When I read the news from Novell’s
Ten years ago VINES was the best networking software for large organizations. (Full disclosure — I used to edit ABUI Network News, the magazine of the independent Association of Banyan Users International, but I was never employed by Banyan itself.) VINES offered centralized administration for large numbers of servers, with robust services for security, messaging, and backup, among others. Even more essential, it had StreetTalk, a highly scalable directory service that no one else’s technology could touch.
Unfortunately, Novell was eating Banyan’s lunch in most situations when the two went head-to-head. To combat Novell, the marketing geniuses at Banyan decided to advertise directly to the corporate decision-makers instead of IT managers through strategic ads in publications like Business Week and Fortune. They also unbundled many VINES services from the operating system, which would allow them to run on other platforms as a product called Enterprise Network Services. I was fortunate to edit an excellent book by Rob Sparre on how to implement ENS for SCO Unix.
By the time Banyan resorted to those tactics, it was too late. NetWare 4.0, released in March 1993, included Novell Directory Services, which competed directly with StreetTalk. Although the initial product had several flaws, it provided a reasonable alternative for organizations looking for a directory service. Microsoft at that point was only talking about Active Directory, but Microsoft’s pre-announcements routinely paralyze organizations who feel they need to see what the dominant software company will come up with before they can commit to existing products. Despite its advanced technology and its operating system’s low operating costs Banyan was never able to gain ground against its more established competitors. In 1999, Banyan discontinued its products, leaving Novell and Microsoft to fight for the lucrative low- and medium-end networking market.
With NDS, you’d have thought Novell would have a major leg up against Microsoft, but the company created a major distraction for itself when it bought Utah neighbor WordPerfect Corp. in March 1994 and tried to diversify into the applications space. While Novell was dividing its energy, Microsoft successfully expanded its operating system expertise from the desktop to the server, putting Novell in its current perilous position.
That brings us to where we are today. How is Novell going about reversing its fortunes? Well, it’s taking out ads in publications like Business Week and Fortune to target corporate decision-makers instead of IT managers. And it’s unbundling some of its services to make them run on other platforms — Linux, to be precise.
Hmmm.
Luckily, that’s not all Novell is doing. It purchased Cambridge Technology Partners two years ago to add a strong service component to its business. Service, when done well, is a proven money-maker. Banyan had only a tiny service business, because it sold its product through resellers, who wanted to retain that income stream themselves.
One major difference between 2003 and 1993 is the emergence of the open source community. By opening its software, Novell can use work by programmers not on its payroll — a significant advantage. It remains to be seen, however, if Novell can interest the open source community in its products.
Can Novell survive? My heart says yes, but my head isn’t so sure. Novell needs to prove it has a lower cost of ownership than the alternatives, but that won’t be enough. Novell has to hope for an emotional backlash against Microsoft from Microsoft’s current user community. Without that, it’s just too easy for organizations to follow the natural upgrade path without investigating possibly better alternatives.
