History of Novell 1980-1990
The story of Novell's rise in the 1980's is a crackling good story. The eighties was the time in which Apple and Microsoft grew mightily, and Novell grew right along with them, and it's rise was just as much a part of the personal computer (PC) success story.
Novell's story is a good story for many reasons:
- First, it's a wonderful tale of people: A tale of people who were taming the technological frontier that Integrated Circuits (IC's) had opened up in the late 1970's. This was not an easy frontier to tame. Many tried, many failed, and a few were wildly successful. The Novell story contains all of the above, people trying, failing and then succeeding wondrously.
- Second, it gives context to the Personal Computer Revolution that started in the eighties. In the seventies there were only mainframes and minicomputers, and technology forecasters of the 70's were predicting that IC's would bring about faster and cheaper mainframes and minicomputers. The personal computer, then called a microcomputer, was forecast to be mostly a home-oriented toy -- with a role much like a 2010's gaming console.
- Third, it is a wonderful before-and-after story because Novell's first attempt to strike it rich was a dismal failure, but while that failure was crashing down, the seeds for the second attempt were sown, and the second attempt was a billion-dollar success.
- Fourth, the story shows how important the many elements of business are to creating a technology success. Not only must there be a hot technological idea, there must be hot marketing, sales and support to synergize with it.
- Finally, the story reveals how a business evolves as it grows. Novell grew from fifteen people and a dream in 1983 to thousands and a near billion dollar company in 1989. Those people who were joining Novell in the eighties were joining a company who's major task was still telling the world what it made. Not only did the world have to find out what a LAN was, so did thousands of newly-hired employees! -- and that was just as big a challenge. In the end, that growth changed the company. It changed from a visionary company into a "Statue of Liberty" company -- something to be admired, but something that doesn't change much.
All-in-all, a crackling good story!
What is here is an abridged version of my book "Surfing the High Tech Wave -- A history of Novell 1980-1990. If you want more, check out the book. You can find information on my web site at:
The Novell story breaks down into three parts:
- The First Try 1980-82 in which Novell Data Systems, Novell Inc.'s predecessor company, is founded, grows for a year, then shrinks dramatically for another year as its products prove not popular in the marketplace.
- The Second Try 1983-1989 in which Novell succeeds mightily, and grows to thousands of employees.
- The End of the Visionaries 1990 in which Novell transitions from being a visionary history-making company into a well-managed Statue of Liberty company that can make money, but not history. This era is so named because this transition was accompanied by a management transition in which the visionaries left and how the company was run changed dramatically.
The First Try
The famous Novell was the Novell of the Second Try, but it was preceded by a Novell that was founded with just as much ambition and a lot more expertise. That company, Novell Data Systems Inc., was founded by Jack Davis and George Canova in 1980, with funding from Safeguard Scientific, a venture capital group started by the owners of Safeguard, makers of the Safeguard One Write system, a successful manual accounting system for small businesses.
George and Jack had many years of experience in the minicomputer business and many contacts. They called upon these to create a new business what would manufacture minicomputers, terminals and printers in Utah. They picked Utah because it was a low wage area in the US, but with a well educated population and two world-class universities to draw technical talent from.
Yes, that original plan had no mention of a local area network (LAN), the product that would make Novell rich and famous, but that's what makes this story so fascinating. The LAN was not part of that original plan, but its evolution from that original plan shows how the technology frontiers of the 80's were tamed: people strove, planned, experimented and innovated, constantly looking for winning combinations.
Novell started in a building that had been a truck dealership in Orem, a medium-sized city in Utah Valley fifty miles south of Salt Lake City. In 1981 it grew to 120 people as the printer, terminal and personal computer were designed and developed. The minicomputer was put on hold at the start until the cash flow was strong, and in its place a personal computer was to be developed.
The personal computer was added for two reasons: if you're developing a terminal, making it into a personal computer takes little extra effort, and because the Safeguard people were looking for an automated accounting product that they could upgrade their One Write people to, and the personal computer could be used for that.
During 1981 the company grew to 120 people and the printer and the personal computer were developed and the selling started. A terminal was developed for the Sperry-Univac market, but not sold.
In 1982 the company ambitions ran aground on harsh reality -- the products were not selling well enough to sustain the company Jack and George had built up. One after the other they were cast out by the financiers, and The Time of Six Presidents began at Novell.
The Time of Six Presidents was so named because from the leaving of Jack Davis in December 1981 to the arrival of Ray Noorda in January 1983, Novell went through at least six presidents… no one knows for sure how many exactly. It was a time of chaos. Novell was fighting for survival, and many different plans were thought up, and many were tried. There was turnover and there were layoffs as the company shrunk from 120 back down to 15 people, and as the company shrunk everyone still with the company was searching for the right products and marketing to sell and survive.
One of the products thought of in this chaotic time was hatched by four programers brought on for a temporary assignment to develop a word processor for the personal computer. Instead of developing the word processor, they proposed and developed the first incarnation of the LAN. This group later became Superset, the heart of the programming talent that developed Netware, Novell's LAN product. The LAN was recognized as a hot idea, but it developed too slowly to save the first Novell.
The Second Try
In January 1983 the second era began. Ray Noorda, an already well-respected computer industry entrepreneur, came in to head up the company, partly on the recommendation of Jack Davis, and the Time of Six Presidents ended.
Noorda recognized the potential of the LAN. During 1983 and 84 he reorganized Novell around the LAN idea, discarded the other ideas and products, and reorganized what was left of the Novell staff to support it.
This reorganization was very much a product of its time and the resources available to Novell. This was the time of the PCXT, the PCAT, and the Macintosh. Hard disks were just becoming standard, the Macintosh was Apple's second try at introducing the PC community to a graphical interface (after the Lisa), and Windows introduced as a "gooey interface" running on top of MSDOS. There were about twenty companies making LAN products for the PC world.
Novell's key to success was developing a product and marketing plan that could support other aspiring players in the LAN arena. Craig Burton, one of the survivors of the Time of Six Presidents, became the proponent for what he called, "Corporate Jujitsu" and Ray Noorda called "Coopetition" -- working with competitors to advance the LAN industry as a whole.
Between 1985 and 1989 the product and marketing strategies of Novell were spectacularly successful. The company grew and the industry grew by leaps and bounds as personal computers became a vital part of the business scene.
The End of the Visionaries
In 1989 and 1990 the magic started ending, and the third era for Novell began. As Novell grew to thousands, a lot of experienced people were brought in. But these people were experienced with the minicomputer industry, not the personal computer industry. In addition, these people were brought in to be good managers, not good visionaries, and there's a big difference.
The end of the Visionary period began with the departure of Craig Burton and Judith Clarke in 1989 and 90, and completed with the departure of Ray Noorda in 1994. Novell stayed profitable, and large, but it transitioned into a niche-serving company, it no longer made history.
And that's the story of Novell in the 80's. Once again, if you want a longer version with a lot more details, look for my book: "Surfing the High Tech Wave, a history of Novell 1980-1990" by Roger Bourke White Jr.