Novell - the network operating system

Novell's fortune came from a team that did not do what it was told. In 1983 the Superset group was assigned to build a disk-sharing system for CP/M, the platform the company was then selling hardware for. They judged CP/M doomed, ignored the brief, and built a file-sharing system for the newly arrived IBM-compatible PC instead. They were right, and the company that grew from it reached twelve thousand employees.

To test the thing they wrote Snipes, a text-mode game played over the network - one of the first networked applications anyone wrote, and an ancestor of every multiplayer title that followed. The first use anybody found for a local network was playing against each other on it.

What NetWare became is hard to overstate now that the category has gone. A 63 per cent share of network operating systems by the common measure, better than 70 per cent by others, and around 90 per cent of PC-based servers before Windows NT Server arrived in 1993. Over half a million installed networks and more than fifty million users. Novell was the second-largest personal computer software company in the world, behind only Microsoft.

One tactic deserves its own line, because it recurs from the other direction: Novell sold its own expensive Ethernet cards at cost, deliberately, to grow the installed base its software was sold into. Destroying the margin on the hardware to win the layer above is exactly what Intel would later do to the adapter market that 3Com lived on. Novell did it first, to itself, on purpose.

Ray Noorda coined coopetition for alliances between competitors that grow a market before they divide it - which is a fair description of how a proprietary protocol became the default of corporate computing without a standards body behind it.

The end did not come from a better network operating system. It came from the operating system absorbing the network: once file and print were in Windows, a separate product for them stopped being a category. The response was to buy a way onto the desktop - Unix System Laboratories in 1993, WordPerfect and Quattro Pro in 1994 - and to fight Microsoft where Microsoft was strongest. The portfolio wound through SUSE and a chain of owners to OpenText. What survives is not the software. It is the shape of the mistake, which is to defend a category after the category has moved.