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Novell Data Systems in Retrospect

For two years Novell Data Systems cut a spectacular swath through the lives of a hundred Utahns. Novell’s experience helped define what a domestic electronics manufacturer could do in the personal computer industry by showing many things that didn’t work.

It showed that quality was important and that if top management wasn’t sensitive to quality problems, and wasn’t proactive in solving them, it could kill a company.

It confirmed to Ray Noorda that his vision was correct: That the constraints of the domestic manufacturing environment in the ’80s would make producing commodity electronics hard to do, and that terminals, printers, and personal computers were now commodity products.

It didn’t confirm George Canova and Jack Davis’s vision that Utah’s advantages—wages lower than the US average, high productivity, and easy access to electronics designing and developing talent from BYU—could allow a Utah manufacturer to offset the East Asian advantage of even lower wages.

It showed that collecting together experienced high-talent managers with long experience in the minicomputer industry, and adding lots of money, was not enough to insure success in the personal computer industry. Some other mix of talent, experience, and vision was going to be needed to make a success in this emerging industry.

It showed that tracking a moving-target goal is expensive: The products that Novell produced in 1982 changed continuously, but the changes were too often reactive rather than proactive and they generated more costs than sales. There wasn’t enough coordination between departments to accommodate the pace of change.

It showed that when partners come together to pursue a common vision they need to make sure they understand where their vision is common and where it is different. The blinding brightness of what is common can hide some deep shadows of difference. If those differences fester the product and the company can suffer.

Novell’s experience also confirmed one other thing: Just how hard it is to kill an electronics company. This was a company that had never produced a profit, had spent millions of dollars, in its final months had more returns than sales … and yet it didn’t die! There was still a dream and still people willing to invest in it.

In coming upon rocky times after existing for two years, NDSI was in plentiful company. There had been a lot of startups in Utah that had sounded just as good and ended up just as broke. For Utah, Novell was not yet a surprising company; it was doing about average.

Novell Data Systems was a proving ground for Novell, Inc. It taught the Novell, Inc., founders how many things could go wrong. It showed them how to squeeze lemonade out of lemons and how important a good vision about the company and the product is.

Perhaps the greatest chain of irony is that

a) the LAN would have never developed at Novell if Novell hadn’t first had problems with its personal computer product and

b) it wouldn’t have had problems with the personal computer product if it hadn’t been forced by its financing to have a personal computer in the first place.

In retrospect, Novell’s evolution into making the LAN product is logical. But if you had talked to Jack Davis in the summer of 1980 about Novell making its fortune with a PC-based LAN product, you’d have gotten a strange look indeed. And most important of all, the LAN wouldn’t have happened if there hadn’t been a lot of heroes to help it along the way.

It is sometimes forgotten in the Novell story that the LAN vision at Novell emerged early; it rose from the ashes of the minicomputer product in the spring of 1982. All during its gestation it was supported by the whole company, and the company’s owners, as important. But throughout 1982 it was recognized as a product for Novell’s future. What NDSI could never find in 1982 was a product for its present.

For Novell, 1982 is the story of a framework being built and heroes being forged. Novell in 1983 tells the story of those heroes in action.

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