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Jack and George were thinking on parallel tracks, but parallel does not mean identical, and both were strong-willed people.
The day Jack and George went to incorporate, Jack got his first surprise. He had been using the name Macro Systems for the business. While they were waiting for the lawyer, George said, “You know, I talked to my wife about this new company and she thought of a nice name for it.”
Jack replied, “Sounds nice. What does it mean?”
“It means ‘new’ in French,” George said.
Jack blanched a bit. In addition to his degree he’d spent two years in France on a Mormon[Footnote 1] mission and was quite fluent in the language.
“I don’t think so, George. There’s either nouveau the masculine or nouvelle the feminine—”
“Well, it sounds good anyway.”
Jack, having just read a magazine article saying that the important thing about a business name is that the name isn’t as important as what a business does, conceded.
“Yes, it sounds good, George.”
For a long time after that the company name meant “new in French” when you asked George and “nothing at all” when you asked Jack.
Novell started in a vacant truck dealership in an industrial park on the north side of Orem, Utah. From it one had a view of three spectacular sights: Mount Timpanogos, Utah Lake, and the Geneva Steel works, the largest steel mill between the Mississippi and the Pacific coast.
Jack, Sherrill Harmon, and Joe Maroney[Footnote 2] were the first to set foot in the building as employees of the new company. They started the cleanup and transformation of the building into an electronics manufacturing facility.
Jack started Novell on the vision of manufacturing a multi-CPU minicomputer system and the terminals and printers for that system, and of reselling software for it. (CPU stands for central processing unit. It can be a chip, the board that the chip is on, or the box that the board is inside—what most of us call “the computer”.)
Part of Jack’s vision was to build a minicomputer that would offer more power for less price. That part was conventional. He was going to offer accessories for that minicomputer; that too was conventional wisdom for the time.
There were two unconventional parts of his vision. One was to expand the minicomputer power by adding more CPUs to the box.
The other was to build the accessories he offered as well as the minicomputer. It was conventional at the time to OEM them. (OEM stands for original equipment manufacturer. OEMing means either offering your product for other people to put their brand name on, or putting your brand name on other people’s product.)
The minicomputer was to be the heart of the Novell line. Based on the Motorola 68000 CPU chip, it would be expandable by adding more 68000 processing boards as the customer needed them.
In 1980, this ability—to be useful over a long span of capacity requirements—was a challenge for all makers of mainframes and minis. A user who started on, say, an IBM System 34 could only grow so far before they would have to upgrade to, say, a System 38 or a 4331. When they did they would have to toss out all their old software and much of their old peripheral hardware, terminals, and printers as well. Moreover, moving company data from the old system to the new was an elaborate and laborious process.
Even more threatening to the manufacturer, once the customer realized they were going to have to go through all this nonsense whether they bought the same brand or a competing brand, they were likely to shop around: The computer manufacturer “lost control” of the client.
Thus, the difficult transition was fraught with uncertainty for all involved. Offering products with extended capacity spans gave a company a competitive edge.
Jack knew the terminal marketplace, so it would be easy to make money by offering a terminal. In his dealings with Dobbs and Woodbury he had developed a rapport with, and an obligation to, Rusty Woodbury. He called upon Rusty to join the new company to design another Sperry-compatible terminal and then to design a terminal for the Novell minicomputer.
Every office computer has a printer. Usually those printers are made by a company specializing in printer manufacture and then OEMed to the computer maker.
But why? Why not make the printer as well as the computer? Jack decided to capture this part of the revenue stream too. He licensed a dot-matrix printer design from Tritel, another contact from his earlier days, and included it in the product mix.
In Jack’s original business plan there was no standalone microcomputer or local area network. These products were added after he and George joined forces.
The “terminal computer” (the company’s name for its microcomputer or personal computer, which combined the functions of a standalone microcomputer and an intelligent minicomputer terminal) became part of the plan shortly after incorporation. George proposed it for two reasons: First, the terminal computer—sold as a microcomputer—would be a quick revenue generator financing the larger minicomputer’s development. Second, they had a ready customer. A standalone microcomputer would fit more closely than a terminal or minicomputer with what Safeguard wanted as an electronic alternative to its One Write system. (More on this next.)
And in classic terminal-manufacturer logic of the ’70s, if they were making a terminal, why not make a standalone computer too? In fact many terminal makers tested the waters of the personal computer market in the late ’70s, but none survived the shakeouts of the ’80s.
The LAN did not appear in the product mix until the summer of 1981. (That story is covered below, starting on p. 50 with “The LAN Is Born”, as part of how the SuperSet group came into being.)
As Joe and Sherrill were cleaning up the building, Jack and George were flying to Philadelphia.
No one on the West Coast had been interested in financing this new startup, but on the East Coast Jack had rekindled yet another old contact: Dolf Pere and Pete Musser of Safeguard Business Systems and Safeguard Scientifics. Victor Vurpillat, who was then Vice President of R&D at Safeguard Scientifics, re-introduced them.
Dolf Pere and Pete Musser
Dolf and Pete had built Safeguard Business Systems and their One Write accounting system into a thriving cash cow. They had used an independent franchise marketing approach to develop a sales force numbering in the thousands.
In years previous Dolf and Pete used the profits to diversify into industrial areas such as metal finishing and transmissions. But in 1980 they could see a much different opportunity appearing: Microcomputers used for accounting might soon supplant some of their One Write manual accounting system demand. They wanted to be prepared by diversifying into high tech, specifically microcomputers.
When Jack and George came to them about investing in a computer company, they were very interested. They wanted a system that they could offer as a high-end migration product for their One Write sales force.
Dolf and Pete knew from earlier experiences that some of their plans and visions weren’t in line with what salespeople and customers wanted from Safeguard Business Systems and the One Write product. They solved this friction by forming Safeguard Scientifics as the organization for their diversification. Safeguard Scientifics was to be the venture capital organization for Novell, building Novell into a stable and profitable company, then spinning off its ownership when the shares could be sold for a good return.
But the products Dolf and Pete were interested in seeing come from Novell were for the future development of Safeguard Business Systems.
The meeting ended with Dolf and Pete committing to financing Novell and with George and Jack getting a check for $250,000 so they could go to Comdex (the Computer Dealer’s Exhibition) that year.
Going to Comdex in 1980 said a lot about the Novell that was to come.
Novell didn’t have a product. It didn’t have a plant. It hardly had an organization or money. But Jack felt that establishing a relationship with future resellers of Novell product was important, and that he was going to find those resellers at the Comdex trade show in November.
The choice of Comdex was significant.
This was Comdex’s second year. It was still overshadowed by the giant National Computer Conference (NCC) trade show, which centered around mainframes and minis but was felt by many in the industry to be a show for students and tire-kickers. (This complaint was real enough that the NCC show imploded after a famously ill-organized 1983 exhibition in Anaheim, California.)
The Comdex show was directed towards independent reseller organizations—the new wave of retail computer stores that were springing up around the country—and centered around microcomputers rather than minicomputers. Jack felt Comdex might be small compared to NCC, but it was strategic.
So George, Jack, and Larry Edwards, the new Vice President of Sales, went to Comdex. They put up an inexpensive but visually impressive booth consisting of nothing but hanging Novell banners and lots of chairs. Dead in the center was an apartment-sized refrigerator (about 3 feet high) wrapped up as a Christmas present, representing products to come.
Jack’s hunch paid off: Comdex was strategic. Sitting space was at a premium, so the chairs at the Novell booth attracted hoards of foot-weary resellers. The media stopped in because they were curious and they wanted to see more polished marketing in an industry segment still dominated by inventors wearing T-shirts and jeans while showing off their latest technology. The Novell reputation started to grow even before the product did.
Having made their debut, the Novell team headed back to Utah to plan a blockbuster year for 1981.
|Footnote 1: The LDS Church requests that in first references it be called by its official name, The Church of Jesus Christ of Latter-day Saints. Consider it done.
|Footnote 2: Despite diligent inquiry, the author cannot confirm the spelling of Joe’s name, pronounced muh-ROW-nee. It could equally well be Moroney or Maroni. (If it had been Moroni, like Joseph Smith’s angel, it would have been commented on and mispronounced.)
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