400 Novell engineers working on UnixWare were offered employment opportunities at SCO or HP; a small number remained at Novell.

Although initial statements suggested SuperNOS would continue after the sale, the initiative was ultimately discontinued without reaching market release. Approximately ten years later, Novell revisited hybrid NetWare/Unix integration with its Open Enterprise Server product leveraging SUSE Linux Enterprise Server rather than UnixWare.

By December 1995, doubts surfaced regarding the sustainability of the SCO-HP-Novell collaboration. Industry skepticism centered on SCO’s ability to effectively manage the Unix portfolio. HP’s "White Box" plan to merge Gemini with HP-UX encountered significant technical obstacles. The deal finalized in December 1995 required modification in October 1996 but failed to prevent prolonged legal disputes between Novell and SCO amid later SCO-Linux controversies.

Tools: AppWare

In June 1993, Novell acquired Serius Corp., the creator of a graphical programming language designed for constructing applications through icon-based object linkages. Alongside this, Novell also obtained Software Transformations Inc., known for developing a cross-platform object code library facilitating software porting between different systems. These two technologies were integrated into what became AppWare. Serius’s original product was rebranded as AppWare Visual AppBuilder, its components were termed AppWare Loadable Modules, and the cross-platform library was named AppWare Foundation. The development team was consolidated under the AppWare Systems Group, with strategic leadership from Joe Firmage, Serius’s founder, who assumed the role of Novell’s vice president of strategy within the Network Systems Group.

AppWare represented one of Novell’s three core strategic focuses alongside NetWare and UnixWare, aimed at delivering scalable distributed computing solutions for enterprise-level applications such as general ledger management and reservation systems. Novell positioned NetWare as the foundational network infrastructure, UnixWare as the application operating system, and AppWare as the suite of development tools enabling distributed application creation.

By September 1994, Novell began divesting segments of the AppWare initiative, selling off the AppWare Foundation product while maintaining ongoing development of Visual AppBuilder and issuing new Loadable Modules. Industry observers criticized Novell’s three-part strategy as lacking stability. Disappointed by Novell’s shifting priorities—especially following the divestiture of UnixWare and the cancellation of SuperNOS—Joe Firmage departed in 1995. Later that year, Novell sought buyers for the AppWare assets; in March 1996, all rights were transferred to Network Multimedia Inc., led by Ed Firmage, a former marketing director at Novell.

Applications: WordPerfect, Quattro Pro, and GroupWise

In March 1994, Novell completed the acquisition of WordPerfect Corporation for $1.4 billion in stock and Borland’s Quattro Pro spreadsheet for $145 million in cash. These purchases were intended to establish a network-enabled office suite leveraging NetWare and UnixWare platforms with a strong emphasis on groupware collaboration capabilities. CEO Ray Noorda emphasized a strategic shift from isolated computing toward interconnected group collaboration environments. Although cultural and geographic factors aligned well between the companies, market reaction was unfavorable, reflected in a decline in Novell’s stock price. Due to stock fluctuations, the final effective purchase price for WordPerfect closed at $855 million in June 1994.

Following these acquisitions, Novell created its Application Group. Workforce reductions ensued post-merger, significantly lowering employee numbers; soon after completion, total staff numbered approximately 10,150. Corporate headquarters temporarily relocated to WordPerfect’s Orem facility.

The office productivity market was evolving from standalone word processors and spreadsheets toward integrated suites dominated by Microsoft Office. To compete effectively, Novell launched PerfectOffice 3.0 in December 1994—a comprehensive suite comprising WordPerfect, Quattro Pro, Presentations (for slide creation), InfoCentral (a personal information manager), and GroupWise for collaboration. A professional edition offered additional tools such as AppWare development utilities and Borland’s Paradox database system. Early sales showed PerfectOffice outperforming Lotus SmartSuite and GroupWise expanding its user base to three times that of Lotus Notes. Nonetheless, analysts observed that PerfectOffice entered the market too late to seriously challenge Microsoft Office's dominant position.

WordPerfect incorporated OpenDoc and IBM System Object Model technologies that supported Novell’s distributed object vision consistent with NetWare Loadable Modules, AppWare Bus architecture, UnixWare integration, and SuperNOS aspirations. Less aligned product lines like Main Street multimedia were phased out.

During Novell’s tenure, WordPerfect retained close to half of standalone word processor sales but trailed far behind Microsoft Office's overwhelming 86% share of office suites compared to PerfectOffice's modest 5%. The WordPerfect and Quattro Pro segments negatively affected Novell’s profitability and share value.

In November 1995, Novell declared intentions 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—reflecting a substantial loss relative to the initial $855 million investment—while keeping key products such as GroupWise within its portfolio. Estimates indicate that Novell incurred losses nearing $750 million on the WordPerfect acquisition. The transaction was finalized in March 1996.

Outcomes

Under the leadership of Noorda, Novell’s strategic initiatives largely underperformed, culminating in a $35 million net loss during the 1993 fiscal year due to acquisition-related write-downs. The company’s share value dropped sharply, and numerous acquired businesses and product lines were subsequently divested. Nonetheless, Novell achieved record revenues in 1994 and 1995, reaching $1.998 billion and $2.041 billion respectively. These financial improvements proved temporary as the acquisitions made during Noorda’s tenure were ultimately reversed.

The business media frequently criticized these strategies as ineffective attempts to rival Microsoft. By the year 2000, the WordPerfect acquisition was broadly viewed as a significant misstep. Financial results remained lackluster throughout 1995 and 1996. In August 1996, CEO Frankenberg resigned under board pressure after difficulties in unwinding Noorda’s acquisitions and failing to harness the growing significance of Internet technologies for networking.

NDS and subsequent innovations

Novell persisted in product innovation through its NetWare Systems Group, most notably with the introduction of Novell Directory Services (NDS) in NetWare 4.0 (1993). Built on the CCITT X.500 standard, NDS supplanted older user management frameworks and initially provided Novell a competitive advantage over Microsoft’s then-unreleased Active Directory.

Following the divestiture of UnixWare, Novell concentrated on enhancing NetWare. However, compatibility problems with NetWare 4 discouraged an estimated 40 million users from upgrading, resulting in substantial revenue setbacks. While NetWare 4.1 (1995) remedied some issues, many customers shifted their focus toward Windows NT, which offered superior application and database support along with bundled Internet Information Services (IIS). Meanwhile, despite millions of networks still running NetWare by 1996, Novell lagged behind in establishing a strong Internet market presence.

In reaction to these challenges, Novell began transitioning toward Internet-enabled solutions in 1996 by incorporating native TCP/IP support and embedding Java within NetWare. The company introduced Intranetware to improve Internet connectivity.

With Eric Schmidt assuming the CEO role in April 1997 following Frankenberg’s departure, Novell intensified its focus on core strengths. Schmidt sought to correct prior errors by narrowing the company’s focus to fewer strategic priorities. Christopher Stone joined as senior vice president of strategy and corporate development to help steer this approach.

Under Schmidt’s direction, Novell launched BorderManager in August 1997, providing proxy server and firewall capabilities that connected NetWare networks to the Internet. NDS was enhanced to function on both Windows NT and NetWare platforms, broadening its applicability.

NetWare 5.0 debuted in October 1998, utilizing eDirectory and introducing advanced functionalities such as Novell Cluster Services (NCS) and Novell Storage Services (NSS). It supported native TCP/IP alongside legacy IPX protocols to enable seamless network transitions without disruptive upgrades. The traditional Turbo FAT filesystem continued alongside NSS for compatibility purposes.

These product advancements were designed to reestablish Novell’s competitiveness amid evolving networking environments and growing Internet integration.

Reduction in Market Share

The widespread adoption of networking features within mainstream PC operating systems after 1995 significantly diminished Novell’s market dominance. Unlike earlier systems such as Windows 3.1, operating systems like Windows NT, Windows 95, Linux, and OS/2 incorporated native networking capabilities, lessening the reliance on third-party products like NetWare. A mid-1996 survey conducted by Forrester Research among 1,000 corporate users revealed that although 90% still possessed NetWare, only 20% had transitioned to the most recent version, and fewer than half anticipated continued use three years later. By March 1996, Novell’s share price had fallen from $33 in 1993 to below $12, with revenues declining from 1995 onward. In 1997, Windows NT accounted for 42% of new network OS deployments compared to NetWare’s 33%, overtaking NetWare even when factoring in upgrades. Overall, NetWare’s market share dropped to 26%, trailing behind Windows NT’s 36%. Unix maintained a substantial portion of the market, while Linux began to gain momentum.

Confronted with shrinking revenue streams, Schmidt introduced cost-cutting measures and reduced the workforce by approximately 18% early in his leadership. He also suspended NetWare shipments due to surplus inventory concerns. By mid-1997, Schmidt openly acknowledged the company’s deteriorated state upon his arrival. Despite rumors about relocating operations to San Jose, Novell reaffirmed its commitment to Provo by inaugurating a new headquarters in 2000.

Under Schmidt’s direction, Novell’s decline accelerated as sales dropped and stock prices plummeted from $40 to $7 per share. Industry analysts attributed this downturn primarily to ineffective channel strategies and mismanagement of reseller relationships. Schmidt attempted to reverse Noorda’s permissive policies by pursuing legal action against resellers who sold upgrade licenses as full versions. While this strategy temporarily increased revenue, it alienated many resellers who subsequently abandoned NetWare.

By 1999, Microsoft had outpaced Novell in marketing efforts as resellers shifted their focus, granting Microsoft direct access to corporate data centers and executive decision-makers. Numerous resellers re-certified their Novell Certified Engineers as Microsoft MCSEs and emphasized Windows 2000 features such as Group Policy over NetWare’s text-based interface. Facing declining revenues, Novell redirected its focus toward network services and cross-platform compatibility, developing products like eDirectory and GroupWise for multiple operating systems.

By the year 2000, prominent clients including Chase Manhattan Bank, United Parcel Service, and the University of Southern California were transitioning away from NetWare. A revenue warning in the second quarter triggered a 40% plunge in stock price. In October of that year, Novell introduced "DirXML," a solution designed to synchronize user information across directories and databases by utilizing eDirectory’s functionality; this product later evolved into Novell Identity Manager, becoming a flagship offering.

During Schmidt’s late-1990s tenure, Novell launched several Internet-focused products that received favorable reviews; however, sales underperformed due to challenges within the channel related to training deficiencies, lead generation issues, and inadequate support. Reports also emerged concerning channel stuffing practices. Despite initiatives aimed at new markets, Novell’s standing within the industry continued to erode. News.com characterized Schmidt’s leadership as navigating a difficult course with brief optimism before ultimately succumbing to entrenched strategic difficulties.

Cambridge Technology Partners

In March 2001, Novell revealed its plan to acquire consulting firm Cambridge Technology Partners (CTP), established in Cambridge, Massachusetts by John J. Donovan, as part of its strategy to broaden its services portfolio. Novell believed that integrating software with services was crucial to satisfy evolving customer needs. However, this acquisition clashed with Novell’s traditionally software-focused culture and encountered resistance from internal financial stakeholders.

The merger was led by CTP’s CEO Jack Messman, who had served on Novell’s board since the company’s early days; he subsequently assumed the role of Novell’s CEO. Chris Stone rejoined Novell as vice chairman and steered the company’s transition toward open source technologies and enterprise Linux. The deal finalized in July 2001, prompting Novell to move its headquarters to Massachusetts. Shortly thereafter, Schmidt departed for Google, where he eventually became CEO.

In July 2002, Novell expanded its web services capabilities by acquiring SilverStream Software. This product line was rebranded as Novell exteNd, providing XML and web service development tools grounded in Java EE technology.

SuSE and Open Enterprise Server

Novell made a significant push into Linux in August 2003 by acquiring Ximian, a developer known for open source Linux applications such as Novell Evolution, Red Carpet, and Mono. This acquisition marked a strategic shift toward a Linux-centric product lineup.

Later that year, in November 2003, Novell purchased Linux operating system creator SuSE, which had a notable influence on the Linux distribution landscape. This move was supported by an investment from IBM to bolster the acquisition.

Around mid-2003, Novell introduced "Novell Enterprise Linux Services" (NNLS), which ported traditional NetWare functionalities to the SUSE Linux Enterprise Server (SLES) version 8 platform. NetWare 6.5, released the same year, became the final iteration of the NetWare series.

In November 2004, Novell launched its inaugural enterprise desktop offering, Novell Linux Desktop 9, which combined elements from Ximian Desktop and SUSE Linux Professional 9.1.

The successor to NetWare, named Novell Open Enterprise Server (OES), was unveiled in March 2005. OES provided all services available in NetWare 6.5 but allowed deployment on either NetWare or SUSE Linux Enterprise Server 9 kernels, encouraging migration toward Linux environments.

In August 2005, Novell initiated the openSUSE project derived from SUSE Professional, delivering a Linux distribution available both as a free download and boxed retail product.

Stagnation

Between 2003 and 2005, Novell introduced multiple products aiming to halt market share erosion and lessen dependence on legacy systems; however, these initiatives did not meet projected outcomes. By late 2004, Chris Stone exited following leadership disputes with CEO Jack Messman. Subsequent cost-reduction measures included layoffs in late 2005. Although revenue from Linux offerings increased during this period, it failed to offset declines in NetWare sales. Overall revenue growth stagnated due to an ambiguous strategic direction and postponed organizational restructuring.

In June 2006, Ronald Hovsepian replaced Jack Messman as CEO, while Dana Russell stepped in as interim CFO after Joseph Tibbetts’ departure.

"Your Linux is Ready"

In August 2006, Novell introduced SUSE Linux Enterprise 10 (SLE 10), marking the debut of the first enterprise Linux server equipped with Xen-based virtualization technology. Alongside this, the SUSE Linux Enterprise Desktop (SLED) offered an intuitive graphical user interface and utilized XGL for advanced 3D graphics capabilities. Promoted under the slogan "Your Linux is Ready," SLE 10 was designed to appeal to corporate users. The following month, Novell unveiled SUSE Linux Enterprise Real Time (SLERT), a real-time operating system developed using technology licensed from Concurrent Computer Corporation.

Legal actions and reactions

Beginning in 2003, Novell found itself at the heart of the SCO–Linux legal conflicts concerning Unix intellectual property rights originally transferred through asset agreements with Santa Cruz Operation (SCO) in 1995. Novell challenged SCO’s assertions regarding Unix copyright ownership, resulting in judicial decisions favoring Novell and ultimately contributing to SCO’s bankruptcy. A jury verdict in 2010 reaffirmed Novell’s ownership of the Unix copyrights; however, Novell chose not to exploit this asset commercially, focusing its efforts on the SUSE Linux product line.

In 2004, Novell initiated legal action against Microsoft, alleging antitrust misconduct related to WordPerfect during the years 1994 to 1996; this lawsuit was dismissed in 2012.

On November 2, 2006, Novell and Microsoft announced a strategic partnership aimed at enhancing product compatibility and conducting joint research to improve interoperability between Microsoft Office and OpenOffice.org, as well as advancing virtualization technologies. As part of this agreement, Microsoft made an upfront payment of $348 million for patent collaboration and subscriptions to SUSE Linux Enterprise Server (SLES), committing approximately $46 million annually over five years to market combined SLES and Windows Server solutions. Concurrently, Novell agreed to pay Microsoft at least $40 million each year during that period.

This collaboration resulted in the development of the OpenXML/ODF Translator for OpenOffice.org. Additionally, Microsoft provided legal assurances not to pursue litigation against users of Moonlight—an alternative to Silverlight—provided it was not licensed under GPLv3 terms.

The open source community initially reacted negatively to the patent protection arrangement, expressing concerns that it might undermine GPL compliance and viewing it as a betrayal. Bradley M. Kuhn from the Software Freedom Law Center described it as "worse than useless," although Novell offered cooperation for conducting a GPL compliance audit. Richard Stallman, founder of the Free Software Foundation, stated that GPLv3 would prevent such agreements; nevertheless, the Microsoft-Novell deal was grandfathered under GPLv3 provisions effective prior to March 28, 2007.

On November 12, 2006, members of the Samba project publicly opposed the partnership and called on Novell to reconsider its position; Jeremy Allison, a Samba employee who confirmed internal consensus on this stance, resigned in protest.

Early in 2007, rumors circulated suggesting that the Free Software Foundation might prohibit Novell from distributing Linux; however, spokesperson Eben Moglen clarified that his remarks referred only to forthcoming GPLv3 clauses intended to block similar agreements in the future.

Intelligent workload management

By December 2009, Novell positioned itself as a leader in intelligent workload management, delivering solutions designed to handle varied workloads within heterogeneous data center environments. This strategy aimed to bolster customer trust in cloud computing security and incorporated technologies acquired through Novell's 2008 purchase of Canadian firm PlateSpin. A significant element was SUSE Studio, an online platform enabling users to build customized Linux distribution, software appliance, or virtual appliance images. CEO Ron Hovsepian emphasized cloud computing as a major industry trend aligned with Novell’s expertise, facilitating application vendors in creating virtual appliances without needing to modify their applications for cloud deployment. Novell’s offerings supported multiple cloud infrastructures such as Hyper-V, VMware, and Xen.

To advance intelligent workload management capabilities, Novell collaborated with companies including SAP, Citrix Systems, and Ingres. Industry analysts offered mixed evaluations; while recognizing Novell’s strong technological base, they noted challenges in achieving market visibility compared to competitors like Microsoft and VMware.

Acquisition by The Attachmate Group

Novell was often speculated to be a potential acquisition candidate. In March 2010, Elliott Associates, an institutional investor holding roughly 8.5% of Novell’s shares, proposed a buyout at $5.75 per share (around $1 billion), which Novell declined, considering the offer did not reflect its growth prospects.

By November 2010, Novell consented to be purchased by The Attachmate Group for $2.2 billion. The plan was to maintain Novell as two separate divisions, one of which included SUSE. Simultaneously, 882 patents were sold to CPTN Holdings LLC, a consortium led by Microsoft and comprising Apple, EMC, and Oracle. These patents were mainly concerned with enterprise software management, file collaboration, identity services, and security management. Attachmate committed to preserving the existing relationship between SUSE and openSUSE. The acquisition finalized in April 2011 with a cash payment of $6.10 per share, resulting in Novell becoming a fully owned subsidiary of Attachmate.

After the acquisition, several Novell products and brand names were integrated into Attachmate’s NetIQ division, while the SUSE Linux brand was established as an independent business unit. The Attachmate segment itself remained intact.

Shortly before the deal closed, Novell sold patents to CPTN for $450 million. The U.S. Department of Justice expressed antitrust concerns that this transaction might impede open source development. To address these issues, CPTN agreed that all patents would continue to be governed by the GPLv2 license and the Open Invention Network (OIN) license; CPTN was prohibited from restricting patent access under OIN or influencing Novell or Attachmate regarding licensing conditions.

Following the takeover, Novell’s headquarters moved back to Provo; however, substantial restructuring resulted in the sale of most of its original campus facilities. In April and May 2011, Attachmate announced workforce reductions impacting hundreds of Novell employees in Provo, raising doubts about projects such as Mono.

Acquisition by Micro Focus and OpenText

In September 2014, mainframe software provider Micro Focus declared its intent to acquire The Attachmate Group, including Novell, for . The transaction closed on November 20, 2014. Within Micro Focus, SUSE was separated from the remainder of Novell and later sold to EQT AB in 2019.

Novell’s product lines were rebranded and incorporated into Micro Focus’s portfolios for file management, networking, collaboration, and security solutions—products such as Open Enterprise Server, GroupWise, and ZENworks were marketed exclusively under the Micro Focus brand without reference to their Novell heritage. Notably, Micro Focus’s website omitted any mention of NetWare among these offerings.

In January 2023, Canadian software firm OpenText acquired Micro Focus. Former Novell products continue to be included within OpenText’s portfolio but without explicit identification as originating from Novell.

Companies acquired

• Santa Clara Systems, Inc. (1986) – storage systems, network cards, personal computers
• Cache Data Product (1986)
• CXI (1987) – micro-to-mainframe integration software
• SoftCraft (1987) – Btrieve database engine and development tools
• Indisy Software (1988/1990) – email and messaging solutions
• Excelan (1989) – TCP/IP connectivity across Unix, Mac, DEC VMS platforms
• Digital Research (1991) – PC operating systems including DR DOS
• International Business Software Ltd. (1992)
• Serius (1993)
• Unix System Laboratories (1993)
• WordPerfect Corporation (1994)
• Quattro Pro (Borland) (1994)
• Netoria (1999)
• Ukiah Software (1999)
• JustOn (1999)
• PGSoft (2000)
• Novetrix (2001)
• Cambridge Technology Partners (2001)
• Callisto Software, Inc. (2001)
• SilverStream Software (2002)
• Ximian (2003)
• SUSE (2003)
• Salmon (2004)
• Tally Systems (2005)
• Immunix (2005)
• e-Security, Inc. (2006)
• RedMojo (2007)
• Senforce (2007)
• PlateSpin (2008)
• SiteScape (2008)
• Fortefi (2008) – Command Control and Compliance Auditor solutions
• Managed Objects, Inc. (2008)

Certification

Novell was a pioneer in providing certification programs to validate expertise in its technologies. These credentials included:

• 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 faced challenges in gaining recognition beyond its core product, NetWare. As highlighted by The Register, NetWare remained a specialized solution while Microsoft Windows advanced into a powerful 64-bit server platform, which constrained NetWare’s market competitiveness.

Nonetheless, Novell played a crucial role in shaping Utah’s technology sector. Alongside WordPerfect during the early 1980s, Novell contributed to the emergence of Utah Valley as a prominent technology center. Numerous ex-employees launched startups in the area, cultivating an entrepreneurial ecosystem that helped earn the region the moniker Silicon Slopes. Industry experts frequently attribute this development to influential leaders such as Ray Noorda.

Products

In its later phase, Novell’s portfolio concentrated on network infrastructure, security solutions, and enterprise management tools:

• BorderManager – Provides Internet access control, VPN capabilities, and firewall protection integrated with NetWare
• Business Continuity Clustering – Facilitates automated high-availability clustering for servers
• Client for Linux and Client for Windows – Enable connectivity to NetWare and Open Enterprise Server environments
• Cluster Services for Open Enterprise Server – Streamlines management of SAN resources and ensures high availability
• Data Synchronizer – Synchronizes data across applications and mobile devices; compatible with major CRM platforms
• Endpoint Lifecycle Management Suite – Oversees application, device, and server management throughout their operational lifecycle
• Endpoint Protection Suite – Delivers comprehensive security for endpoints
• File Management Suite – Combines tools to optimize file storage aligned with organizational policies
• File Reporter – Performs analysis on extensive unstructured data sets and predicts storage requirements
• GroupWise – Offers secure messaging, calendaring, contact management, task tracking, and mobile synchronization
• iFolder – Provides secure file storage accessible both online and offline across multiple devices
• iPrint – Network print server that enables printing from any device worldwide
• NFS Gateway for NetWare 6.5 – Grants access to UNIX/Linux NFS file systems from NetWare clients
• Open Enterprise Server – Delivers NetWare services operating atop SUSE Linux Enterprise Server
• Open Workgroup Suite and Open Workgroup Suite for Small Business – Linux-based collaborative desktop-to-server solutions tailored for businesses of varying sizes
• Service Desk – IT service automation platform supplied through OEM partnership with LiveTime Software
• Storage Manager – Automates management of file storage permissions for users and groups
• Total Endpoint Management Suite – Balances enterprise-wide security requirements with user productivity
• Vibe – Secure collaboration platform featuring document management and workflow automation

The ZENworks suite offers extensive systems management capabilities including:

• • Application Virtualization utilizing predictive streaming driven by user behavior patterns
  • Asset Management consolidating hardware inventory, software licensing, and usage metrics
  • Configuration Management automating endpoint setup and software deployment processes
  • Endpoint Security Management providing identity-centric protection alongside driver-level firewall controls
  • Full Disk Encryption safeguarding data on laptops and desktops
  • Handheld Management securing mobile devices through password enforcement and data protection measures in case of loss or theft
  • Linux Management automating deployment and upkeep of Linux-based desktops and servers
  • Mobile Management overseeing both corporate-owned and BYOD devices with robust security controls
  • Patch Management streamlining patch compliance tracking and remediation workflows
  • Virtual Appliance delivering plug-and-play functionality for configuration, asset tracking, and patch administration

See also

• Novell BrainShare

Further reading

• Digital Research - Summary from 07-21-91[1][2] (Marc Perkel reportedly influenced Novell in early 1991 to purchase Digital Research and initiate development of "NovOS".)

External links

• Novell: Global, Japan-specific
• Novell Community Forums
• Official Novell Blogs
• Novell Wiki Resources
• Open Horizons – Collaborative EMEA network of international Novell User Groups
• Open Horizons UK – Active user group serving Novell clients in the United Kingdom