Two decades ago, Novell's network operating system software was almost ubiquitous in the enterprise. Now, its current president wants to restore Novell to a similar level of prominence.
"The Novell Corporation was at one time one of the top IT providers in the world. But sometime in the mid-1990s, it lost its way," admitted Bob Flynn, Novell's president and general manager, in an interview with IDG News Service. Flynn's goal is to have Novell once again perceived as "a high quality, sophisticated technology provider for IT infrastructure."
Novell has kept a fairly low profile since it was purchased by Attachmate two years ago for $2.2 billion. But starting this month, Novell is commencing a vigorous sales campaign to attract new customers.
The road back will not, however, be an easy one for Novell, analysts said.
"Since the Attachmate acquisition, Novell has been asleep at the wheel in several competitive markets," said Hyoun Park, principal analyst at IT research firm Nucleus Research. "Novell will need to focus immediately on modernizing its brand. It needs to start thinking about how social networking, the iPhone, and edge application environments are changing how technology is used."
"The fact is that Novell's traditional focus areas -- collaboration and complex IT management processes -- continue to resonate in today's increasingly complex business environments," said Charles King, of the Pund-IT IT analysis firm, by email. "However, those core processes are evolving radically due to the broad adoption of devices like smart phones and tablets."
Novell made its name, and is best known today, for its NetWare network operating system. NetWare provided a way to link individual computers to a local area network, before that feature came built in with Microsoft Windows. As offices upgraded to computers running the network-ready Windows 95 or newer operating systems, the demand for NetWare faded. The company repositioned itself as offering enterprise infrastructure software, and enjoyed some success with products such as the GroupWise messaging and collaboration suite.
Since being purchased by Attachmate, which made Novell a private company and kept it as a stand-alone subsidiary, Novell has shifted its strategy. "The first thing we needed to do was get our customers settled back in and rebuild their confidence about what Novell was doing," Flynn said. "Before the acquisition, these customers were not receiving a lot of love, so to speak."
To hear Flynn tell it, Novell lost its way as a public company in part because of pressures from investors. It was already struggling to regain the lost momentum when NetWare fell from favor. At its zenith in 1995, Novell's revenues peaked at $1.63 billion, though by 2010, annual revenue shrank to $811 million.
"Some of the core products -- those that were generating the most amount of revenue and had the largest installed base -- were actually receiving the least amount of attention internally, because they weren't products that could drive up shareholder value," he said.
Flynn didn't mention what these products were, though, in the acquisition, Attachmate, which is a holding company, split the teams managing the Novell NetIQ security management and Suse Linux distribution product brands off as their own stand alone divisions.
And since Attachmate took Novell private, Novell has concentrated on ensuring that existing customers are satisfied with their Novell experience. It also channeled the company's engineering expertise into strengthening its core products, notably the NetWare successor Open Enterprise Server, the Zenworks configuration management software, and GroupWise. "We want to leverage the strength of Novell from a technology standpoint," Flynn said.
