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Why Novell picked Linux

Charles Cooper CNET News.com

Published: 05 Nov 2003 12:55 GMT

A decade ago, then-chief executive Ray Noorda decided it would be neat to turn Novell into a carbon copy of Microsoft.

As far as brainstorms go, this one rates right up there with the charge of the Light Brigade: it produced a lot of headlines but ended badly for all concerned.

Novell had a nice gig selling network operating systems. But Noorda, who could have used personal instruction from Michael Corleone, confused business with the personal and became obsessed with taking down detested rival Bill Gates.

So he decided that Novell would reinvent itself, offering a constellation of programmes and services to surround its core operating system. In relatively short order Novell paid a bundle of money to acquire Unix Systems Labs and a suite of application software.

The move looked great on paper but was an awful mess in reality. Customers bolted as products fell behind schedule, the new organisation lapsed in disarray, and management wondered cluelessly how to make things right. Not only did Microsoft extend its lead in office applications, but Windows NT also caught up and surpassed Novell's NetWare.

The end was predictable: Noorda was sent packing, and management rid itself of all his handicraft -- at fire sale prices, to boot. Novell never recovered from its stumble, and the pink slips multiplied as losses mounted. Bob Frankenberg, Joe Marengi and Eric Schmidt all took turns trying to revive the company, but it was largely viewed as another piece of roadkill crushed by Microsoft.

But current chief executive Jack Messman has come up with an unconventional strategy that can be summed up in one word: Linux.

Novell already had ties to the open-source technology, having made tools to manage Linux servers, and last year it bought SilverStream to smooth the way its software worked with Java applications. Now, with its two most recent acquisitions -- Ximian and SuSE Linux -- Novell has completed the reinvention. Ximian's software is designed to foster the use of Linux desktops, while SuSE is the No. 2 seller of the server version of Linux used by corporations.