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1981 was the year in which Novell defined itself. It transformed from an idea into a company: A company based in Utah, a company that would sell printers, personal computers, and local area networks. It was also a year in which many ideas were cast off: It would not be a company that sold minicomputers or Sperry-compatible terminals. It would not be a company of which Jack was a part.
The challenge that Novell faced coming into 1982 was that what had been defined as Novell, thus far, was not profitable: It was still consuming more resources than it was creating. With Jack’s firing, the writing was on the wall. The company would have to become profitable soon.
Larry had been able to assemble an experienced sales and support staff very quickly. Novell never lacked for salespeople in 1981.
Jack’s promotion and marketing efforts border on legendary. A company that didn’t even exist in 1980 was getting media attention at Comdex 80, and by Comdex 81 was promoting like a well-established minicomputer company.
Rusty and Phil had created a high-end, innovative personal computer that any ex-IBM mainframe or ex-Burroughs terminal user would feel comfortable with.
Finally, the company as a whole had recognized that local area networks were going to be important to the company’s future. The LAN was never a “skunk works” project that had to be developed in secret because part of the company was dead set against it. Everyone knew the LAN would be important. It just wasn’t getting there soon enough.
Jack and George had assembled a highly professional team but couldn’t supply the vision to keep them all pulling in the same direction. These people, including George and Jack, brought with them old habits and old experiences that were appropriate for the minicomputer world. Some were also appropriate for the personal computer world, but some were not. Mistakes were made, many of them costly.
The evolution of product had produced results that were different than what the mainstream of personal computer users were expecting. The Novell system was high-end at a time when the market was still more interested in low-end solutions. These features added cost, but didn’t add customers. For instance, the system offered graphics but no way for average users to access them. They could get more graphics use out of an Apple II because there were software packages available that utilized the Apple II’s graphics.
Jack was fast at assembling a plan but he was poor at checking for holes in his logic. George didn’t have the background to fill in those holes.
For instance, Ray Noorda pointed out that manufacturing electronic hardware in Utah was a fundamentally risky proposition in the early ’80s. Jack wasn’t oblivious to this. He had helped TeleVideo import their terminals and every day he drove past the abandoned ADDS terminal factory that Harry Armstrong had once worked in. But on the other hand, even in the early ’80s there was lots happening in electronics in Utah, and George’s background was in manufacturing. If anyone could make domestic manufacturing happen, it was George, and he was willing to try.
One of the most costly mistakes was the inability to resolve the quality issue. Finding fault is only important inasmuch as it’s a step towards resolving the problem. But top management never finished resolving the quality problem, so the organization wallowed in the fault-finding stage and its customers stayed away in droves.
So by the end of 1981 Novell already had a checkered past. Some of its efforts were hits and others were misses. It would take another year, 1982, to sort out its future.
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