Inside the new Novell

Without question, open source is one of the most important forces in enterprise IT. Apache is still the reigning champion of Web server software. Red Hat and MySQL are two of the most-watched software vendors today. And the success of Linux is such that even Microsoft, once considered the unstoppable juggernaut of the OS market, is being forced to play defense.

The open source model is often said to fly in the face of traditional commercial software development. But now Novell, the former undisputed leader in proprietary networking software, is banking on Linux and open source to rescue its business from years of decline. Where once it seemed fated for obscurity, Novell is determined to regain its former status by transforming itself into one of the industry’s leading open source vendors.

Novell first aligned itself with the open source community when it launched its collaborative development site, forge.novell.com, in early 2003. But it wasn’t until Novell purchased open source desktop software vendor Ximian in August 2003 that the company’s new direction began to solidify in the public eye. Then in January 2004, Novell acquired SuSE, the leading Linux vendor in Europe and the No. 2 player worldwide, after Red Hat.

But even though it seems to be holding all the right cards, Novell faces tough odds. In recent years, tough competition from Microsoft and dwindling support from third-party developers have caused Novell’s once-loyal base to look elsewhere for infrastructure needs. Unless it can win back the loyalty of the industry, Novell’s new, Linux-centric message could fall on deaf ears.

LAN leader dethroned

Novell’s fortunes weren’t always so dire. At one time, its name was synonymous with PC networking. The debut of its NetWare file sharing technology in 1983 came as a revelation. Previously, networking had been an arcane affair, used for connecting workstations to expensive mainframes and minicomputers. With NetWare, any workgroup could share files and printers using straightforward, native PC software.

Throughout the 1990s, Novell built on NetWare’s momentum, releasing technically superior products such as NDS — now known as eDirectory — and the ZENworks configuration management system. Analysts estimate that at the height of its success Novell commanded as much as 75 percent of the PC networking market. But as the years wore on, its star dimmed.

The rise of the Internet and increasing dominance of Microsoft products such as Windows networking and Active Directory — among other factors — steadily eroded Novell’s customer base. Seemingly blind to the threat to its core business, Novell made a series of missteps, including the acquisition of WordPerfect and the Quattro Pro database in a bid for the desktop-applications market. A revolving executive team and an ongoing brain drain of developers to the competition compounded its woes.

Today, left with less than a 4 percent market share, the former LAN leader teeters on the brink of irrelevance. At Novell’s darkest hour, open source could be the company’s last, best hope. And yet, company executives resist being labeled.

Back to the source

“No, it’s not fair to characterize us as an open source company, and it’s not fair to characterize us as a closed source company,” says Novell CTO Alan Nugent. “I don’t know that there’s any particular name for it, but I guess you could call us a ‘mixed-source company,’ at this point.”